Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

August 08, 2005 10:34 ET

Palmarejo: Guadalupe Drill Results Continue to Encourage

MONTREAL, QUEBEC--(CCNMatthews - Aug. 8, 2005) - Palmarejo Gold Corporation (TSX VENTURE:PJO) is pleased to announce further drilling results from the Guadalupe Silver-Gold 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.

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').

The first Reverse Circulation ('RC') drill program (17 holes) was completed on July 6th, 2005. Assay results have been received for the remaining 11 reverse circulation (RC) holes and 8 diamond core holes. Full details are listed below but some highlights include:



- 4.6 metres @ 6.7 g/t Au and 1,316 g/t Ag (26.9 g/t AuEq) (TGDH014)
- 3.1 metres @ 0.3 g/t Au and 350 g/t Ag (5.7 g/t AuEq) (TGDH016)
- 6.1 metres @ 1.3 g/t Au and 265 g/t Ag (5.3 g/t AuEq) (TGDH012)
- 3.5 metres @ 0.7 g/t Au and 274 g/t Ag (4.9 g/t AuEq) (TGDH022D)
- 10.7 metres @ 0.4 g/t Au and 124 g/t Ag (2.4 g/t AuEq) (TGDH013)


This initial drill program was designed to test the high grade silver results returned from the surface trenching program across the Guadalupe structure.

The Guadalupe Project consists of a series of 1 metre to 5 metre 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.

The Guadalupe structure has flow banded rhyolites and rhyolitic tuffs in the footwall and epiclastic sediments and a dacite intrusive stock in the hanging wall. The Las Animas structure has epiclastic sediments overlying an amygdaloidal andesite on the footwall and epiclastic sediments on the hanging wall. Mineralisation has been identified in black sulphide bands hosted within a multi-phased hydrothermal quartz vein breccia.

Alteration studies have indicated that mineralisation at Guadalupe sits higher in the epithermal profile than at the Palmarejo Gold-Silver Project. Consequently, it is to be expected that mineralisation at Guadalupe in the initial exploration phase will be proportionately higher in silver than gold, while the reverse is expected to be the case at depth. To date, only the upper parts of the epithermal profile have been drilled.

Results from the RC program have confirmed the presence of the mineralised lenses ('clavos') along the Guadalupe structure. The Las Animas clavo thickens at depth, up to 9 metres wide and contains significant silver mineralisation (see drill holes TGDH022D and TGDH012). Results in drill hole TGDH013 confirm the down-dip continuity of the mineralisation in the Guadalupe clavo reported in drill hole TGDH001.

Results from the core holes (TGDH002D, TGDH007D, TGDH014D, TGDH018D, TGDH019D, TGDH020D and TGDH021D) are all situated in the Guadalupe clavo. The results have been very encouraging. Apart from the principal Guadalupe structure hosting high-grade silver mineralisation, the suite of rhyolitic dykes, domes and flows on the footwall contact also consist of narrow mineralised bands and veinlets that produce a broad zone (up to 15 metres wide) of anomalous mineralisation (0.5 g/t AuEq to 1.0 g/t AuEq).

Three diamond core holes have been drilled targeting the El Salto clavo and assay results are pending.

Diamond core drilling commenced on June 23rd, 2005 and to date 11 holes have been completed, including 3 diamond tails of RC drill holes. The Guadalupe and Las Animas structures have only been tested to a maximum depth of 60 metres below natural surface. Core drilling will continue to test the down-dip and strike extents of the Guadalupe structure.


Details of the reported drill hole locations are as follows: (see tables at) http://www2.ccnmatthews.com/database/fax/2000/pjo10808.doc

Assay results from the 11 RC drill holes and 5 diamond core holes at the Guadalupe Project reported below are of intercepts generally perpendicular to the target structures and include: (see tables at)
http://www2.ccnmatthews.com/database/fax/2000/pjo20808.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 diamond core holes TGDH023D to TGDH025D
- QVBX equals 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 website (www.palmarejogold.com).

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