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Paramount Gold and Silver Returns Encouraging Results from Sleeper Gold Mine Project in Nevada

Paramount Gold and Silver Corp. (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) announced today assay results from the first four core holes drilled on the West Wood target at its 100% owned Sleeper Gold Mine Project in Nevada have returned gold values consistent with past production from the project and confirmed the resource model developed by the previous owner. Assay results from a further 14 holes completed at the Sleeper project are expected shortly.

In September, 2010 Paramount announced a $3 million exploration program designed to expand and upgrade resources at the Sleeper project. The exploration program had three main objectives, they were: [1] definition drilling to up-grade resources at the West Wood deposit and prepare it for a Preliminary Assessment [`PA`] of its economic potential; [2] delineation drilling to expand and evaluate resources at the Facilities deposit for possible inclusion in the PA; and [3] drill evaluation of up to six new priority targets on the property identified by Paramount's geological team.

Paramount CEO Christopher Crupi noted, "The evidence from the drill program suggests that we are likely to have success upgrading inferred resources to higher categories and increasing the overall size of the West Wood deposit. The first four holes targeted distinct gaps between previous drilling. All four intercepted good grades over excellent widths as predicted by the resource model. We can now proceed with the resource model provided by the previous owner with confidence. In addition, we encountered mineralized intervals in the hanging wall which provide evidence of continuity for several of these adjacent zones, likely enabling them to be classified as resources."

West Wood Vein Target

The West Wood target is on the southwest corner of the Sleeper Pit and has been extensively drilled to reveal a high grade core zone surrounded by lower grade gold concentrations. With characteristics similar to the original Sleeper deposit, this target has NI 43-101 compliant estimated resources of:

  • Indicated Resources of 16.96 million tonnes grading 0.98g/t of gold and 4.6g/t of silver containing 530,000 ounces of gold and 2.5 million ounces of silver at a 0.4g/t Au cutoff;
  • Inferred Resources of 390,000 tonnes grading 0.56g/t of gold and 2.3g/t of silver containing 10,000 ounces of gold and 30,000 ounces of silver at a 0.4g/t Au cutoff.

Six core holes totaling 1,705 meters, and three reverse circulation holes totaling 957 meters have been completed on the West Wood target. Drilling was conducted to determine the northern limits of the West Wood target and to upgrade resources. This work also obtained sample material for metallurgical testing and geotechnical information for conceptual pit planning to enable basic processing and engineering studies required for a PA. The southern limit of the West Wood target remains open under the historical waste dump and will be evaluated in the coming months in conjunction with evaluating the gold-bearing potential of the substantial amount of waste material from the former mine. Further results are expected shortly.

Facilities Target Area

The Facilities Target is on the eastern side of the Sleeper pit and is a broad area of continuous lower grade gold-bearing material. Several drill holes by previous operators encountered bonanza grade intersections but the drill spacing was too wide to define the extent and distribution of the higher grade material. It is anticipated that defining the limits of the higher grade intervals in the Facilities Target should have a positive effect on the grade of this resource. The current NI 43-101 resource estimate is the following:

  • Indicated Resources of 10 million tonnes grading 0.69g/t of gold and 7.8g/t of silver containing 220,000 ounces of gold and 2.5 million ounces of silver at a 0.4g/t Au cutoff;
  • Inferred Resources of 19.6 million tonnes grading 0.60g/t of gold and 6.7 g/t of silver containing 370,000 ounces of gold and 4.2 million ounces of silver at a 0.4g/t Au cutoff.

A program of eight reverse circulation drill holes totaling 2,330 meters, and one core hole of 261.8 meters was completed on the Facilities Target. These holes were designed to evaluate the continuity of existing bonanza-grade intersections. Results are expected shortly.

New Targets

Results from work at West Wood and Facilities have identified several new targets not previously considered. Ongoing work is dedicated to prioritizing other targets for drill testing. Originally, a drill campaign of approximately 1,250 meters was established for these target tests, however, the size and depth of identified targets may require expansion of this program.

This news release has been reviewed by Glen van Treek, a Vice President of the Company and William Threlkeld a Qualified Person pursuant to National Instrument 43-101. Although Paramount Gold is a U.S. domiciled corporation and a full SEC registrant, Paramount reports its mineral resources according to the Canadian standard known as National Instrument 43-101 to facilitate comparison with other similar companies that trade on the TSX.

Source: Paramount Gold and Silver Corp.

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