Sep/18/2012


Premium Exploration Inc. (TSX-V:PEM; OTCQX:PMMEF) (”Premium” or the “Company”) is pleased to announce results from the metallurgical testing program on the Friday-Petsite pit-constrained gold resource which hosts 629,000 oz indicated Au in 21.5 Mt @ 0.91 g/t Au and 146,000 oz inferred in 5.9 Mt @ 0.77 g/t Au with a 0.4 g/t cut-off.

Results indicate that gold and silver react very well to cyanidation with excellent recoveries:

• Gold: 75% - 93%
• Silver: 17% - 81%

“The excellent recoveries are outstanding for this type of orogenic gold deposit and the results indicate a non-refractory nature to the sulfide mineralization,” stated Michael Ostenson, VP of Exploration. “This is a positive step forward in the advancement of the Friday-Petsite resource.”

The purpose of this metallurgical program was to test the new portion of the Friday-Petsite resource expanded in 2010 known as the lower region of the Main Zone and to confirm historical gold recoveries from the upper region of the Main Zone.

Metalurgical Program Highlights

• Gold recoveries up to 93% in the lower region of the Main Zone
• Gold recoveries up to 90% confirms historic results in the upper region of the Main Zone
• 86% average gold recovery from samples taken throughout the deposit

A total of 13 metallurgical samples were taken from fresh HQ size drill-core throughout the deposit to provide a representative combination of various intensities of alteration, brecciation/shearing, and sulfide mineralization in a range of gold grades.

Composites were from 1.5m to 2.0m in length and taken from holes drilled by Premium Exploration between 2009 and 2011 at various depths along strike of the deposit.

1 kg samples were ground to 10 mesh (2mm) and subjected to bottle-role cyanidation for 30 hours. Gold head grades ranged from 0.35 g/t Au to 5.92 g/t Au.

Cyanidation Testwork:

Analysis was carried out by SGS Minerals Services of Lakefield, Ontario. One kilogram of each sample was ground in a laboratory rod mill to a K80 targeting 60 µm. The mill discharges were placed in glass bottle and the pulp density adjusted to 50% solids (w/w) with fresh water. The samples were leached under the following conditions:

pH: 0.5 – 11 maintained and hydrated lime
NaCN Concentration: 0.5 g/L NaCN maintained
Retention time: 30 hours
Solution Analysis: Au, Ag
Residue Assay: Au in duplicate, Ag

After 30 hours, the samples were filtered collecting a pregnanat leach solution, and a residue. The residue was washed several times with water, dried, and duplicate 30 g aliquots of the dried residue were riffled out for determination of gold and silver content by fire assay. The pregnant leach solution was submitted for gold and silver assay.

NI 43-101 Technical Report
Premium’s current technical report on the Friday-Petsite Zone along the Company’s Idaho Gold Project was prepared for Premium by by Mr. Ronald Simpson, P.Geo, President of Geosim Services Inc. and independent “Qualified Person” under National Instrument 43-101 Standards of Disclosure for Mineral Projects (“NI 43-101”). The technical report has an effective date of May 31, 2012 and was filed on SEDAR on August 16th, 2012.

Quality Assurance
Premium Exploration maintains a 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 were also analyzed initially using the metallic screen analysis, as were the samples immediately preceding and following the sample with visible gold. ALS Chemex is the check laboratory for the program.

Qualified Person
The 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 is focused on gold exploration at its district-sized land package along the Orogrande Shear Zone (the “OSZ”) in North-Central Idaho, USA. The OSZ is a 30+ km regionally significant trending structure with multiple know zones of gold mineralization and, similar to many large gold belts, like the Carlin Trend in Nevada. Armed with a proven exploration strategy, 30 km of drill-ready targets, Premium is well positioned to create shareholder value through the exploration and development of this emerging gold district. For additional information, please visit us athttp://www.p