Premium Exploration Inc.

FOR IMMEDIATE RELEASE OCTOBER 22, 2007

PREMIUM EXPLORATION ENTERS INTO LETTER OF INTENT TO ACQUIRE ADVANCED EXPLORATION PROPERTY WITH 531,890 OUNCE INFERRED GOLD RESOURCE

VANCOUVER, BRITISH COLUMBIA (Marketwire – October 22, 2007) – Premium Exploration, Inc. (TSX-V:PEM) (“Premium” or the “Company”) (http://www.premiumexploration.com/) is pleased to announce that has entered into a letter of intent to acquire the South Orogrande Shear Zone located in the State of Idaho, United States of America from Clearwater Mining Company (“CMC”).  The South Orogrande Shear Zone comprises two properties known as the Friday Petsite Property and the Dixie Property.

Over the past 20 years there has been extensive historical exploration work conducted on the South Orogrande Shear Zone that has been completed by several well known mining companies including Bema Gold Corporation, Cyprus Amax Minerals, and Kinross Gold Corporation.  Premium has reviewed a Technical Report meeting the criteria for NI 43-101 on the property prepared by Micon International, Ltd., (“Micon”) dated September 10, 2004. .  Micon describes the Friday / Petsite property as an Advanced Exploration Property and further concluded that the results of the historical exploration programs on the property have defined the following primary mineralized zones:

• A medium-sized disseminated gold deposit that was defined through at least 192 drill holes on 100 foot center spacing that is open along strike and at depth and potentially expandable through additional exploration. As further described in the 2004 Micon report and this press release, this deposit has an Inferred Resource meeting NI 43-101 standards at the following tons and cut-off grades:

In Premium’s preliminary review of the historical exploration data of this disseminated gold deposit, Premium has identified three additional targets, some of which are associated with geochemical / geophysical gold anomalies in the near vicinity of this deposit that have not been drill tested to date.

• A discrete high grade zone in a vein structure that is within the envelope of the medium sized disseminated gold deposit. This prospect has returns assay results up to 70 feet of gold mineralization averaging 9 g/ton, including 5 feet of 67.89 g/ton. An overview of historic drill results on the high grade zone is presented.

In its 2004 report Micon stated that with a gold price of over $400/oz the Friday / Petsite property is deserving of additional exploration programs to determine if the Inferred Resource estimates can be further upgraded to that of mineral reserves.  On October 16, 2007, the closing price of gold was approximately $760 per ounce.  In conjunction with the acquisition of the lode claims and associated drill inferred gold mineralization, Premium is also acquiring all available historical data including geological mapping, geochemical and geophysical surveys, drill logs, core samples, and other related geologic data.  Premium is currently reviewing this historical data on the South Orogrande Shear Zone and intends to conduct a drilling program, and will be engaging potential joint venture partners to further develop this project.

Under the terms and conditions of the of the Letter of Intent with Clearwater Mining Corporation, Premium will acquire a 100% interest in the South Orogrande Shear Zone subject to the following:

• Assumption of an underlying 1.0% Net Smelter Return Royalty on the Friday / Petsite property payable jointly to previous operators of the property that is capped at CDN$1,000,000.
• Assumption of an underlying 1.0% Net Smelter Return Royalty on the Dixie property payable jointly to previous operators of the property that is capped at CDN$1,000,000.
• Assumption of all other obligations of CMC under various agreements with third party property vendors for the South Orogrande Shear Zone.
• Assumption of the yearly US BLM Claim Maintenance Fees on the South Orogrande Shear Zone.
• In the event that PEM should vend or transfer the all or part of the South Orogrande Shear Zone to a third party within one year, PEM shall pay twenty five percent (25%) of all cash and stock based consideration that it receives in-turn for making the transfer to the third party. In the event that PEM spends CDN$500,000 on developing the property and more than one year passes before PEM transfer all or part of the South Orogrande Shear Zone to a third party then PEM shall pay to CMC CDN$200,000 and grant a fifteen percent (15%) net profits interest in the South Orogrande Shear Zone to CMC.

The acquisition of the South Orogrande Shear Zone by Premium is subject to all customary due diligence procedures, execution of final definitive acquisition agreements and approval of the TSX Venture Exchange as applicable.  No finder’s fees were paid as part of this transaction.  The transaction is a non-arms length transaction in that Ellen Steiner, wife of Del Steiner, President and CEO of Premium is a minority shareholder Clearwater Mining Corporation.  Idaho Consolidated Metals Corporation, the predecessor to Beartooth Platinum Corporation of which Del Steiner was President & CEO and Wilf Struck was V.P. of Exploration and Chief Operating Officer, explored and developed various exploration properties in Idaho including the South Orogrande Shear Zone from 1990 through 2001.

