Palmarejo Silver and Gold Corporation

Palmarejo Silver and Gold Corporation

August 24, 2007 13:05 ET

Palmarejo Silver and Gold Corporation Comments on Status of Short-Term Investments and Announces its Financial Results for the Year Ended June 30, 2007

LONGUEUIL, QUEBEC--(Marketwire - Aug. 24, 2007) -

Status of Short-term Investments

Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO) (the "Company") advises on the impact of recent disruptions in global credit markets on $6.9 million of its $8.5 million in cash and short-term investments. The amount of $6.9 million was invested in Canadian asset-backed commercial paper ("ABCP"). The remaining $1.6 million is held in cash not affected by this situation.

The Company's portfolio of short-term investments meets the criteria of its investment policy and was invested on the basis of professional advice from a major financial institution. The Company invested $6.4 million in Apsley Trust E and $0.5 million in Aurora Trust E. Each of these instruments matured last week but their maturities were not met and they remain outstanding.

The Company's ABCP investments were all rated R1-High (highest rating available for short-term commercial paper) by the Dominion Bond Rating Service ("DBRS") at the time they were purchased. While the DBRS announced last week that the investments are under review, the DBRS has rated the above trusts and their underlying assets as R1-High.

A consortium representing banks, asset providers and major investors have agreed in principle to take significant steps to re-establish normal operations in the market for Canadian asset-backed securities. These steps include all investors in such ABCP issuers to exchange their holding in each issuer for long-term note on an individual issuer and series basis. The term of the note would match the term of the assets within that ABCP issuer and series. The Company continues to monitor these developments.

Temporary Financing

The Company is in the process of securing a temporary financing with the National Bank of Canada in the amount of $2.0 million. Such financing which would expire on September 30, 2007 or at a date when the liquidity crisis is resolved, would bear interest at the prime rate less 1.50% and be secured by the investment accounts held at National Bank Trust.

Annual Financial Results

The Company also announces that its Consolidated Financial Statements and Management's Discussion & Analysis for the year ended June 30, 2007 have been filed on SEDAR ( They are also available through CCN Matthews' website at and on the Company's website (

Financial highlights (in Canadian dollars) for the year include capitalized project development expenditures of $54.3 million on its Palmarejo project located in the Temoris District of Chihuahua in Mexico, including various construction and engineering activities, such as road upgrade, earthworks, camp construction, fabrication and assembly of various mill components and modification of the ball and SAG mills and the leasing of mining equipment and a power station. The Company also invested $16.7 million in exploration expenditures on its Palmarejo, Guadalupe and other silver-gold projects located in the Temoris District of Chihuahua in Mexico, including $9.3 million for drilling activities.

At June 30, 2007, the Company's assets stood at $129.7 million and included $17.3 million in cash and short-term investments, $59.9 in capital assets and $48.0 in capitalized exploration expenditures. At June 30, 2007, the working capital totaled $5.1 and shareholders' equity amounted to $104.1 million.

The proposed merger agreement between the Company, Bolnisi Gold NL, the Company's majority shareholder, and Coeur d'Alene Mines Corporation is progressing and assuming timely completion of the required regulatory processes and receipt of the required shareholder and court approvals, the companies expect the transactions to be completed in the fourth quarter of calendar year 2007.

Forward-looking Statements

This news release contains forward looking statements. Forward-looking statements are not historical facts and are subject to a number of known and unknown risks and uncertainties beyond the Company's control. Statements relating to the effects and impacts of the market disruption are forward-looking information within the meaning of Canadian securities laws. These forward-looking statements are subject to a variety of risks and uncertainties which could cause actual events or results to differ materially from those reflected in the forward looking statements, including, ABCP market conditions, additional defaults under ABCP, the ability of ABCP funds to obtain funding from liquidity facilities supporting the ABCP, and other risks and uncertainties, including those described in the Company's Prospectus dated February 21, 2007 available on SEDAR. These statements may cause the actual results, levels of activity, performance or achievement of the Company to be materially different from any future results, levels of activity, performance or achievement expressed or implied by these forward looking statements.

Palmarejo Silver and Gold Corporation is a silver and gold exploration and development 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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