Premium Exploration Inc. has announced its decision to sell its Bennett Lumber Company Mill Site and its corresponding mining claims to the New Jersey Mining Company.
The company said the 220-acre property in Elk City, Idaho and the Red Elk Group of claims, containing 13 patented mining claims, will be bought by New Jersey Mining in a staggered payment scheme totaling $425,000.
Premium Exploration president John Ryan said the sale was made to raise working capital for other priority projects.
"This sale provides us with a much needed dose of fresh capital which we intend to use for reducing accounts payable and working capital. I think it is a win-win for both parties," he said in a release while referring to New Jersey Mining's plans for the area.
"We are pleased to be able to close the sale of this property to New Jersey Mining. The property has great potential use to New Jersey Mining as they are planning a custom flotation mill on the site. We would be pleased to see them accomplish that goal as that would actually aid us greatly in development of our own high grade gold properties located in the Elk City District," Ryan added.
He explained that the company already has a custom flotation mill near Kellogg, Idaho.
"I know them to be excellent operators and designers of mills," he said.
The $425,000 payout will be made in three tranches:
- $125,000 down payment upon signing a definitive agreement;
- $125,000, plus additional 5 percent interest, to be paid on August 15, 2014; and
- $175,000, plus additional 5 percent interest, to be paid on July 15, 2015.
Premium Exploration has a number of properties and claims throughout the United States, exploring mainly for gold, silver, platinum, palladium and rhodium.
Its district-sized Idaho Gold Project contains three known deposits:
- The Friday deposit with NI 43-101 compliant resource with indicated 647,000 Au (20.1 MT @ 1.0 g/t Au with 0.45 g/t cut‐off) and inferred 590,000 Au (20.9 MT @ 0.88 g/t Au with 0.45 g/t cut‐off);
- The Deadwood deposit; and
- The Buffalo Gulch deposit, which both have small historical gold resources that may be expandable.
New Jersey Mining Company president John Swallow was quoted saying, "This property acquisition provides us with considerable flexibility within our business plan. We have thorough knowledge of the area which lies within trucking distance to our mill in Kellogg. It fits our near-term objectives of evaluating high-grade systems for production potential as well as our longer-term vision of possibly building a new mill capable of servicing an emerging mining district as local operations are developed."
Elk City is one of the historic gold mining areas in Idaho. The first gold strike in the territory was in 1861, two years before the Idaho Territory was organized.
Premium Exploration (OTC: PMMEF) has a market capitalization of approximately $8 million. Its Idaho Gold Project is a re-emerging mining district that is believed to have several bulk tonnage deposits.
Meanwhile, New Jersey Mining owns a 360-tonne per day flotation mill and concentrate leach plant in North Idaho's Silver Valley. It works on custom milling contracts while pursuing small-scale production.