Palmarejo Silver and Gold Corporation

Palmarejo Silver and Gold Corporation

March 16, 2007 09:25 ET

Palmarejo Silver and Gold Announces Further High Grade Drill Results from the Guadalupe Project

MONTREAL, QUEBEC--(CCNMatthews - March 16, 2007) - Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO) is pleased to announce results from the diamond drill program at the Guadalupe Project in the Temoris District, Chihuahua, Mexico. The project is held by the Company's 100%-owned subsidiary, Planet Gold SA de CV.

The Guadalupe project consists of a series of northeast dipping quartz veins that have been traced for more than 1,500 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 total of 57 reverse circulation (RC) and 66 diamond core holes have been drilled for 12,055 metres and 19,223 metres respectively since drilling began at the Guadalupe project early in 2006.

Recent RC and diamond core drilling has focused on defining the depth and strike extents of the high grade clavos at the Guadalupe and Guadalupe Norte prospects. Some of the impressive assay results from this program are reported below and include the following intervals which are reported here as down hole intercepts. Where there is a difference between down hole and true width intercepts, these are noted in the table of full assay results below.

TGDH103D 7.00 metres @ 1.50 g/t Au and 170 g/t Ag (4.3 g/T AuEq) and
2.00 metres @ 7.86 g/t Au and 383 g/t Ag (14.3 g/t AuEq)
TGDH107D 2.00 metres @ 12.75 g/t Au and 421 g/t Ag (19.8 g/t AuEq) and
7.00 metres @ 0.96 g/t Au and 72 g/t Ag (2.2 g/t AuEq)
TGDH108D 11.50 metres @ 3.15 g/t Au and 56 g/t Ag (4.1 g/t AuEq)
TGDH109D 11.50 metres @ 2.45 g/t Au and 194 g/t Ag (5.7 g/t AuEq)
TGDH110D 10.50 metres @ 7.10 g/t Au and 292 g/t Ag (12.0 g/t AuEq) and
2.00 metres @ 43.52 g/t Au and 639 g/t Ag (54.1 g/t AuEq)
1.00 metre @ 85.66 g/t Au and 1264 g/t Ag (106 g/t AuEq)
TGDH111D 3.00 metres @ 1.65 g/t Au and 192 g/t Ag (4.9 g/t AuEq)
TGDH112D 8.00 metres @ 6.21 g/t Au and 67 g/t Ag (7.3 g/t AuEq)
1.00 metre @ 39.60 g/t Au and 58 g/t Ag (58.5 g/t AuEq) and
8.00 metres @ 3.09 g/t Au and 444 g/t Ag (10.5 g/t AuEq)

Wide, high-grade intercepts in holes TGDH108D, TGDH109D and TGDH110D continue to extend the margins of the Guadalupe Norte clavo down dip and along strike. Silver to gold ratios along with sulphide and gangue mineralogy (and textures) continue to indicate these holes have intersected the top of the epithermal mineralized profile based on the Palmarejo project geological model.

A narrow zone of high-grade gold was intersected in a separate structure beneath the main Guadalupe fault in TGDH110D (2.00 metres @ 43.52 g/t Au and 639 g/t Ag). This zone correlates with a high grade intercept 60 metres down dip in hole TGDH091D (6.00 metres @ 54.15 g/t Au and 115 g/t Ag). Visible gold is present in the footwall structure in both drill holes. Further drilling is underway to define the extents of this high grade gold mineralization.

A map of Palmarejo - Trogan Project is available at the following address:

Details of the drill hole locations are available at the following address:

Assay Results

Assay results for these drill holes not previously reported follow. Intercepts are generally perpendicular to the mineralized structures and therefore represent true widths. Calculated true widths are indicated where intercepts are oblique to structures.

A table of Assay Results is available at the following address:


- 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.

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

- QVBX equals quartz vein breccia.

- # equals previously reported and included here for completeness.

- 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.

- Results are awaited for drill holes TGDH102D, TGDH113D to TGDH117D.

A track-mounted, deep-penetration Major 50 diamond core rig arrived on the project this week. The Major 50 is programmed to drill deep targets down plunge of the high grade clavos at Guadalupe and Guadalupe Norte.

The following long section of the Guadalupe structure demonstrates continuity of silver and gold mineralization between the Guadalupe and Guadalupe Norte prospects. The clavo boundaries are defined by the 20 gram metre AuEq accumulation contours (using a gold to silver price ratio of 1:60). Assays and hole number are only shown for drill holes greater than 50 gram metres AuEq accumulation. The dashed line represents the lower limit of the October 2006 resource model.

A map of Guadalupe Longitudinal Section is available at the following address:

Quality Assurance

Palmarejo Silver and Gold Corporation has put in place a rigorous QA/QC program consistent with Canadian Securities Administrators National Instrument 43-101 ("NI 43-101") and 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 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 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 and its projects, please refer to the NI 43-101 Technical Report dated October 1, 2006 and other documents available on SEDAR ( or via the Company's website at (

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