Paramount Gold and Silver Corp.
FRANKFURT : WKN:A0HGK
TSX : PZG
NYSE Amex : PZG

Paramount Gold and Silver Corp.

June 17, 2010 09:00 ET

Paramount Gold and Silver Corp.: Drilling Expands New Gold/Silver Target at San Miguel

South San Francisco Bulk Mineable Discovery Adding Resource Potential

CHIHUAHUA, MEXICO--(Marketwire - June 17, 2010) - Paramount Gold and Silver Corp. (TSX:PZG)(NYSE Amex:PZG)(FRANKFURT:P6G) -

Resource definition drilling continues to progress successfully on bulk-mineable gold targets discovered by Paramount in December and January in the South San Francisco area of the San Miguel Project. Exploration work is also finding additional similar targets on the large San Miguel land package.

Christopher Crupi, CEO of Paramount stated, "drilling confirms that the San Francisco area is an important discovery with bulk-mineable resource potential we can define this year. We are also finding a number of new target opportunities where we can apply the knowledge gained at San Francisco to make new discoveries." Paramount owns a 100% interest in the 188,461 hectare (approximately 466,000 acre) San Miguel Project in the Palmarejo District of northwest Mexico, making it the largest claim holder in this rapidly emerging precious metals mining camp.

Mineralization at South San Francisco is shaped by a favorable combination of permissive volcanic and intrusive rock units along with structural intersections which together provide several controls for concentrating gold. Intermediate to acidic composition volcanic rocks and intermediate composition intrusions are host to the gold occurrences discovered at South San Francisco. These rocks are in contact with acidic composition shallow intrusive or extrusive dome rocks that have little gold in them but have served to create an intensive fracture system in the surrounding rocks. Structural intersections between northwest trending and east-west trending faults have also created an extensive fracture system that localized gold. Superimposing these different phases of rock preparation has created a mineralized zone extending about 400 meters in an east-west direction and more than 750 meters in a northwest direction.

Ongoing research at South San Francisco has identified several distinguishing characteristics that differentiate its style of gold occurrence from deposits elsewhere in the Palmarejo District. Hydrothermal alteration in the South San Francisco area has produced a more subtle surface expression and unique clay mineralogy distinguishing it from the vein-associated deposits like Palmarejo and San Miguel. In general, the precious metals are disbursed in the volcanic rocks in association with narrow fractures and quartz stockwork veins, rather than within well-defined quartz veins. The vertical zonation of quartz vein systems typical of the Palmarejo District are not in evidence at South San Francisco where gold concentrations are recognized at very shallow depths with less silver. South San Francisco type targets seem to be high level gold-rich systems geologically separate from the vertically zoned silver-gold systems previously identified in the Palmarejo District.

Recent results from the South San Francisco target area include:

South San Francisco Target Area

Drill Hole Drill Hole Type From (meters) To (meters) Length (meters) Au g/t Ag g/t
RCSF-10-06 Reverse circulation 141.7 147.8 6.1 0.85 19.6
    182.9 185.9 3.0 1.33 52.8
    224.0 272.8 48.8 0.91 5.6
    300.2 306.3 6.1 1.08 2.4
RCSF-10-7 Reverse circulation 73.2 102.1 28.9 1.74 29.8
    176.8 192.0 15.2 1.49 2.6
RCSF-10-08 Reverse circulation 25.9 36.6 10.7 0.98 19.7
    140.2 182.9 42.7 1.48 7.4
RCSF-10-09 Reverse circulation 192.0 199.6 7.6 0.43 3.3
RCSF-10-10 Reverse circulation 111.3 115.8 4.5 1.02 10.5
    140.2 153.9 13.7 1.36 9.9
    167.6 176.8 9.2 1.43 5.1
    195.1 198.1 3.0 1.30 12.7
RCSF-10-11 Reverse circulation 153.9 169.2 15.3 2.05 8.7
RCSF-10-12 Reverse circulation 45.7 54.9 9.2 1.33 27.7
    83.8 111.3 27.5 1.73 10.9
    138.7 153.9 15.2 0.55 3.2
    176.8 190.5 13.7 1.07 0.8
RCSF-10-13 Reverse circulation 9.1 13.7 4.6 1.11 10.2
    62.5 74.7 12.2 1.76 42.4
RCSF-10-14 Reverse circulation 109.7 112.8 3.1 1.03 5.3
SF-10-11 CORE 19.8 29.3 9.5 0.71 5.2
    82.8 88.9 6.1 8.78 36.4
SF-10-12 CORE 36.1 51.0 14.9 0.97 23.8
SF-10-15 CORE 20.0 24.5 4.5 0.90 9.5
    108.8 136.9 28.1 1.26 7.0
SF-10-16 CORE No significant results

Map of the San Francisco South Target may be seen at the following link: http://www.paramountgold.com/projects/images/SouthSanFranciscoTargetArea.pdf

Paramount continues to pursue its goal of defining 2 million ounces of new gold resource on the San Miguel Project. Achieving this goal would significantly increase the current NI 43-101 compliant resource (http://www.paramountgold.com/investors/mexico_43-101_report.asp ) the company has defined on the project. Drilling and surface exploration is also continuing on the project. This work is providing insight into other new target areas that have never been tested.

Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico SA de CV personnel under the supervision of Bill Threlkeld a Qualified Person as defined by National Instrument 43-101. An ongoing and rigorous quality control/quality assurance protocol is being employed in the program including blank, duplicate and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are being assayed at ALS Chemex in Vancouver, using fire assay atomic adsorption methods for gold and aqua regia digestion ICP methods for other elements. For more information on the Corporation visit the Company's website at www.paramountgold.com.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources: This press release uses the terms "indicated resources" and "inferred resources". We advise U.S. investors that while these terms are defined in and permitted by Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and are normally not permitted to be used in reports and registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves" as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable.

Contact Information

  • Paramount Gold and Silver Corp.
    Christopher Crupi
    CEO
    866.481.2233 / 613.226.9881
    or
    Paramount Gold and Silver Corp.
    Chris Theodossiou
    Investor Relations
    866.481.2233 / 613.226.9881