Premium Exploration Inc.

FOR IMMEDIATE RELEASE ON MAY 2, 2006

PREMIUM EXPLORATION, INC. ANNOUNCES START OF EXPLORATION IN MEXICO ALONG WITH NEWLY DISCOVERED HISTORIC HIGH-GRADE ASSAYS

VANCOUVER, BRITISH COLUMBIA–(CCNMatthews – May 2, 2006) – Premium Exploration, Inc. (TSX VENTURE:PEM) (“Premium” or the “Company”) (http://www.premiumexploration.com) is pleased to announce the start of the first phase of its 2006 exploration program on its Cucurpe Property located in Sonora, Mexico.  This exploration program was previously announced by the Company on April 11, 2006.  As discussed in the original announcement, the first phase of the 2006 exploration program for the Company’s Cucurpe Property is a $200,000USD soil sampling, trenching and mapping program that may be expanded to include a ground geophysical survey if warranted, based on the initial results of the program.  This initial sampling and mapping campaign will focus on the Buena Vista prospect and the La Providencia prospect located within the Company’s Cucurpe Property.  These two prospects represent just two of thirty-two prospects identified by the Company on its Cucurpe Property.  These two prospects were selected for the first phase of the 2006 exploration program based on the Company’s previous field work.  The Company has recently obtained new geologic information on these two prospects that confirms this initial exploration target selection.  This newly located information is in a report prepared and issued by Mr. Thomas Evans (the “Evans Report”), on June 28, 2004 and it documents a field reconnaissance and sampling program conducted by Mr. Evans on these two prospects. The report included the identification of at least one high potential exploration target on each of the prospects as follows:

• A historic underground artisan mining operation was located and sampled on the La Providencia prospect.  A 1.7 meter wide chip sample taken from the footwall of the underground mine workings that returned an assay result measuring 115.0 grams per tonne of gold (3.36 opt/Au).
• An apparent high-grade gold zone, described as the “Ridge Gold Zone” in the report measuring 300 meters long by 45 meters wide on the Buena Vista prospect where past artisan mining has occurred.  Sampling results from the Ridge Gold Zone returned gold values measuring as high as 13.87 grams per tonne (0.45 opt/Au), from a 4 meter glory hole chip sample.  Additional high-grade gold values were returned from samples collected on the Buena Vista prospect.  These samples were taken from outside the delineated Ridge Gold Zone and included a high assay result of 16.67 grams per tonne (0.54 opt/Au).

Discussion and Overview of the Evans Report

The Evans Report is based on a field reconnaissance and sampling program that Mr. Evans made of the La Providencia and Buena Vista prospects during April 2004.  This report was not written in conformance with the requirements of National Instrument 43-101, and the technical data disclosed herein should not be relied upon as such.  This report was made on behalf of other prospectors looking to acquire the Company’s Cucurpe Property before the Company completed its acquisition in 2004.  The work conduced by Mr. Evans on these prospects included the collection, documentation and assaying of a series of chip and grab samples from the each of the prospects.  All samples described in the report were collected by Mr. Evans who catalogued and maintained custody of the samples until they were delivered for assay to the ALS Chemex lab located in Hermosillo, Sonora, Mexico.  A description of each of the prospects is included below, along with a table presenting the assay results from the sampling program.  Mr. Evans is Registered Geologist #3218 in the State of California, United States of America and holds degrees in geology from the University of New Mexico and the University of Alberta.  Mr. Evans is the qualified person responsible for the technical disclosure in this press release under National Instrument 43-101.

La Providencia Prospect

La Providencia is an un-drilled prospect situated approximately 20 kilometers south of the Santa Gertrudis Mine from which Campbell Resources, Inc. (TSX VENTURE:CCH)(OTCBB: CBLRF) produced approximately 560,000 ounces of gold during the 1990′s.  It appears that the La Providencia prospect has been mined off and on by artesian miners for over 100 years from underground workings totalling 220 meters in length. Most of the historical production appears to have come from the main level of the underground workings where a 30-50 degree dipping quartz vein was stoped to the surface.  A limited amount of mining appears to have taken place on a footwall zone underneath the main quartz zone.  Mr. Evans took a 1.7 meter vertical chip sample from the footwall structure (listed below in the table as sample number LP-119) that returned an assay result of 115.0 grams per tonne gold (3.36 opt/Au).  Based on Mr. Evans review of historical pillar assays from the main quartz zone on the prospect is believed to have historical gold production grades averaging 22.5 to 30.0 grams per tonne (.75 to 1.00 opt/Au).

