Industrial Alliance Securities (research)Noconfusion for premium, good news abound
Event
Premium has released a flurryof press releases over the prior week highlighting its continued success atIdaho Gold and helping investor understand PEM’s discussions with the BCSC(British Columbia Securities Commission).
Continuing success at idaho gold
Due to initial poor weather inearly June, drilling was delayed slightly however it has returned to 100%effectiveness. Premium is targeting 25,000m of drilling across all of theproperty (incl. Friday-Petsite, Buffalo Gulch and Deadwood) of which 22% hasbeen drilled and 9% assayed. The few results reported are allpositive. The Friday-Petsite deposit has been increased along strikesouth and, while more work is required, the fault has been intersected north ofthe Main Zone. This is in line with our projections of a more substantialdeposit at Friday. Appendix 1 shows the location of drill results andwhere IAS projected a resource increase with the current exploration campaign.
Premium has also begun work onthe Deadwood Zone. Work completed is still minor and no assays havereturned. The flexibility of the Phase 4 exploration campaignallows the company to progress at other sites and return at Deadwood when itsdrill results are analyzed. This insures that the company maintainsmaximum efficacy as it drills.
Technical Issues
Over the last few months, theBCSC has been trawling many company websites to insure that the data presentedis fully compliant with NI 43-101 guidelines. In almost all cases,non-compliance requires the company to make minor modifications. Whilemany comments and inquiries have been directed toward PEM addition to thedefault list by the BCSC, the changes ordered by the BCSC aresuperfluous. The modifications do not affect the validity of the previousresults nor does it change the resource estimates. As the changes werenegligible, PEM was quickly removed from the list on July 7th 2011.
Outlook
Premium Exploration is on trackto expand and substantiate the Idaho Gold Project by drilling across multiplezones. The recent news concerning the BCSC has proven to be a distractionto the continued returns from the Phase 4 exploration program. ThereforePremium is well positioned to profit greatly from the program.
RECOMMENDATION
The news is positive however itdoes not change our model. As previously mentioned, PEM is meeting ourexploration targets and we reiterate our Speculative Buy recommendation…
ANALYST: Killian Charles