Premier Discovers Second High Grade Gold Zone at Santa Teresa

    82.91g/t gold (2.42 oz/ton) across 1.5 metres

    Shares Issued: 69,198,742

pleased to announce new partial assay results at the Santa Teresa Project
located in the historic and high grade El Alamo District of Baja California
Norte, Mexico. These results are from the first hole drilled to test a second
prospective horizon on the Property, resulting in the discovery of a second
high-grade horizon that has the potential to host significant gold and is the
first hole ever drilled to test this area. Historical mine workings
(pre-1900's) located several hundred metres along strike on the newly acquired
Victoria claim are potentially located on the same horizon, suggesting
significant expansion potential. Premier expects to report the remainder of
its recent drilling results in the near future.
    Hole ST006 returned 82.91 g/t gold (2.42 oz/ton) from 173.80 metres to
175.30 metres. This interval is characterized by grey quartz veining, bands of
pyrite, pyrrhotite and sphalerite mineralization as well as visible gold.
Premier regards the results from this intercept as significant for the
following reasons:

    -   It represents a vein occurrence not previously identified in the
        historic record on the property.

    -   It supports the belief that high grade mineralization occurs in
        multiple vein systems within a much wider structural corridor.

    -   It increases the strike length of the mineralized system at Santa
        Teresa to approximately 400 metres and occurs nearly 500 metres from
        the past-producing Princessa Mine.

    Hole ST006 was drilled approximately 200 metres southeast of the Princessa
structure which to-date has been the focus of drilling and has returned
numerous high-grade gold intercepts. Highlights from drilling the Princessa
horizon include the following:

    -   Hole ST001 - 26.19 g/t Au (0.76 oz/ton) across 1.2 metres
    -   Hole ST005 - 479.31 g/t Au (13.98 oz/ton) across 2.0 metres
    -   Hole ST008 - 39.41 g/t Au (1.15 oz/ton) across 1.0 metres
    -   Hole ST013 - 125.91 g/t Au (3.68 oz/ton) across 1.0 metres

    Mineralization remains open to the southeast on the Santa Teresa
Concession in several veins as well as at depth. To date, a total of
5,230 metres have been drilled in 21 holes in the Phase One program and
numerous assays remain pending. The joint venture has recently approved the
completion of a further 2,020 metres in nine new holes and two hole
extensions. These are expected to be completed by early October.
    "Drilling suggests a very robust vein system across multiple horizons",
stated Ewan Downie, President of Premier. "The narrow vein, extremely
high-grade gold system at Santa Teresa has similarities to some of the world's
prolific high-grade producing districts such as the Red Lake gold camp".
    The Santa Teresa Project is located adjacent to and on strike from the
past-producing Princessa Mine (the district's largest gold producer with an
average production grade of more than one ounce per ton), which was mined to a
maximum depth of only 110 metres, and whose orebody was known to extend close
to the northern boundary of the Santa Teresa Property.
    Gold production at El Alamo, a 16-kilometre long district, was halted at
its peak owing to technological and political circumstances early in the 20th
century. Since then, only minimal exploration has taken place, presenting a
unique opportunity for Premier and its joint venture partner Sutter Gold Mines
Inc. (TSX-V:SGM).
    Stephen McGibbon, P.Geo., Executive Vice-President and Chief Operating
Officer of Premier, is the qualified person for the information contained in
this press release and is a Qualified Person within the meaning of National
Instrument 43-101. A stringent QAQC program utilizing blanks, standards and
replicates has been developed by Mark Payne, Consulting Geologist, for the STC
joint venture. All sample prep and analysis is being conducted by American
Assay Laboratories Inc. of Sparks, Nevada utilizing conventional 1 assay-ton
fire assay and 500-gram screen metallic methods.

    Premier Gold Mines Limited is a fully financed Canadian-based mineral
exploration and development company with several projects and deposits in
Northwestern Ontario and a joint venture in Mexico. In the Red Lake gold
mining camp, two of these are operated in joint venture with Red Lake Gold
Mines. A strategic project is also located on the main Musselwhite Gold Mine

    The statements made in this Press Release may contain forward-looking
statements that may involve a number of risks and uncertainties. Actual events
or results could differ materially from the Company's expectations and

    %SEDAR: 00024152E

For further information:

For further information: Ewan Downie, President & CEO, Phone: (807)
346-1390, Fax: (807) 346-0100, E-mail:, Web Site:

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