Thanks Phidias, I've already read those. I'm not familiar with the geology of that part of Idaho, but I notice some of the better returns are at depth. Cost-wise it makes a difference if you're drilling metamorphic, as opposed to igneous or sedimentary rock. It also makes a difference when you go to mine the stuff, especially if it's a deep deposit.

I did notice one red flag. Management fees? Consulting fees? If I need a consultant, I hire someone outside the company. As for management fees, I thought these guys were managers? Isn't that what they're paid for? I haven't looked at their compensation, but if it's not enough, then go to the board and ask for a raise. I could live comfortably for several years on what these guys took out. Not something I like to see.

Premium Exploration Inc.

Notes to Interim Consolidated Financial Statements

Canadian Funds

Unaudited

FOR THE NINE MONTHS ENDED 30 September 2010

7. Related Party Transactions

Transactions and balances with related parties not disclosed elsewhere in the financial

statements are as follows:

a) The Company paid management fees of US$60,000 (2009 - US$45,000) to a director in his

capacity of chief executive officer.

b) The Company paid management fees of US$76,500 (2009 - US$81,000) to a director in his

capacity of president and/or director.

c) The Company paid consulting fees of $45,000 (2009 - $45,000) to a company controlled by

an officer of the Company in the capacity of chief financial officer.

d) The Company loan $231,000 to an officer and director of the Company. The loan has a 5%

interest rate per annum and is payable on or before 31 December 2010.

e) See description of events in Note 6(b)

The above transactions, occurring in the normal course of operations are measured at the

exchange amount, the amount of consideration established and agreed to by the parties.

ebear