About the South Orogrande Shear Zone

The Orogrande Shear Zone is a gold mineralization belt that is 26 miles long in strike length and has 245 mapped prospects and mines with historically reported results of 0.5 oz gold in past producing mines which produced from small vein structures. There are disseminated deposits that are open along strike and at depth associated with the historic mines. This information has not been corroborated by Premium Exploration, nor does it meet the standards for 43-101 compliance, but it is provided for historical perspective. The property is located in the vicinity of Elk City, Idaho County, central Idaho, in the western United States.  The terrain is hilly, rather than mountainous, although local relief is sharp in places.  The elevations at which properties are located, range from 4,000 and 5,000 feet above sea level, and are heavily wooded. Due to extensive soil development, outcrop is less than would be anticipated based on the relief.  Premium believes the possibility exists to increase these historical resource estimates on the Friday / Petsite Property through further exploration work as the deposit is open to the north and south along strike and at depth.

Gold was first discovered in north-central Idaho in 1857. By 1860 the town of Pierce City had been established to supply the miners and function as a supply point for the exploration of the remainder of the region. Placer gold was discovered at Elk City, Idaho, just north of the Friday / Petsite Property in 1861. Between 1900 and 1932, some of the more extensive low-grade placer deposits in the surrounding area were worked by large scale mining hydraulic methods. The first quartz vein location was made in the Elk City district in 1870. In 1898 a discovery of high-grade gold in an outcrop at Buffalo Hump, in the vicinity of the South Orogrande Shear Zone, west of the current town of Orogrande stimulated exploration and mining activity in the district that continued until about 1916.  The United States Geological Service estimated in 1934 that from 1857 to 1916 approximately 2.5 to 3 million ounces of gold were produced in this region.

About the Friday-Petsite Property

The Friday / Petsite property consists of 120 claims and it includes the two past-producing mines locally known as the Orogrande Mine and the Frisco Pit. It is underlain by Proterozoic-age Belt Group metamorphic rocks intruded by the Cretaceous age Idaho Batholith and a Tertiary-age rhyolite quartz-eye porphyry stock. The mineralization is associated with a major regional structure called the Orogrande Shear Zone, and occurs within hydrothermally-altered zones within the sheared rocks. Additional mineralization is associated with the Tertiary-age stock. The following table presents the nature of drilling on the Friday – Petsite Property from 1984 – 2004.

Exploration to date has defined several important exploration prospects including:  i) a disseminated bulk tonnage prospect and ii) a high grade vein prospect.

Overview of the Friday / Petsite Disseminated Bulk Tonnage Prospect

Extensive exploration from the mid-1980′s to 1998, including reverse circulation (RC) and core drilling (at least 180 holes), and estimated to have cost about US$2.5 million, After completing its 1998 drill program on the Friday / Petsite Property, Kinross prepared an estimate of the mineral resources for the combined Friday-Frisco zones using Datamine modeling and planning software which incorporated all drill hole and survey data to that time. Surface sampling and trench data from the Frisco pit were also included. All available gold assay values greater than 0.25 oz/ton were cut to 0.25. Drill hole data were composited to 20 feet. The mineralized zone was divided into six domains with locally adjusted search orientations. Total resources at various cutoff grades from zero to 0.10 oz/ton Au were determined as set out in the table presented below. At a cutoff grade of 0.015 oz/ton, the total resource amounts to 16.73 million tons averaging 0.032 oz/ton Au. By applying what Kinross called a “potentially economic” cutoff grade of 0.025 oz/ton, an Inferred Resource of 7.8 million tons averaging 0.046 oz/ton was determined (359,400 contained ounces). Within this Inferred Resource, oxide material makes up 1.60 million tons at 0.048 oz/ton Au.

In preparing this estimate, Kinross used the Canadian Institute of Mining, Metallurgy and Petroleum (CIM) resource definitions and classification as in effect in early 1999, and the price of gold was approximately $290 per ounce. Kinross’ reported resource total at a cutoff grade of 0.015 oz/ton (0.5 g/t), highlighted in the table above, was converted by Micon in its 2004 report to metric units to be 15.17 million tonnes averaging 1.1 g/t Au. This includes about 18 % oxide mineralization. In its 2004 report Micon stated that this historical resource estimate complies with the definition of Inferred Mineral Resources as specified in Canadian National Instrument (NI) 43-101, and went on to further state that with the amount of drilling completed and the density of the drill pattern, that Micon was of the opinion that some of these resources may qualify as Indicated Mineral Resources.

