Premium Exploration Announces Increased Mineral Resource Estimate at Idaho Gold Property
VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 04/11/13 -- Premium Exploration Inc. (TSX VENTURE: PEM)(OTCQX: PMMEF) is pleased to announce Logan Resources Ltd ("Logan") has announced an updated mineral resource estimate for the Friday Deposit, one of six zones of known gold mineralization within the Idaho Gold Property (the "Property"), located in north-central Idaho, USA.
The updated resource estimate at a 0.45 g/t Au cut-off increases the Friday Deposit to:
Indicated: 647,000 oz (20.1 Mt @ 1.0 g/t Au) from 629,000 oz (21.5 MT @ 0.91 g/t Au & 0.4 g/t cut-off)
Inferred: 590,000 oz (20.9 Mt @ 0.88 g/t Au) from 146,000 oz (5.9 MT @ 0.77 g/t Au & 0.4 g/t cut-off)
This is an increase in both the grade and the ounces of gold estimated in the Indicated and Inferred categories over those reported in the initial mineral resource estimate published on the Friday Deposit by Premium Exploration Inc. ("Premium") on August 16, 2012. Data acquired from 18 holes drilled in 2011 and one hole in 2012 was utilized in the resource estimate, which also resulted in the reclassification of some of the resources.
Logan has signed an Option and Joint Venture Agreement (the "Agreement") with Premium which affords Logan the option to acquire up to a 75% interest in the Property. Further details of this transaction are disclosed in the Company's press release dated March 28, 2013. Closing of this transaction is subject to a number of conditions, including approval of the TSX Venture Exchange and the completion of a financing satisfactory to the Company.
"We are very pleased that the pending Logan/Premium option and joint venture has already created value for Premium shareholders," stated Del Steiner, President & CEO of Premium. "The updated and increased resource estimate for the Friday deposit clearly demonstrates Logan's ambition to advance the Idaho Gold Project. With $1.5M committed in exploration, permitting, and development activities within the first 12 months of closing and $3.5M in the 24 months thereafter, we believe this positive revised resource estimate is just a sign of things to come for our shareholders."
Mineral resource estimates summarized above represent the estimate with a gold cut-off grade of 0.45 g/t within a potential open pit limit and considered to be generally consistent with the economic cut-off for other mineral deposits of similar characteristics, scale and location. Assumptions used in the estimate include a gold price of US$1,500 per ounce, gold recovery of 85% and combined processing, G&A and mining costs of $16.50 per tonne.
Resource Estimate Details
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INDICATED INFERRED
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Cut-off Tonnes Au oz Au Tonnes Au oz Au
g/t Au (000's) g/t (000's) (000's) g/t (000's)
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0.40 22,358 0.94 677 22,924 0.84 618
0.45 20,130 1.00 647 20,847 0.88 590
0.50 18,093 1.06 615 18,832 0.92 559
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Notes to accompany Mineral Resource tables:
1. Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability.
2. Mineral resources are amenable to open pit mining methods and have been
constrained using a Lerches-Grossmann optimized pit.
3. Assumptions include US$1,500/oz Au, 85% Au recovery, $2.50/tonne mining
cost, $2.00/tonne waste mining cost, $12.00/tonne process and G&A cost.
No allowances have been made for mining losses and dilution. Pit slope
angle of 45 degrees.
4. The Company has elected to use a 0.045 g/t gold cut-off (bolded) which
is greater than the conceptual marginal cut-off of 0.36 g/t.
5. Gold analyses are performed by fire assay/AA finish methods.
The updated mineral resource estimate for the Friday Deposit, formerly known as the Friday-Petsite deposit, in the table above is based on a combination of historical data (Cyprus-Kinross, 1997-1999; Canden Capital, 2002; and Beartooth, 2004), and the data acquired by Premium Exploration Inc. between 2009-2012, and is effective as of February 19, 2013. Analytical data from 86 core holes and 90 reverse circulation ("RC") holes were used in the updated resource model. Grade estimation was based on data from 78 core holes, totaling 8,688 metres, and 56 RC holes, totaling 3,296 metres.
