Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

September 19, 2007 09:35 ET

Palmarejo Silver and Gold Announces Updated Resource Statement

LONGUEUIL, QUEBEC--(Marketwire - Sept. 19, 2007) - Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO) (the "Company") is pleased to announce that an updated resource estimate has been completed by Mine Development Associates ("MDA") of Reno, Nevada for the Company's Guadalupe Project in Chihuahua State, Mexico as follows:

- Indicated mineral resource of 3.79 million ounces (Moz) of silver and 49,000 oz of gold; and

- Inferred mineral resource of 35.12 Moz of silver and 345,000 oz of gold (see tables below).

This September 2007 mineral resource estimate represents a significant increase on the first inferred resource estimate of 155,000 oz of gold and 19.57 M oz of silver for the Guadalupe project reported in October 2006.

The resource grade estimate has increased from 2.76 g/t of gold equivalent (AuEq) in October 2006 (all inferred resource) to 5.17 g/t AuEq (indicated resource) and 3.81 g/t AuEq (inferred resource).

This September 2007 resource estimate is based on results from drill holes up to and including TGDH130D (excluding TGDH128D). Results from subsequently completed drill holes reported in a press release dated September 13, 2007 were not available for inclusion in this resource estimate.

The Guadalupe project consists of a series of northeast-dipping quartz veins that have been traced for more than 2,000 metres along strike. There are three main prospects located along the Guadalupe structure known from north to south as Guadalupe Norte, Guadalupe and Las Animas. A fourth prospect, El Salto, lies between Las Animas and Guadalupe.

Mineralization at the Guadalupe project is characterized by an upper silver-rich epithermal zone that becomes progressively more gold rich (relative to silver) at depth. The resources reported in the table below remain open along strike and at depth. In addition, clay blooms identified several hundred metres to the north of Guadalupe Norte remain highly prospective.



Guadalupe Project
Summary Resource Statement September 2007

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Resource Tonnes Au Ag AuEq Au Ag AgEq AuEq
Category (g/t) (g/t) (g/t) (Oz) (Moz) (Moz) (Oz)
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Indicated 710,000 2.15 166 5.17 49,000 3.79 6.48 118,000
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Inferred 8,000,000 1.34 136 3.81 345,000 35.12 54.10 984,000
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Guadalupe Project Indicated Resources
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Cut-off
(g/t AuEq)
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Au Au Ag Ag
Depth Depth Tonnes (g/t) (Oz) (g/t) (Oz)
(0m to 150m) (150m+)
-----------------------------------------------------------------------
0.8 2.5 710,000 2.15 49,000 166 3,790,000
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1.5 2.5 610,000 2.49 49,000 184 3,610,000
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2.0 2.5 570,000 2.66 48,000 192 3,490,000
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2.5 2.5 540,000 2.78 48,000 196 3,400,000
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3.0 3.0 440,000 3.19 45,000 217 3,090,000
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5.0 5.0 220,000 5.13 35,000 303 2,090,000
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10.0 10.0 64,000 10.65 22,000 481 995,000
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Guadalupe Project Inferred Resources

-----------------------------------------------------------------------
Cut-off
(g/t AuEq)
-----------------------------------------------------------------------
Au Au Ag Ag
Depth Depth Tonnes (g/t) (Oz) (g/t) (Oz)
(0m to 150m) (150m+)
-----------------------------------------------------------------------
0.8 2.5 8,000,000 1.34 345,000 136 35,120,000
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1.5 2.5 6,500,000 1.63 337,000 157 32,530,000
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2.0 2.5 5,900,000 1.75 332,000 164 31,180,000
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2.5 2.5 5,600,000 1.83 327,000 168 30,040,000
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3.0 3.0 4,300,000 2.11 294,000 186 25,970,000
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5.0 5.0 1,600,000 3.64 185,000 264 13,400,000
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10.0 10.0 330,000 7.44 78,000 414 4,350,000
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Notes:

- A 0.8 g/t AuEq cut-off has been applied to Guadalupe model blocks above 150 metres depth from surface, and a 2.5 g/t AuEq cut-off has been applied to Guadalupe blocks below 150 metres depth. Only those blocks with higher interpolated grade than these cut-offs have been included in the resource statement above.

- Gold equivalent grades and ounces are calculated using a gold to silver ratio of 1:55 based on a review of historic gold and silver price ratios and projected Palmarejo Project metallurgical recoveries.

A report entitled "Updated Technical Report --Palmarejo-Trogan Project, Chihuahua, Mexico" prepared by Michael M. Gustin, P.Geo. and Neil B. Prenn, P. Eng., of MDA dated September 17 , 2007 has been filed by the Company on SEDAR at www.sedar.com. Mr. Gustin and Mr. Prenn are "qualified persons" as defined in National Instrument 43-101 under the Canadian Securities Act ("NI 43-101"), are independent of Palmarejo, and have reviewed and verified the scientific and technical mining disclosure contained in this press release.

The Updated Technical Report also includes a minor reclassification of a portion of the Palmarejo mineral resources as a result of information concerning historic mining that was recently reviewed by MDA. Additional information is contained in the Updated Technical Report available at www.sedar.com and at www.palmarejogold.com.

Mineral Resource Estimate Methodology

Gold and silver resources at Guadalupe were modelled and estimated by:

- evaluating the drill data statistically;

- constructing geologic and mineral domains on vertical cross sections at intervals ranging from 25 to 105 metre intervals throughout the extent of the structures comprising the mineralization included in this Guadalupe resource estimate;

- projecting the mineral domain interpretations horizontally according to the strike of the mineralization;

- carrying out geostatistical analyses to establish estimation parameters; and

- estimating gold and silver grades into a three-dimensional block model.

A total of 33 sections were individually interpreted for both silver and gold.

All modelling of the mineral resources was performed using Surpac®.

Grade interpolation was by inverse distance cubed into constrained mineral domains that were coded into block models; interpolation results were checked by polygonal and nearest-neighbour estimations, as well as statistical and visual methods.

Modelled grade ranges had bottom cut-offs of roughly 0.15 g/t Au and 15 g/t Ag. Capping of outlier assays was only necessary in the low-grade silver and gold domains.

Quality control on sampling at Guadalupe has been independently reviewed on three occasions since the commencement of drilling in June 2005 and found to be of an acceptable standard.

QA/QC Program

The Company has put in place a rigorous QA/QC program using best industry practices. A manual outlining the QA/QC procedures for the Palmarejo Project has been compiled and reviewed by Keith Blair, Msc, PGeo, of Applied Geoscience of Reno, Nevada. Mr. Blair is a qualified person under NI 43-101. Details about the QA/QC program are outlined in the Updated Technical Report.

Qualified Person

The scientific and technical information in this release is based on information compiled by Michael M Gustin of MDA, Reno, Nevada who is a Registered Geologist in the States of Utah and Washington and an independent Qualified Person by NI 43-101 standards, and by Kenneth M Phillips, geologist of VOP Mining Services Pty Ltd and a Director of the Company and of Bolnisi Gold NL (the Company's majority shareholder). Mr. Phillips is a Member of the Australasian Institute of Mining and Metallurgy and a Qualified Person by Canadian 43-101 standards. Mr. Gustin and Mr. Phillips have reviewed this release and have consented to the inclusion in this release of the matters based on their information in the form and context in which it appears.

Forward Looking Statements

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 resource estimate, potential mineralization, exploration results, completion of work program and studies, 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".

For more information about the Company's projects, please refer to the Updated Technical Report filed on SEDAR (www.sedar.com) on September 18, 2007. Additional information about the Company is available on SEDAR and on the Company'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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