Geologically, the La Providencia prospect appears to occur in Mesozoic rocks consisting of meta-sediments and mafic volcanic and mononite-diorite sills and small stocks.  It is believed that these rocks have been subjected to intense and pervasive hematite flooding of both barren and ore bearing material. Faulting appears to have played a major role in localizing and displacing gold mineralization across the prospect. In his report, Mr. Evans concluded, “The main quartz zone that comprised most of the mining is emplaced in an east-west, 30-50 degree south dipping structure that appears to be faulted off some 80 meters inside the main adit.  Apparently the artisan miners did not find the faulted-off extension, as it may have faulted down beyond their reach.” In his report Mr. Evans further concluded, “The best exploration potential for additional ore on this prospect is the down dip from the old workings in the hanging wall stockwork zone and along strike up and down the ridge from the main area.  The faulted extension presents the Company with an excellent exploration target.”

Buena Vista Prospect

The Buena Vista prospect is also an un-drilled gold occurrence situated some 2.5 kilometers southeast of the La Providencia prospect. Mining at Buena Vista appears to have taken place for over 100 years based on the apparent age and condition of the old hand hewn timbers observed in the Buena Vista adit. It is at an elevation of 1351 meters and was driven into a northwest trending quartzite ridge, in a N80W direction, on a steeply south-dipping .5 meter to 1 meter wide quartz vein containing free gold and occasional galena and sphalerite. The Evans Report states, “This vein appears to have been rich because extensive mining appears to have taken place on the main adit level and down-dip to a lower level some 20 meter down slope. The main adit level is approximately 40 meter in length and ends in a 70 centimeter face of un-mined ore.”  A sample was taken from the adit face and the assay return a result of 16.67 grams per tonne gold (.54 opt/Au) and 40.43 grams per tonne silver (1.35 opt/Ag).

In his report Mr. Evans states, “The old time miners must have been extracting high grade and ended in mining half ounce per tonne of gold rock. They might well have been mining back in the high grade on their next round of mine development.  Had they kept going, they would have most likely intersected an intense and strongly gold mineralized quartz stringer vein system that crops out on the ridge above.”  According to the Evans Report, this vein system, referred to as the Ridge Gold Zone, strikes N30-45W and runs along the ridge for over 300 meters. The Ridge Gold Zone appears to have been tapped by the artisan miners with another adit 110 meters NW of the main adit.  This second adit is at an elevation of 1352 meters and inaccessible some 40 meters in due to its collapse.  This second adit appears to have been used as a haulage way for ore mined from the Ridge Gold Zone.  Mr. Evans found an elongated glory hole opening on the ridge top above the two adits. This glory hole is up to 15 meters wide and still shows quartz stringers in the walls, indicating significant potential mining widths down below. A 4 meter glory hole chip sample, listed as sample number BV-109 in the table below, was taken on the surface outcrop of the Ridge Gold Zone at an elevation of 1385 meters and assayed 13.87 grams per tonne gold (.45 opt/Au). A dump grab sample from a small trench, located 30 meters out from sample number BV-109, on a parallel quartz stringer zone assayed 6.59 grams per tonne gold (.21 opt/Au). Old pits and abundant quartz float were found on the downhill side from the location where sample BV-109 was taken, giving the Ridge Gold Zone a total width approaching 45 meters.

Geologically, the Buena Vista prospect appears to also be characterized by Mesozoic meta-sediments, mainly quartzite, with no intrusive rocks being observed. The quartz veins and stringer zone are steeply dipping varying from 60-80 degrees. The Ridge Gold Zone, as mentioned above, can be followed for almost 300 meters in a northwest direction.  According to the Evans Report other smaller vein zones are found at several other places on the prospect and appear to warrant drilling.

Contact Information:

Mr. Del Steiner
President and CEO
Premium Exploration, Inc.
(604) 682-0243

Email:

dsteiner@premiumexploration.com

This e-mail address is being protected from spam bots, you need JavaScript enabled to view it

- or -

Mr. Robert Rosenblat
Investor Relations
Premium Exploration, Inc.

(604) 760-0364

The information in this press release is not NI 43-101 compliant and should not be relied upon as such.  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 files 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.  Information contained in this news release includes information about adjacent properties on which we have no right to explore or mine. We advise investors in the United States that the SEC’s mining guidelines strictly prohibit information of this type in documents filed with the SEC. United States investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.