greenfields -

Thanks for the post . It made me go back and re-read the NR. I missed the "not" after TSX-V approval and changes everything. Here are my new thoughts.

First, the pertinent parts of the NR -

"August 30, 2013, Vancouver, British Columbia – Premium Exploration Inc. (TSXV: PEM; OTCQX: PMMEF) (“Premium” or the “Company”) announces that it has entered into a binding letter agreement dated August 29, 2013 (the “Letter Agreement”) with an arms’ length party (the “Purchaser”) pursuant to which Premium has agreed to sell and the Purchaser has agreed to acquire a 24.9% interest in Premium’s wholly owned U.S. subsidiary, Premium Exploration USA Inc. (“PEM USA”) through the issuance of 249 common shares (the “Shares”) in the capital of PEM USA to the Purchaser, in exchange for an immediate advance of $200,000 (the “Funds”) (the “Sale Transaction”).

Premium requires the Funds to pay statutorily required annual fees for its Idaho Gold Project as well as other mining claims it holds in Montana in order to renew Premium’s ownership of the mineral claims comprising the majority of its projects.

As previously announced in Premium’s news release dated August 22, 2013, the Company is proposing to complete a consolidation of all of its issued and outstanding securities on a 10:1 basis which would result in all of the Company’s share issued and outstanding shares being consolidated on a one new consolidated common share for each 10 existing common shares (the “Consolidation”).

The Letter Agreement and the transactions thereunder are subject to approval of Premium’s board of directors and the TSX Venture Exchange. It is a condition of the Letter Agreement that if TSX Venture Exchange approval of the Sale Transaction is not obtained within 120 days from the date of the Letter Agreement, the Purchaser would transfer the Shares to Premium in exchange for 4,200,000 post-Consolidation common share purchase warrants (the “Warrants”) of Premium and a cash payment of $400,000. Each Warrant will entitle the holder to purchase one common shares in the capital of Premium at a price of $0.05 per share for a period of two (2) years from the date of issuance.............."

I have underlined the parts that I feel outline the transction. It has three parts:

1) To buy 24.9% of PEM USA (a subsidary of PEM), the Purchaser pays an advance of $200,000. This money is used to pay the claims fee on the land;

2) The company proposes a consolidation of 10 existing shares to one "new" share; and

3) If the Venture does not approve the transaction by 120 days, the Purchaser pays $400,000 and receives 4,200,000 new (post-consolidation) shares purchase warrants(42,000,000 existing shares). The purchaser gets the warrants at $.05 with a 2 year exercise period.

So, after re-reading the NYR it seems that there are two deals;

A) Purchaser gets 24.9% of PEM's subsidary-PEM USA (Del's shares?) for $200,000 and gets the "249 shares of PEM USA"; or

B) The TSX-V does not approve the transaction, the Purchaser returns the 249 shares, pays $400,000, and gets 4,200,000 post-consolidation shares purchase warrants of PEM that can be exercised at $.05 for 2 years.

The questions I have are:

What is PEM USA? Are these Del's shares in the exising company (held in the USA?. It appears that no new shares are being issued for that transaction.

If the purchaser returns PEM USA shares, where do the 4,200,000 "new" shares they get come from? Are new shares (dilution) being issued? Will another $400,000 be paid or does the initial $200,000 count towards that $400,000 payment?

I apologize for mis-reading the NR and welcome any other thoughts on this NR.

- panamax