The News.

This could hardly be better news,PEM exceeded its 1 million oz target by 220,000 oz but it also beat my estimate of 40mt to 45.5 mt.The real news is the zones are all part of the same system that will also add in a major way to the tonnage with more drilling.We must keep in mind that the 300m and 900m stepouts were not part this current 43-101 updated resource.

It is mine and the companies thinking that those stepouts are indicating Friday and Monday North and South zones are connected.If so the tonnage will expand at least 5 times in my view.That could put the Friday deposit in the 200 to 250mt range and suggest a 5 million oz discovery at Friday.This is were I think we are going in the next round of drilling.

We must also think about the Exploration of Deadwood and Buffalo Gulch.Not only is the 25,000 phase 4 going to infill Friday but also wildcat in Deadwood and Buffalo at the same time.I expect that the company will increase the program to 50,000m if any hole in the Deadwood or Buffalo sections deliver the kind of results similar to Friday.

I think the current stock price does not reflect the 1.2 million ounce expanding Friday discovery that if valued at $100 per ounce would give a market cap of about $120 million or about $1.02 per share.Throw in another .50 cents for exploration upside and we get about $1.50 per share.

In all metrics the stock is a strong buy.Fronteer Gold was bought last month by Newmont for $2.5 billion or about $500 per oz.If Friday meets my target of 4 to 5 million oz.Then its clear PEM is grossly undervalued even at $5 per share.

James