A potential multi-million oz gold deposit and over $5 million in the bank puts Vancouver-based Premium Exploration Inc., in the driver’s seat for an exciting drill season ahead, says the company’s president and CEO, Del Steiner.

The company has a district-sized land package known as the Idaho Gold Project along the prolific Orogrande Shear zone that hosts three known deposits at the Buffalo Gulch, Deadwood and Friday Fault Zones. The project stretches 30 kilometers, and with the results of a recent airborne survey over its entire length and a proven exploration strategy, Premium is focusing on a district-wide +25,000 meter drill program to make new discoveries while expanding existing resources in 2011

“The first step is to take the current 550,000 oz inferred resource (NI 43-101) to a million ounces, and then demonstrate its multi-million ounce potential.” Steiner said in an interview. “It will be part of the summer priority. We will rapidly demonstrate the large footprint of the Friday Petsite deposit while engaged in district–wide exploration utilizing our proven exploration strategy to make new discoveries. And we’ll start in March.”

Steiner says the company has already spent $7.5 million in the last couple of years to get the project to the current state. With over $5 million cash still in the bank and over $12 million available through warrants; the company should have no difficulties with its +25,000 meter 2011 program. Says Steiner: “We feel really good about our cash position moving forward.”

Steiner said a 10,000 meter drill program at the Friday-Petsite deposit in 2010 produced excellent results from every hole and analyzed, will significantly add ounce potential to the existing resource. Adding to the company’s enthusiasm for this deposit was the discovery of a new zone beneath the existing foot print which was focus of the 2010 program.

Commenting on those results, Steiner said: “We were pleased with the higher grades in Lower Zone. Previous drilling by Cypress and Kinross terminated at 150 meters depth. We have drilled through that zone down to 300 meters of depth, and encountered some really good grades. It gave us a different view of the Friday Fault Zone – and we haven’t drilled through the bottom yet.”

The most recent evidence of that growing potential came with news of two more successful drill holes at Friday-Petsite.

“Both drill-holes will add significant ounce potential to the updated resource estimate and Premium is optimistic that it can reach its corporate objectives of increasing its current resource base with the completion of the Phase-Three drill program.” Exploration Vice President Michael Ostenson said in a news release. “Phase-Four exploration will be designed to make new discoveries and to continue the development of the Friday-Petsite bulk tonnage deposit while following up on the high-grade mineralized zone encountered in Phase-Two and Three drilling.”

With Friday Petsite towards the south, Deadwood in the middle, and Buffalo Gulch in the north Premium believes it has a property that could be attractive to a mid-sized or large miner within a five-year time frame – if ongoing drilling produces the expected results.

Buffalo Gulch --- the second piece acquired by Premium -- was originally developed by Bema Gold and was about to go into production in 1992 when the gold price took a tumble – and stayed there. The property has seen the likes of Bema, Cyprus Amax, and Kinross all working to prove up ounces.

“We take a lot of comfort in the fact that each one of those previous programs continually added ounces,” says Steiner, who himself has a long history of involvement with the region.

Deadwood, the centerpiece of the play, has had very little drilling, but as a result of the recently-completed airborne survey, that has changed quickly. Says Steiner: “The airborne was amazingly successful. It shows the priority target will be Deadwood Zone. We’ve got some targets there that the guys are salivating over. They can’t wait to get drilling.”