Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

September 22, 2005 10:07 ET

Palmarejo Gold Announces its Decision to Call Outstanding Warrants

MONTREAL, QUEBEC--(CCNMatthews - Sept. 22, 2005) - Palmarejo Gold Corporation (TSX VENTURE:PJO) is announcing its decision to call the warrants issued upon the closing on March 21, 2005 of the business combination transaction involving the Corporation (the "Warrants"). As set forth in the original subscription agreement in respect of the purchase of the warrants of Palmarejo Acquisition Corporation which were exchanged for the Warrants, the Corporation has a call right pursuant to which it can accelerate the exercise of the Warrants any time after the date which is 180 days from December 21, 2004 if the closing price of the Corporation's common shares is above $1.75 for 20 consecutive trading days.

The closing price of the Corporation's common shares on September 21, 2005 was $2.80 and the closing price has been above $1.75 for 20 consecutive trading days. There are currently 3,605,500 financing warrants outstanding.

Concurrently, Bolnisi Gold NL, the Corporation's majority shareholder (Bolnisi owns approximately 82% of the Corporation's common shares and owns 12,500,000 Warrants issued by the Corporation) has indicated that it intends to exercise enough of its own warrants to maintain its current percentage ownership.

The Corporation intends to use the funds raised with the exercise of the warrants to pursue its exploration and development program on the Palmarejo project in Mexico.

To exercise their Warrants, Warrantholders must submit the Exercise Form (Exhibit "1" to the Warrant Certificate) along with payment of the exercise price (Cdn. $1.50 per warrant exercised) no later than 5:00 pm (Toronto time) on November 21, 2005 to Palmarejo Gold Corporation, 1111 St-Charles St. West, Suite 650, East Tower, Longueuil, Quebec, Canada J4K 5G4, Attention of Corporate Secretary.

Warrants that have not been exercised by November 21, 2005 will expire.

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. 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 filing statement dated March 14, 2005, and particularly in the section entitled "Risk Factors".

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

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