FOR IMMEDIATE RELEASE

October 12 2011

Premium Exploration Inc. (TSX-V:PEM, OTCQX:PMMEF) (�Premium� or the �Company�) is pleased to announce a drill program update and surface grab sample results from the recently acquired patented claims within the Deadwood Zone at the Idaho Gold Project.

Key Points:

�Encountering Friday Zone material 12 km away within the Deadwood Zone, along with excellent outcrop results, and gold-in-soils, further suggests the potential for multiple gold deposits along the regional trend,� stated Michael Ostenson, P.Geo., VP Exploration.

Grab samples (972816-972819) are taken from a quartz vein system along 50 meters of strike length and all returned +10 g/t Au results from the fire assay analyses. The balance of the grab samples are taken from sheared and altered country rock with up to 5% pyrite occurring as disseminated and in veinlets. 

Widely spaced drill-holes are drilled along a 400 metre portion of the 12 km gold-in-soil anomaly that trends through the Deadwood and Buffalo Gulch Zones and correlates with the 30 km OSZ structure.

First pass drilling is designed to discover bulk tonnage style mineralisation associated with the OSZ structure.  Alteration assemblages and sulphide mineralisation encountered in the first three drill-holes on the Deadwood patented claims (SD2011-1, 2, & 3), are similar to those seen in the surface grab samples reported in this release.

Large structures have been defined in the first three drill-holes and will be used as a guide to outline the size and geometry of the potential mineralised system.  The structures are similar to those controlling mineralisation at the Friday-Petsite resource 12 km to the south.  The structures at Friday-Petsite have been successfully used as the primary guiding feature for resource expansion.

High-Grade Vein Prospects - Secondary Target

The northern part of the Deadwood Zone is interpreted to comprise two types of gold bearing systems; an east-west high-grade quartz vein system, and a north-south disseminated lower-grade bulk tonnage system.  Premium�s primary focus is to define a bulk tonnage deposit.

The presence of the high-grade vein system has become a secondary drill target for Premium and the intersection of these two systems has the potential to host high-grade vein clusters within a large lower grade bulk tonnage deposit, thereby enhancing the overall grade.

There are at least 8 high-grade east-west vein systems along a 7 km segment of the +30 km OSZ within the Deadwood Zone with historically reported grades of over 1 oz/ton.  A large portion of the Deadwood Zone is therefore potentially open to new discoveries.

Veins can be up to a few metres in width and laterally extensive.  A number of these high-grade quartz veins have been historically mined.  Historical mining exploited the shallow oxide portions of the veins, leaving the sulphide portion of the vein open to depth.

The Deadwood Zone has several correlating features:

NI 43-101
Premium�s current NI 43-101 on the Friday-Petsite Zone along the Company�s Idaho Gold Project, was prepared for Premium by Mark I. Pfau, MSc. of Tellurian Exploration, Inc.  Mr. Pfau is an Independent Qualified Person as defined under NI 43-101.  The technical report has an effective date of March 28, 2011 and a revised date of September 30, 2011.

Quality Assurance
The Company has implemented a rigorous QA/QC program using best industry practices at the Friday-Petsite Property. The program includes chain of custody of samples, drill core sawn in half and shipped in sealed bags, blind duplicates, blank samples and certified standards are inserted in the sample stream. The samples are then boxed and couriered to Acme Analytical Laboratories of Vancouver, B.C. a lab certified for the provision of assays and geochemical analyses (ISO 9001:2008). Samples with gold values greater than 10 g/t are re-analyzed via the metallic screen procedure. Samples with visible gold are also analyzed using the metallic screen analysis, as are samples immediately preceding and following the sample with visible gold.  ALS Chemex is the check laboratory for the program.

Qualified Person
The 2011 Phase-Four exploration program is being directed by Michael Ostenson, P.Geo., VP Exploration of Premium Exploration Inc.  Mr. Ostenson is a Qualified Person as defined by NI 43-101. Mr. Ostenson prepared, and approves of the content in this release.