Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

November 16, 2006 09:28 ET

Palmarejo Announces New Drill Results at the Guadalupe Project

LONGUEUIL, QUEBEC--(CCNMatthews - Nov. 16, 2006) - Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO) is pleased to announce results from the diamond drill program at its Guadalupe project in the Trogan tenements, located in the Temoris District, Chihuahua, Mexico.

High Grade Gold Intercept In Deep Drilling

TGDH091D intersected the Guadalupe fault 65 metres down dip of the high-grade gold-silver intercept in hole TGDH055D (12.00 metres @ 19.34 g/t Au and 638 g/t Ag). The TGDH091D intercept included a 6.0 metre interval grading 54.15 g/t Au and 115 g/t Ag (56.1 g/t AuEq).

The Guadalupe project consists of a series of northeast dipping quartz veins that can be traced for more than 1,500 metres along strike. There are three main prospects known from north to south as Guadalupe Norte, Guadalupe and Las Animas.

Assays were received for holes TGDH091D and TGDH096D which drilled to test the presumed deeper, gold-rich level of the Guadalupe structure at the Guadalupe Norte prospect.

Significant down hole intercept assay results (1.0 g/t AuEq lower cut off) are as follows:



- 14.10 metres @ 1.07 g/t Au and 109 g/t Ag (2.9 g/t AuEq) and
6.00 metres @ 54.15 g/t Au and 115 g/t Ag (56.1 g/t AuEq) TGDH091D

- 33.50 metres @ 1.83 g/t Au and 160 g/t Ag (4.5 g/AuEq), including
12.00 metres @ 3.16 g/t Au and 263 g/t Ag (7.5 g/t AuEq) TGDH096D

Details of the drill hole locations are as follows:

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Total
Hole Northing Easting Elevation Azimuth Dip RC Core Depth
(m) (degrees) (Degrees) (m) (m) (m)
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TGDH091D 3027777 760917 1531 -75 291 0 426.30 426.30
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TGDH096D 3027777 760917 1531 -75 225 0 373.85 373.85
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A map of the Palmarejo - Trogan Project is available at the following
address: http://www.ccnmatthews.com/docs/trojanproject.pdf

Assay Results

Assay results received for these holes are as follows:

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From To Interval Au Ag AuEq
Hole (m) (m) (m) (g/t) (g/t) (g/t) Comments
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TGDH091D 311.00 312.00 1.00 0.00 65 1.0 QVBX (approx. 0.76 m
true width)
and 371.00 372.00 1.00 1.05 28 1.5 QVBX (approx. 0.76 m
true width)
and 380.90 386.00 5.10 0.76 148 3.2 QVBX (approx. 3.88 m
true width
and 387.50 388.50 1.00 0.42 69 1.6 QVBX (approx. 0.76 m
true width)
and 389.50 393.00 3.50 2.13 146 4.6 QVBX (approx. 2.66 m
true width)
and 393.50 395.00 1.50 1.81 71 3.0 QVBX (approx. 1.14 m
true width)
Bulked 380.90 395.00 14.10 1.07 109 2.9 QVBX (approx. 10.72 m
true width)
and 398.00 398.50 0.50 3.19 80 4.5 QVBX (approx. 0.38 m
true width)
and 399.50 402.00 2.50 128.67 246 132.8 QVBX (approx. 1.90 m
true width)
and 403.00 404.00 1.00 1.28 11 1.5 QVBX (approx. 0.76 m
true width)
Bulked 398.00 404.00 6.00 54.15 115 56.1 QVBX (approx. 4.56 m
true width)
-------------------------------------------------------------------------
TGDH096D 301.00 303.50 2.50 0.82 182 3.9 QVBX (approx. 2.41 m
true width)
and 304.50 305.00 0.50 0.25 44 1.0 QVBX (approx. 0.48 m
true width)
and 305.50 309.50 4.00 1.59 179 4.6 QVBX (approx. 3.86 m
true width)
and 310.00 313.00 3.00 1.98 108 3.8 QVBX (approx. 2.90 m
true width)
and 313.50 325.50 12.00 3.16 263 7.5 QVBX (approx. 11.59 m
true width)
and 327.00 334.50 7.50 1.07 87 2.5 QVBX (approx. 7.24 m
true width)
Bulked 300.00 334.50 33.50 1.83 160 4.5 QVBX (approx. 32.36 m
true width)
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Notes:

- Assays have been calculated using a 1.0 g/t AuEq cut off, no top cut and a gold to silver price ratio of 1:60.

- QVBX equals quartz vein breccia

- Bulked intercepts are calculated by weight averaging the grades between the given depths and incorporating a maximum dilution of 2 metres internal waste at less than the 1.0 g/t AuEq cut off.

- Metallurgical recoveries and smelter returns are assumed to be 100%.

The mineralized interval in TGDH096D also contained a narrow high-grade zone that graded 3.50 metres @ 7.87 g/t Au and 549 g/t Ag (17.0 g/t AuEq). Hole TGDH096D pierced the Guadalupe structure 80 metres southeast of the section containing holes TGDH055D and TGDH091D.

The results from holes TGDH91D and TGDH096D continue to support the model of drilling deep holes at Guadalupe. The bulk of the drilling to date has focused on the high level, silver-rich part of the structure corresponding to the top third of the Palmarejo deposit profile. Further deep drilling is planned to test the potential for high gold values at lower elevations on the fault. This drilling will concentrate initially on extending the high-grade clavo identified in holes TGDH055D, TGDH091D and TGDH096D.

The accompanying long section of the Guadalupe structure demonstrates the linear extent of mineralization and the early stages of drill definition of the emerging clavos. The clavo boundaries are defined by 20.0 grams AuEq per metre boundaries (using a gold to silver price ratio of 1:60). Assays and hole numbers are only shown for drill holes with greater than 50 grams AuEq per metre.

A map of the Guadalupe Longitudinal Section is available at the following address: http://www.ccnmatthews.com/docs/longitudinal.pdf

Quality Assurance

Palmarejo Silver and Gold Corporation has put in place a rigorous QA/AC program using best industry practice. The QA/QC program is independently supervised by Keith Blair, Msc, PGeo of Applied Geoscience of Reno, Nevada. Elements of the program include chain of custody of samples, standard and blank samples submitted to ALS Chemex, with each batch of samples, and a check assay program on a proportion of sample pulps with a second laboratory. Results from the QA/QC program have to date been satisfactory.

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 Company's majority shareholder. Mr. Phillips is a qualified person under Canadian Securities Administrators National Instrument 43-101 ("NI 43-101").

Additional Information

The Guadelupe Project is held by the Company's 100% owned Mexican subsidiary company, Planet Gold SA de CV. For more information about the Company's projects, please refer to the NI 43-101 Technical Report dated May 1, 2006 available on SEDAR (www.sedar.com) or via the Company's website at www.palmarejogold.com.

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 Company's control, including statements regarding completion of work program and studies, potential mineralization, exploration results and future plans and objectives of the Company. 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 Company's Annual Information Form dated October 12, 2006, and particularly in the section entitled "Risk Factors".

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

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