Max,

There is a good possibility that PEM could reach $1 again. The challenge will be not to dilute the company to the point where dilution becomes a problem.

The first problem Premium has is its legacy; falling short of its inferred and promised deliverables has hurt the company and is intimately associated with the company's Brand.

Changing the name of the company and changing the ticker goes a long ways to disassociating the company with its negative past. The market knows Premium as the company with a marginal low grade prospect that could not attract the majors when the majors were looking, AND the company with management that consistently failed to take advantage of the market to raise funds and guard shareholder value.

Relisting under a new name is a good idea and easiest way to draw attention to the company again.

Premium also has to deal with the loss of capital associated with the loss of a significant portion of the patented claims and loss of 24.9% of all of its US assets including properties. On paper they appear to be a minority holder of the Petsite resource, not the 100% owner they were a few months ago.

The relisting is one of the easiest ways to clean this up, assuming the holders of the shares of Premium USA and the dispute parties over the patented claims are willing to trade their interest for paper in the new company.

I will not blame the market, economy or exterior factors for the current state of affairs. Those are issues beyond the control of management.

The current state is that we have a company that has no market value, a company that is tarnished by past performance, and no clear idea of what management wants to do.

Here are some ideas to condiser:

Buffalo Gulch Mine.

Premium said at one point that the project was permitted to go into production. It was just a matter of changing the name on the paperwork. It never happened. There are no permits to put Buffalo Gulch into production.

In 2010, I believe Premium drilled three holes into Buffalo Gulch. One was a dud ant the results of the other two were just OK. Rain reportedly haulted drilling and no drilling has been done since.

From what I understand it would normally take about a two years to permit if all the studies and BS needed by the government is completed.

Petsite Friday

This was Premium´s big show. Drilling had progressed slowly with almost all of the holde drilled on the five patteneted claims. There appears to have been issues with permitting because I do not understand why there was not more drilling beyond from where all of the historic work was done. The claim that the deposit is much larger should be supported by drilling.

I think a systematic plan for expanding the resource, with measurable and deliverable objectives is needed.

Marketing

Premium was promoted like a VSE company of the 1980s. Expectations were always raised to high and the company kept promoting the next hole, not comprehensive results of a campaign. This throwing the market lab results rather than illustrating how results appear to relate to the existing resource made the stock a day traders favourite for flipping. There was always news. The percived value of an assay did not translate clearly into a measurable increase in value of the resource.

The promotion of the play was overhyped. The association made with the Carlin trend was not clearly justified and certainly was not supported by the compny's results or similarities. A string of dots on a map comparing the placement of mines along some strike is not enough. Again, it comes of sounding like a VSE pump and dump.

The geological model of stringer zones and feeder zone was not illustrated using the results of drilling. I have no diea if there is any real validity to the concept.

Big picture generalizations of how much gold was in the ground did not help. I reflect back upon Del´s interview in 2009 stating that there was probably 5 to 10 million ounces of gold along the trend was good arm waiving but resulted in high expectations that would be difficult to meet. Again anonther VSE type promotion.

The company needs to illustrate clearly what it wants to do, how it is going to do it and a means by which the market can measure success.

Premium exploration is a tainted brand and I think it is time to rename the company and to create a new market image. No signs of old Premium managment or IR.

Value & Liabilities

I went into this in a previous post. Premium only owns 75.1% of Premium USA, holder of all Premium´s properties. Further there is a dispute over the ownership of roughly 37% of the 5 pateneted claims which meant that Premium only holds a roughly 46% stake in the Pesite resource?

There remains questions about the secured debenture and payouts that have to be made to old management.

This has to be cleaned up before the company moves forward.

I was a little surprised to see Premium drop below a 5 cents (=0.5c preconsolidation).

