Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

November 24, 2006 10:08 ET

Palmarejo Silver and Gold Corporation Announces its Financial Results for the First Quarter Ended September 30, 2006

LONGUEUIL, QUEBEC--(CCNMatthews - Nov. 24, 2006) - Palmarejo Silver and Gold Corporation (the "Company")(TSX VENTURE:PJO) announces that its Interim Consolidated Financial Statements and Management's Discussion & Analysis for the first quarter ended September 30, 2006 have been filed on SEDAR (www.sedar.com). They are also available through CCN Matthews' website at the following address: http://www.ccnmatthews.com/docs/fin_sept_30.pdf and on the Company's website (www.palmarejogold.com).

(All dollar amounts in this press release are expressed in Canadian dollars, unless otherwise indicated).

Financial Results

Earnings for the first quarter ended September 30, 2006 totaled $484,000 or $0.01 per share compared to earnings of $60,000 or $0.00 per share during the corresponding period in 2005. The increased earnings are mostly due to higher interest income.

Interest income totaled $595,000 during the first quarter ended September 30, 2006 compared to $18,000 during the comparative period in 2005. The increase is attributable to the significant increase in the Company's cash and short-term investments position following the private placement (for net proceeds of $71,362,000) completed in April 2006.

Administrative expenses totaled $280,000 for the first quarter compared to $176,000 in 2005. Higher remuneration and travel, insurance and capital tax expenses explain this variance.

Stock-based compensation related to options granted in previous periods to purchase common shares of the Company amounted to $141,000 for the quarter compared to $237,000 in 2005.

After making adjustments for non-cash items in respect of stock-based compensation, gain on foreign exchange and net change in non-cash working capital items, cash from operations totaled $6,000 for the quarter compared to the use of cash from operations of $294,000 in 2005.

Investing activities

During the first quarter ended September 30, 2006, the Company invested a total amount of $8,495,000, including $7,944,000 in exploration and project development expenditures, $261,000 in plant and equipment and $290,000 in recoverable sales taxes. Exploration and project development expenditures include $1,558,000 for drilling activities, $1,989,000 for deposits on various equipment, such as the electrowinning system, filters and crusher, $1,046,000 for earthworks and civil construction, $1,157,000 for engineering studies and $2,194,000 for other development activities.

During the quarter, the Company paid $752,000 to the National Forestry Commission of Mexico to enable the future rehabilitation of specified disturbed land.

Financing activities

During the quarter, a total of 320,000 stock options were exercised for cash proceeds of $320,000.

Balance Sheet

At September 30, 2006, the Company's assets stood at $105,002,000 compared to $104,351,000 on June 30, 2006, and included $57,673,000 in cash and short-term investments, $5,802,000 in plant and equipment and $39,192,000 in capitalized exploration expenditures.

At September 30, 2006, the working capital totaled $59,047,000, compared to $67,059,000 on June 30, 2006 and shareholders' equity amounted to $104,042,000 on September 30, 2006 compared to $103,097,000 on June 30, 2006.

As at November 24, 2006, the Company has the following common shares and convertible securities outstanding: 90,602,406 common shares, 3,947,368 warrants and 4,731,665 stock options. As at the same date, Bolnisi owns 66,855,237 common shares, representing 73.8% of the total number of issued and outstanding common shares of the Company. Bolnisi also holds 1,052,618 warrants acquired from their participation in the April 2006 private placement.

Outlook

The Company, together with its controlling shareholder, believes that, with its current working capital, it will be able to meet its cash requirements for the remainder of the 2006 calendar year and well into 2007.

The Company is continuing its exploration and development activities at Palmarejo with the principal objective of advancing the project through the feasibility process and by conducting a significant amount of development work. Activities are also focused on drilling the Guadalupe and La Patria projects, as well as other identified prospects aimed at expanding the Company's mineral resources.

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 resources and reserves, completion of work program and studies, potential mineralization, exploration results 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.

Risks and Uncertainties

For a complete discussion of risk factors, please refer to the "Risk Factors" section of the Company's Annual Information Form dated October 12, 2006 and available on Sedar (www.sedar.com).

Palmarejo Silver and Gold Corporation is a silver and gold exploration company with projects in Mexico. Additional information is available on SEDAR and on the Company's website.

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.

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