Premium Exploration Samples High Grade Gold and Encounters Friday Zone-Style Mineralisation at the Deadwood Zone

VANCOUVER, Oct. 12, 2011 - Premium Exploration Inc. (TSX VENTURE: 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:

- Surface grab samples have returned encouraging grades from two different mineralised systems. Premium's primary focus is a lower grade, bulk-tonnage target; however a higher grade cross-cutting quartz vein system has been recognised, which represents an attractive secondary target. Assay results from the surface grab sampling program are highlighted below.

Quartz Vein 	Altered Country Rock 	#972811 	1.48 g/t Au
#972 816 	19.37 g/t Au 	#972806 	1.80 g/t Au 	#972812 	0.61 g/t Au
#972 817 	42.46 g/t Au 	#972807 	0.05 g/t Au 	#972813 	0.17 g/t Au
#972 818 	54.05 g/t Au 	#972808 	0.50 g/t Au 	#972814 	0.81 g/t Au
#972 819 	33.88 g/t Au 	#972809 	0.09 g/t Au 	#972815 	0.21 g/t Au
		#972810 	0.10 g/t Au 	#972820 	0.97 g/t Au

- Drilling on the patented claims within the northern part of the Deadwood Zone has encountered similar alteration assemblages and sulphide mineralisation to those seen in grab samples.

- Deadwood drill-holes exhibit similar geological, structural, alteration, and sulphide mineralisation characteristics of the Friday Zone located 12 km to the south, which hosts the current NI 43-101 compliant resource.

- Deadwood is one of several mineralised zones along the 30 km Orogrande Shear Zone (OSZ) regional system; all mineralised zones are linked by the 30 km geophysical anomaly with co-incident 16 km gold-in-soil trends.

"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.

For a location map of the grab sample results, please click: http://bit.ly/DW_PatentedClaimsDrilling_Map.


The Deadwood Zone has several correlating features:

- 12 km gold-in-soil trend with soil sample results over 1.0 g/t Au and a high of 4.0 g/t Au

- Surface outcrop sampling in excess of >10 g/t Au

- Alteration and sulphide mineralization in drilling consistent with Friday Zone 12 km to the south

- All mineralization and alteration coincides with the main regional structure (OSZ) that links all the known mineralised zones at the Idaho Gold Project, including the current NI 43-101 compliant Friday-Petsite resource of 343,000 indicated oz in 11.8 Mt @ 0.90 g/t Au and 879,000 inferred oz in 26.4 Mt @ 1.04 g/t Au (0.5 g/t Au cut-off) at the Friday Zone.


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.


About Premium Exploration Inc.

Premium Exploration Inc. (TSX VENTURE:PEM)(OTCQX:PMMEF) is focused on gold exploration at its district-sized Idaho Gold Project along the Orogrande Shear Zone in North-Central Idaho, USA. The "OSZ" is a +30 km regionally-significant trending structure with multiple known zones of gold mineralization, similar to many large gold belts, like the Carlin Trend in Nevada. Armed with a proven exploration strategy, advancing gold resources, and 30 Km of drill-ready targets, Premium is well positioned to create shareholder value through exploration and the development of this emerging gold district. For additional information, please visit us at www.premiumexploration.com.


This press release contains certain "Forward-Looking Statements" within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involves a number of risks and uncertainties. Important factors that could cause actual results to differ materially from the Company's expectations are disclosed in the Company's documents filed from time to time with the TSX Venture Exchange and the British Columbia Securities Commission. All statements, other than of historical fact, included herein are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate, and actual results and future events could differ materially from those anticipated in such statements.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.



Contact Information

Premium Exploration Inc.
Mr. Del Steiner, President & Chief Executive Officer
(604) 682-0243
(604) 682-2499 (FAX)
dsteiner@premiumexploration.com, info@premiumexploration.com
www.premiumexploration.com

Opes Capital Inc.
Ms. Christine Kopr, Corporate Communications
(604) 682-0243
(604) 682-2499 (FAX)
ckopr@opescapitalinc.com
www.opescapitalinc.com