As part of its exploration program on this prospect Bema Gold Corporation conducted bottle-roll and column testing on the resource mater with the latter showing 75% recovery of the gold in oxide material after 25 days. The bottle-roll tests showed recoveries of both oxidized and sulphide material to be in the range of 75% to 90%.

Overview of the Friday/Petsite High Grade Vein Prospect

Historic exploration drilling conducted by Cyprus Amax Minerals, Canden Capital Corporation and Beartooth Platinum Corporation on the property has identified a discrete high grade gold zone that appears to run alongside or as part of the Orogrande Shear. This exploration work to date has not established the extent of the high grade zone.  A summary overview of the various historic drill programs that intersected the high grade zone are presented below.

Cyprus Amax Minerals 1997 Drill Program

In 1997 Cyprus Amax Minerals drilled two HQ core holes denoted as PC-8 and PC-10 locating the high grade component of the Orogrande Shear Zone for the first time. Drill hole PC-8 intersected 60 feet of gold mineralization averaging 0.2 oz/ton, including 5 feet of 1.5 oz/ton, and drill hole PC-10 intersected 70 feet of gold mineralization averaging 0.3 oz/ton, including 5 feet of 2.19 oz/ton.

Canden Capital Corporation 2002 Drill Program

Canden Capital Corporation carried out a limited NQ core drilling program of 5 angled holes totaling 1,278 feet, focused on an area where two holes that were previously drilled by Cyprus Amax in late 1997 that intersected high grade gold mineralization. Canden’s objective was to determine the presence and extent of a potentially mineable zone. All the holes intersected gold mineralization in excess of 1g/t, the best intercepts being, in two holes, 4.6 g/t over 29.3 m (including 8.95 g/t over 4.5 m) and 3.03 g/t over 27.9 m.

Beartooth Platinum Corporation 2004 Drill Program

In 2004 Beartooth Platinum Corporation drilled 1,696 feet in 4 HQ angled core holes in the area previously drilled by Canden Capital and Cyprus Amax. The results confirmed the presence of the mineralized zone extending 250 m north-south and dipping steeply eastward, but did not fully delineate the zone. The full extent of this zone, however, was not established by this drill program.  The significant assay results are summarized in the following table:

About the Dixie Property

The Dixie Property comprises 17 claims and is located somewhat remotely near the South Orogrande Shear Zone.  It is not part of the South Orogrande Shear Zone, but may be associated with a second shear zone in the area that is similar to the South Orogrande Shear Zone. The underlying geology is that of igneous rocks intruding early Precambrian metamorphic rocks. Anomalous gold areas have been identified by stream sediment and soil geochemical sampling, but no meaningful follow-up work has been done. Premium intends to complete a general exploration program to investigate the anomalous areas in order to locate targets for drilling. The property is classified by Micon as an early-stage exploration property where geochemical surveys have outlined areas of anomalous gold values.

Qualified Person

Mr. Wilf Struck, P.Eng., geologic consultant to the Company, is the Qualified Person (“QP”) responsible for the technical disclosure in this press release, in accordance with National Instrument 43-101.

About Premium Exploration, Inc.

Premium Exploration, Inc. is a precious metals exploration company focused on exploration in North America, with an acquisitions focus on Mexico. Premium’s goal is to discover precious metal deposits that are strategically located in areas that would allow their profitable extraction, with minimal political, social or environmental risks. Current holdings are in Mexico and the USA. To maximize the possibility of realizing this goal, Premium’s exploration team continues to review early-stage projects located within under-explored precious metal belts that host multi-million ounce deposits. By acquiring prospects internally and financing some of them through joint venture partners, Premium is able to maximize the potential for discovery while mitigating risk and increasing shareholder value.  Additional information may be found on our website at http://www.premiumexploration.com/.

Contact Information:

Premium Exploration, Inc.

Brett Delaney / Christine Kopr

Investor Relations

(604) 682-0243

Email:

info@premiumexploration.com

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This press release contains certain “Forward-Looking Statements” within the meaning of Section 21E of the United States Security Exchange Act of 1934, and involve 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.  The TSX Venture Exchange has not reviewed and does not accept responsibility for the adequacy or accuracy of this release.