Premium Exploration Inc.

FOR IMMEDIATE RELEASE

VANCOUVER, BRITISH COLUMBIA?(Marketwire ? January 16, 2007) Premium exploration, Inc. (TSX?VPEM) is pleased to provide an update on its exploration activities at the Nueva Galicia gold?silver project in Nayarit State, Mexico. Premium?s Phase I, 2000m diamond drill program is in progress at Nueva Galicia, with assay results pending.

Surface Rock Sampling at Nueva Galicia

Ninety rock chip samples for geochemical analyses were collected from five showings at surface in the area of Phase I drilling. Data has been received from La Cholita, a zone in the property, where a previous operator obtained 219 g/t Au and 586 g/t Ag over 1.5 meters, and The Max, another 29?meter?wide vein?breccia?stockwork zone. Results are summarised in the table below.

La Cholita Showing Surface Rock Samples  

Significant high?grade results were obtained from the La Cholita Showing, including 32.96 g/t gold, 249 g/t silver over 1.0 meters , 3.15 g/t gold and 2496 g/t silver over 0.3 meters, and 11.34 g/t gold, 454 g/t silver over 1.0 meters. These results confirm the tenor of gold and silver grades reported by a previous operator. Significant variability between previous operator’s and Premium’s results are due to the nugget effect in these bonanza?grade ore shoots. A comparison of Radius Gold and Premium chip samples is presented in the table below.

Thirteen samples were collected at La Cholita, comprising eight continuous chip samples from two locations, plus four continuous chip locations from one location at Cholita 2, and one grab sample of float at Cholita 2. Results ranged from 4.4 ppb Au and 0.4g/t Ag, up to 26.1g/t Au (with 767g/t Ag), and up to 2496g/t Ag (with 3.15g/t Au). Five of the 13 samples returned >1g/t Au. Elevated values of As, Cu, Pb, Zn, Co, Sr, Sb and Bi are associated with Au?Ag mineralization. Assays are pending for three other showings.

Comparison of Radius Gold and PEM Continuous Chip Sample Geochemistry ? La Cholita

*Historical grade assayed by Radius Gold. Re?sampled by Premium at approximately the same sample location. Cholita and Cholita 2 are located 35m apart along strike of the mineralized structure.

The Max is a 29 meter?wide zone of multiple quartz veins, stockwork and breccia. Twenty?one continuous chip samples were collected along a roadcut exposed during road building for drilling access. Results range in value from 5.3ppb Au up to 527.6ppb Au (0.53g/t Au) with 30.7 g/t Ag in the main part of the zone. Three samples at the Max returned weakly anomalous with results > 100ppb Au. Weakly anomalous Cu, Pb, Zn, As, Sr, Sb are associated with the two highest grade samples (527ppb Au and contiguous sample 151ppb Au).

NSAMT Geophysical Survey Contracted for Nueva Galicia

Premium has contracted Zonge Engineering and Research Corporation of Tucson, Arizona to conduct an NSAMT (Natural Source Audio Magneto Telluric) geophysical survey totalling 20 line?km over the core area where drilling is underway, and where further phases of drilling are planned. Completion of a survey grid is underway, and the survey is scheduled to begin in February. NSAMT survey method is an exploration tool that has been used successfully to delineate structure, silicification and quartz veins in epithermal systems such as Nueva Galicia. NSAMT is useful for imaging both deep geologic structure and near?surface geology, and can provide significant detail. The survey will give information on the location and width of structures (veins, silicified zones and faults) at depth and will assist in the of definition drill targets to depths of up to several hundred meters.

Premium Drill Results from Nueva Galicia

Premium is awaiting assay results that have been delayed due an industry?wide backlog in the labs.

Qualified Person

Ms. Nancy Reardon, M.Sc.,P.Geo., VP Exploration of Premium Exploration, 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 of precious metals prospects in North America. 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 United States. 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

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.