Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

August 09, 2005 09:50 ET

Palmarejo Gold-Silver Project Best Drill Results From 108 Clavo to Date Results Support Guadalupe Exploration Model

LONGUEUIL, QUEBEC--(CCNMatthews - Aug. 9, 2005) - Palmarejo Gold Corporation (TSX VENTURE:PJO) is pleased to announce latest drill results from its Palmarejo Gold-Silver Project in the Temoris District, Chihuahua, Mexico. For more information about the project, please refer to the NI 43-101 Technical Report dated December 10, 2004 available at www.sedar.com under Palmarejo Gold Corporation.

Highlights

Hole PMDH349 drilled to intercept the deeper levels of the 108 clavo (mineralised shoot) returned 30.5 metres @ 6.1 g/t Au and 139 g/t Ag (8.3 g/t AuEq) together with a deeper 1.5 metre intercept at 12.9 g/t Au and below the limit of detection Ag.

This important result supports the interpretation that gold replaces silver as the dominant precious metal deeper in the epithermal system at the Palmarejo Project and the Guadalupe Project.

The 108 clavo is on the La Blanca structure 500 metres east from the 76 clavo. It is open further to the east and at depth.

Drilling results continue to demonstrate impressive intercepts in the other major clavos such as at Rosario and 76. Drilling emphasis is still on increasing resource confidence in the major clavos already drilled and exploring for further clavos in the continuation along strike of the two major structures, La Prieta and La Blanca. To this end drilling has commenced on the La Finca clay bloom 1,000 metres east of Halls clavo on the La Prieta structure.



Other drill results of significant interest are:

- 3.0 metres @ 1.9 g/t Au and 338 g/t Ag (7.1 g/t AuEq) (PMDH293 La
Blanca)
- 16.8 metres @ 2.4 g/t Au and 364 g/t Ag (8.0 g/t AuEq)
and 12.2 metres @ 3.6 g/t Au and 454 g/t Ag (10.6 g/t AuEq)
(PMDH296 La Prieta)
- 12.2 metres @ 2.1 g/t Au and 500 g/t Ag (9.8 g/t AuEq)
- and 3.1 metres @ 8.3 g/t Au and 1,190 g/t Ag (26.6 g/t AuEq)
(PMDH301 La Blanca)
- 15.2 metres @ 2.0 g/t Au and 322 g/t Ag (7.0 g/t AuEq) (PMDH309 La
Prieta)
- 4.5 metres @ 1.7 g/t Au and 289 g/t Ag (6.1 g/t AuEq) (PMDH311 La
Prieta)
- 1.5 metres @ 9.2 g/t Au and 10 g/t Ag (9.4 g/t AuEq) (PMDH322 La
Blanca)
- 6.1 metres @ 8.3 g/t Au and 345 g/t Ag (13.6 g/t AuEq) (PMDH337 La
Blanca)
- 9.1 metres @ 5.8 g/t Au and 996 g/t Ag (21.1 g/t AuEq) (PMDH338 La
Blanca)
- 22.9 metres @ 1.9 g/t Au and 244 g/t Ag (5.6 g/t AuEq) (PMDH341 La
Blanca)
- 16.7 metres @ 2.3 g/t Au and 258 g/t Ag (6.3 g/t AuEq) (PMDH342 La
Blanca)


There are currently 6 drill rigs, 3 reverse circulation ('RC') and 3 diamond core ('DD'), on site. Two bigger core rigs will be added this month.


One additional diamond rig is working at the Guadalupe prospect, located some 7 kilometres southeast of Palmarejo. More than 1.5 kilometres of strike length has been mapped at the Guadalupe Project which has a similar geologic setting to Palmarejo. Results from drilling at the Guadalupe Project have been reported separately.

As reported above, drilling has commenced on the La Finca prospect on the possible continuations of the La Prieta and La Blanca structures. This will add significant strike potential to the project of greater than 2 kilometres should additional clavos be discovered. Surface sampling and mapping have provided encouragement to follow the La Prieta further east.

Approximately 2.2 kilometres south of Palmarejo on the Los Hundidos structure (roughly parallel to the La Prieta/La Blanca structures) a 116 metre trench on the Cerro de Los Hilos prospect returned encouraging results higher in gold than silver. Cerro de Los Hilos is a bulk tonnage, low to medium grade target 200 metres vertically above and 500 metres east of the Los Hundidos workings. The Los Hundidos fault appears to be a vertically zoned system. Drilling will be undertaken soon after road access, currently under way, is completed.

Details of the reported drill hole locations are as follows:
(See tables at the following address: http://www2.ccnmatthews.com/database/fax/2000/pjo1Aug9.doc)

Assay Results

Assay results follow. Intercepts are generally perpendicular to the mineralised structures.
(See tables at the following address: http://www2.ccnmatthews.com/database/fax/2000/pjo2aug9.doc)



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 1:65.
- The internal voids are historic underground workings and have been
excluded from the mineralised intervals reported above.
- Results are awaited for RC drill holes PMDH304, PMDH321, PMDH339
and PMDH351.
- Results are awaited for diamond core drill holes PMDH136D,
PMDH240D, PMDH258D, PMDH285D, PMDH298D, PMDH299D and PMDH340D.
- In addition to these reported results, a number of geotechnical
drill holes have been completed.
- QVBX = quartz vein breccia.
- # = previously reported and included here for completeness.


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 webbsite (www.palmarejogold.com)

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