Premium Exploration Inc.
TSX VENTURE : PEM
OTCQX : PMMEF

Premium Exploration Inc.

August 21, 2012 19:41 ET

Premium Announces Private Placement of Senior Secured Debentures

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 21, 2012) - Premium Exploration Inc. (TSX VENTURE:PEM)(OTCQX:PMMEF) ("Premium" or the "Company") is pleased to announce that it has arranged a non-brokered private placement (the "Private Placement") of senior secured debentures (the "Debentures") of the Company to raise gross proceeds of up to $350,000.

The Debentures have a minimum face value of $1,000, each bearing interest of 15% per annum over a two year term issued together with bonus shares and bonus warrants. The Debentures are fully secured by the assets of the Company.

The principal amount and all accrued and unpaid interest shall be due and payable in full on August 31, 2014 (the "Maturity Date"). The Debentures all rank pari passu in priority among each of them and the principal and any accrued unpaid interest may be prepaid after one year from the date of issuance, in whole or in part (pro rata), provided that a pre-payment penalty must also be paid to Debenture holders equal to 75% of the amount of interest that would accrues as at the Maturity Date. The Debentures are non-convertible.

Subscribers will receive 2,000 bonus units (the "Bonus Units") for every $1,000 principal amount of Debentures they purchase in the Private Placement. Each Bonus Unit will consist of one common share (a "Bonus Share") and two common share purchase warrants (each whole warrant, a "Bonus Warrant"). Each Bonus Warrant will entitle the holder to acquire one common share of the Company at an exercise price of $0.15 per share for a period of 24 months from the date of issue.

The Bonus Shares and Bonus Warrants will be subject to a four month hold period pursuant to the policies of the TSX Venture Exchange (the "Exchange") and applicable securities laws.

The Company may pay fees to one or more finders in accordance with applicable securities law and Exchange policies. It is anticipated that such fees will be comprised of a cash commission of up to 8% of the applicable proceeds of the Private Placement together with 2,000 common share purchase warrants (the "Broker's Warrants") for every $1,000 principal amount of Debentures sold through the funder under the Private Placement. Each Broker's Warrant will entitle the holder to acquire a common share of the Company at the exercise price of $0.15 per share for a period of up to 24 months from the date of issue.

The net proceeds of the Private Placement will be for property payments on the Company's mineral properties and for additional working capital.

The Private Placement is subject the Exchange approval.

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 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 under the Company's profile on www.sedar.com in accordance with the policies and requirements of the TSX Venture Exchange and applicable securities law. 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. There are no assurances that the Company can fulfill such Forward-Looking Statements and the Company undertakes no obligation to update 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.

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