A grade shell model was created to constrain the grade estimation using indicator kriging with a threshold of 0.2 g/t Au. A wireframe model of a dacite dyke intruding the western portion of the central shear zone was also created. The dyke does not contain significant mineralization and was excluded from the mineralized domain. The wireframe and grade shell modeling were carried out in Leapfrog3d software and exported to Gemcom:Surpac software for grade estimation.
After examination of the cumulative probability plot it was decided to use a top-cut of 30 g/t Au prior to compositing and restrict the influence of grades above 10 g/t to a shorter search distance. The top-cut of 30 g/t affected 56 samples. A total of 56 samples exceeded 10 g/t. Globally, the outlier restriction and topcut removed 10.6% of the contained metal.
Best-fit downhole sample assay composites of Au were generated using a nominal three metre interval within the grade shell domain. All samples were capped prior to compositing. Based on 637 samples, a density of 2.68 g/cm3 was used for the mineral zone, 2.65 g/cm3 for the host rock and 2.67 g/cm3 for the dyke.
Gold grades within the corresponding domains were estimated in three passes using the inverse distance weighting method to the third power (ID3). Ordinary kriging and nearest neighbour estimates were also carried out for use in model validation. Blocks were classified as 'Indicated' if they were estimated in the first or second estimation pass or had a composite located within 30 metres (or half the variogram range) of the block centroid. All other estimated blocks were classified as 'Inferred'.
In order to meet the requirements of National Instrument ("NI") 43-101 with respect to reasonable prospects of economic extraction by open pit mining methods, a 45 degrees pit wall slope Lerchs-Grossman pit was generated to constrain the resource within the block model.
Mr. Ronald G. Simpson, P.Geo., with independent firm Geosim Services Inc. Vancouver, Canada, and a Qualified Person as defined by NI 43-101, has reviewed and approved the underlying sampling, analytical and test data used for the Estimate. He examined and verified the database, and conducted a site visit in 2012. Mr. Simpson has reviewed and approved the technical disclosure contained in this news release. The estimate is classified as Indicated or Inferred Mineral Resources, consistent with the definitions set out in CIM (2010).
Areas of uncertainty that may materially impact the Mineral Resource Estimate include:
-- Commodity price assumptions;
-- Assumptions that all required permits will be forthcoming;
-- Pit slope angles;
-- Metal recovery assumptions;
-- Mining and process cost assumptions.
There are no other known factors or issues that materially affect the estimate other than normal risks faced by mining projects in terms of environmental, permitting, taxation, socio-economic, marketing, and political factors. Geosim is not aware of any known legal or title issues that would materially affect the Mineral Resource estimate.
Property Details
The Idaho Gold Property is a contiguous land package encompassing approximately 18,000 hectares (ha) in north-central Idaho. Logan has an Option and Joint Venture Agreement with Premium which affords Logan the option to acquire up to a 75% interest in the Property. Additional information about the Idaho Gold Property can be found in the technical report entitled: "Technical Report, Idaho Gold Project, Idaho County, Idaho, USA" dated effective May 31, 2012, filed on SEDAR at www.sedar.com on August 16, 2012 and prepared for Premium Exploration Inc.
About Premium Exploration Inc.
Premium is focused on the exploration and development of its district-sized Orogrande Shear Zone "OSZ" to fulfill its vision of developing a new mining district in North America. The OSZ is a 30 km-plus regionally-significant structure that correlates with multiple known zones of mineralization. This structural control to gold mineralization has characteristics similar to many large gold belts, such as the Carlin Trend of Nevada. Exploration is ongoing at the Friday-Petsite deposit; the most advanced of several known mineralized zones located along the OSZ. The Friday-Petsite deposit represents less than four percent of the OSZ under Premium's control.
For additional information, please visit us at http://www.premiumexploration.com.
This press release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involves a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the TSX Venture Exchange and the British Columbia Securities Commission. All statements, other than of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Contacts:
Premium Exploration Inc.
Mr. Del Steiner
President & Chief Executive Officer
(604) 682-0243
(604) 682-2499 (FAX)
dsteiner@premiumexploration.com, info@premiumexploration.com
www.premiumexploration.com
Opes Capital Inc.
Ms. Christine Kopr
Corporate Communications
(604) 682-0243
(604) 682-2499 (FAX)
ckopr@opescapitalinc.com
www.opescapitalinc.com