Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

October 06, 2005 12:08 ET

CORRECTION FROM SOURCE: Palmarejo Gold Announces Significant Widths of Gold-Silver Mineralisation at Depth in Las Animas, Guadalupe

LONGUEUIL, QUEBEC--(CCNMatthews - Oct. 6, 2005) - Corrections to the press release sent out at 9:21 AM this morning. In the 3rd paragraph, the 4th line should have read as follow :"All results from holes TGDH023D to TGDH036D have been received and some highlights (at a 1 g/t AuEq cutoff, gold to silver 1:65 and 1 metre internal waste) include :..."

In the paragraph titled "Discussion", the line starting with "the mineralized QVBX is 19 metres wide and dips...." should have read instead: "The mineralised QVBX is 19 metres (true width) and dips 45 degrees to 65 degrees northeast."

The complete and corrected version follows :

Palmarejo Gold Corporation (TSX VENTURE:PJO) is pleased to announce further results from its Guadalupe Silver-Gold Project in the Temoris District, Chihuahua, Mexico.

The Guadalupe Project is approximately 7 kilometres southeast of the Palmarejo Project on the 100% owned San Carlos tenement and is within the Trogan exploration licence area held by the Corporation's 100% owned subsidiary, Planet Gold SA de CV ('Planet Gold').

Drill hole TGDH035D, drilled to intersect deeper portions of the Las Animas clavo, returned 29.5 metres @ 2.84 g/t Au and 193 g/t Ag (5.81 g/t AuEq). This hole confirms the down-dip continuity of Las Animas and supports the exploration model that gold grades improve at depth. All results from holes TGDH023D to TGDH036D have been received and some highlights (at a 1 g/t AuEq cutoff, gold to silver 1:65 and 1 metre internal waste) include :"



- 29.5 metres @ 2.84 g/t Au and 193 g/t Ag (5.81 g/t AuEq) (TGDH035D)
- 6.5 metres @ 0.49 g/t Au and 99 g/t Ag (2.01g/t AuEq) (TGDH029D)
- 4.5 metres @ 0.92 g/t Au and 131 g/t Ag (2.93 g/t AuEq) (TGDH023D)
- 4.3 metres @ less than 0.05 g/t Au and 356 g/t Ag (5.43g/t AuEq)
(TGDH033D)
- 3.5 metres @ 1.44 g/t Au and 143 g/t Ag (3.64 g/t AuEq) (TGDH034D)
- 2.5 metres @ 0.66 g/t Au and 292 g/t Ag (5.15 g/t AuEq) (TGDH028D)
- 2.5 metres @ 0.88 g/t Au and 136 g/t Ag (2.97g/t AuEq) (TGDH030D)


This current drilling program is designed to test potential for high grade silver-gold mineralisation at depth along the Guadalupe structure. The results from TGDH035D confirm the Corporation's geological hypothesis of gold-silver occurrence at Guadalupe and give the Corporation confidence to expand its drilling program, subject to rig availability.

Diamond core drilling commenced on 23 June 2005 and 21 holes have been completed since the last announcement including 4 diamond tails of RC drill holes. The Guadalupe and Las Animas structures have only been tested to a maximum depth of 100 metres below natural surface.

The Guadalupe Project consists of a series of northeast dipping quartz veins that can be traced for 1,500 metres along strike. The northern portion of the structure is known as Guadalupe, the central portion is known as El Salto and the southern portion of the structure is known as Las Animas.

See map of "Guadalupe Geology Animas Discovery" at http://www.ccnmatthews.com/docs/guad1006.jpg

Details of the reported drill hole locations are available at the following address: http://www.ccnmatthews.com/docs/pjo1006.pdf

See map of "Guadalupe prospect" at http://www.ccnmatthews.com/docs/guad21006.pdf

Discussion

Drill holes TGDH024D to TGDH030D were drilled to confirm structural continuity between Las Animas and Guadalupe. All holes crossed the structure between 80 metres and 100 metres below surface. True width of the Guadalupe/Las Animas structure averages 8 metres. Mineralisation is characterised by quartz-vein breccia with high grade commonly localised near the footwall contact of the structure. Two mineralisation styles have been observed:

- Quartz-carbonate-base metals-Ag

- Quartz-carbonate-pyrite (approximately Au)

The quartz-carbonate-pyrite (approximately Au) style predominates at high levels in the main Guadalupe and El Salto structures. Visible gold, interpreted to be of supergene origin, has been identified at El Salto.

Hole TGDH035D targeted the Las Animas clavo at depth and intersected the main structure between 140 metres and 160 metres (below surface). The mineralised QVBX is 19 metres (true width) and dips 45 degrees to 65 degrees northeast. Gold values are higher near the hanging wall and footwall contacts relative to the central part of the structure, however Ag values are more uniform than Au throughout the mineralised interval. Both quartz-carbonate-base metals-silver and quartz-carbonate-pyrite mineralisation styles are present.

TGDH015D is a core tail of RC hole TGDH015 and shows the down-dip extension of the mineralisation encountered in drill hole TGDH016. Drill hole TGDH031D is a core twin hole of RC drill hole TGDH016. TGDH016 was abandoned and had bottom of hole mineralisation. TGDH031D not only twinned the RC hole but went beyond the RC hole depth to determine the extent of the mineralisation in the footwall splay.

Hole TGDH033D intersected a 4.35 metre wide zone of high Ag values (30 metres from surface) in a footwall structure oblique to the main Guadalupe Fault. This intercept supports the hypothesis that oblique footwall faults are significantly dilated and may contain high-grade silver mineralisation at shallow levels

Confirmation of high grades over significant widths at Las Animas permits confidence that additional clavos may exist at depth. Furthermore, numerous zones of high level clay alteration remain to be tested along strike to the north beyond the limit of existing drill coverage. Future drilling is planned to test down-dip and along strike of the main Guadalupe structure, and to further delineate the Las Animas clavo.

Qualified Person

The technical information contained in this release was compiled in accordance with the Listing Rules of the Australian Stock Exchange Limited, by a competent person who is a corporate member of the Australasian Institute of Mining and Metallurgy and who has consented to the inclusion of such technical information in the form in which it appears in this release. The competent person is Kenneth M. Phillips, geologist of VOP Mining Services Pty Ltd who is also a director of Bolnisi Gold NL, the Corporation's majority shareholder. Mr. Phillips is a qualified person under Canadian Securities Administrators National Instrument 43-101 ("NI 43-101").

Forward-looking statement

Some of the statements contained in this press release are forward-looking statements. Forward-looking statements are not historical facts, and are subject to a number of risks and uncertainties beyond the Corporation's control, including statements regarding completion of work program and studies, potential mineralization, exploration results and future plans and objectives of the Corporation. Resource exploration, development, and operations are highly speculative, characterized by a number of significant risks, which even a combination of careful evaluation, experience and knowledge may not eliminate, including, among other things, unprofitable efforts resulting not only from the failure to discover mineral resources but from finding mineral deposits which, though present, are insufficient in quantity and quality to return a profit from production. There can be no assurance that such statements will prove to be accurate and actual results could differ materially from those suggested by these forward-looking statements for various reasons discussed throughout the Corporation's filing statement dated March 14, 2005, and particularly in the section entitled "Risk Factors".

Additional information is available on SEDAR (www.sedar.com) and on the Corporation's website (www.palmarejogold.com).

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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