The main asset of the company is the property it holds. Premium Exploration owns 75.1% of Premium USA. The 5 pattented claims are worth more than the market cap and the fees are paid up on the entire land package for the year. However, " There remains a 37.5% interest in these mineral rights which is under dispute. The Company is unable to make a reliable estimate of the cost or likelihood of settlement and accordingly no provision has been made."(Q2 2013 MD&A) This is separate from the 24.9% third party ownership of Premium USA. My estimate is that Premium owns 75.1% of 62.5% of the five patented claims or 46.9%.

There are also termination agreements that repersent a $216000 liability:

The Company has agreements with the President, the CEO and CFO as laid out below:
The CEO, President and Director has signed a contract for a term of three years, which expires 31 March 2015.
Under the terms of the contract, the President receives a monthly payment of $12,000.
This contract may be cancelled upon the Company providing one year advance notice.

The CFO has signed, through a company controlled by the CFO, a contract for a term of three years, which expires 30 April 2012. Under the terms of the contract they receive a monthly payment of $6,000. This contract may be upon the Company providing one year advance notice.

There remains the secured debenture that has to be settled (maybe covered by the dispute above)

Premium needs to clean the slate of this legacy of bagage associated with the previous management before it can move forward.

The Brand "Premium Exploration" is associated with too many negatives:

• inability to deliver any task by the deadlines they set (I cannot name one timeline set for a project in which Premium met)


• not honest and forward in reporting setbacks.(this is a big list)


• failure to effectively manage investors' expectations by building up expectations that were followed by only fair results (Remember the comments about expecting a resource estimate of 2 million ounces in 2010, remember Del's comments about 5 to 10 million ounces in 2009?)


• failure to expand the area covered by drilling significantly beyond the company's patteneted claims. This includes the failure to obtain permitting through the BLM.


• lack a charasmatic leader with vision who can effectively communicate.

The company needs a new name and new image without any trace of Del or Premium Exploration associated with it. Nothing is going to happen with Premium for a while. The shutdown of the government by the Tea Party ensures that there will be substantive delays in permitting. Take this time to sweep the company clear of all the old bagage and present a new face to the market. Maybe OGZ Mining, Elk City Resources...

And yes this means a new IR group. The current IR will always be associated with the old Premium because they were the face of company on a day to day basis with investors. Christine represtents the integrity and success of Premium for the past several years. She is intemately associated with the Premium brand bagage.

Joey, I believe you are correct.

It does not make the terms of the deal any better. It looks to be a very sweet deal for the PURCHASER and an even better deal if the TSX rejects the purchase.

Who is the PURCHASER?

Goldmember, I read it the same way. It looks like deal was drawn up by a Las Vegas loan shark. IMHO.

In order to operate in the US, Premium has to exist there as a corporate entity. The TSX listed company "Premium Exploration Inc." (PEM) owned several companies including "Elk City Mining", and "Premium Exploration USA Inc" (PEM USA).

I believe that PEM USA held all of the mineral claims and leases and contracts. Essentially, PEM USA has all the assets. I guess I could check with the BLM on this one.

I believe to sell off 24.9% of PEM USA is to sell off 24.9% of PEM's assets in PEM USA. It would not matter how much the company dilutes PEM, the new owner of 24.9% of PEM USA would continue to own this percentage.

There is quite the penalty attached to rejecting this deal. If PEM directors (shareholders) or the TSX rejects the deal, the purchaser receives double his money ($400,000) and 4,200,000 warrants at $0.05. I assume that after the consolidation we would be looking at a $0.10 trading price, so the warrants appear to be at a significant discount.

There are other questions, like where would Premium com up with the $400,000 it would have to pay the purchaser? The $200,000 is gone and there is nothing in the treasury. Would PEM then offer payment in shares (8,000,000 at a value of $0.05)?

If the deal falls through, the PURCHASER could conceivably end up owning 12,200,000 new shares or 46% of PEM for $210,000. This would be a significant discount from th $2M market cap the company has today. Sweet deal for the PURCHASER.

I think the identity of the PURCHASER is material information that should be disclosed to the market immediately.

Do the math for yourselves and look at the possible scenarios.