Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

April 12, 2006 09:16 ET

Palmarejo Silver and Gold Corporation: Guadalupe Project Yields High Gold and Silver Assays from Deeper Elevation Drilling

LONGUEUIL, QUEBEC--(CCNMatthews - April 12, 2006) - NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO) is pleased to announce a further result from the diamond drill program at the Guadalupe Project in the Temoris District, Chihuahua, Mexico.

The Guadalupe Project consists of a series of northeast dipping quartz veins that can be traced for 1,500 metres along strike with the northern portion of the structure known as Guadalupe and the southern portion known as Las Animas. The Palmarejo Project and Trogan licence area, including the Guadalupe Project which is within the Trogan tenements, is held by Company's 100%-owned Mexican subsidiary company, Planet Gold SA de CV.

Assays were received for hole TGDH055D drilled to test the down-dip potential in the gold-rich part of the Guadalupe structure beneath an area of strong clay alteration at Guadalupe North.



Significant assay results (1.0 g/t AuEq lower cutoff) are as follows:

- 12.0 metres @ 19.3 g/t Au and 638 g/t Ag (29.1 g/t AuEq)
(TGDH055D)
- 3.0 metres @ 1.0 g/t Au and 285 g/t Ag (5.4 g/t AuEq) (TGDH055D)


There are two mineralised intervals in drill hole TGDH055D. The upper zone returned 3.0 metres @ 5.4 g/t AuEq and the lower zone 12.0 metres @ 29.1 g/t AuEq. The hole pierces the Guadalupe structure at 1,190 metres elevation, 70 metres (vertical) below the nearest hole TGDH050D which returned 5.5 metres @ 1.9 g/t Au and 185 g/t Ag (4.8 g/t AuEq) and 8 metres @ 1.2 g/t Au and 172 g/t Ag(3.9 g/t AuEq).

The strongly mineralised zone is open along strike and down-dip. Further drilling is planned around TGDH055D to define the extent of the high grade.

The results from TGH055D continue to support the model of drilling beneath areas of strong clay alteration (clay blooms) concealing segments of well mineralised structures. The clay alteration zone has been mapped a further 500 metres beyond the northern limit of drilling at Guadalupe. Additional drilling is programmed in this northern area.

Details of the drill hole location are as follows:


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Hole Easting Northing Elevation Declination Azimuth Depth
(m) (degrees) (degrees) (m)
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TGDH055D 760811 3027795 1,572 -90 0 400.8
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Assay results received for hole TGDH_055D are as follows:

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Hole From To Interval Au Ag AuEq Comments
(m) (m) (m) (g/t) (g/t) (g/t)
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TGDH055D 318.7 321.7 3.0 1.00 285 5.4 Guadalupe North

and 367.0 379.0 12.0 19.3 638 29.1 Guadalupe North
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Note: Assays have been reported using a 1.0 g/t AuEq cut off, no top
cut; AuEq equals Au + Ag/65 based on a gold price of US$375
per ounce and a silver price of US$5.77 per ounce; no recovery
factor used due to current metallurgical data. All widths
approximate to true width.


Quality Assurance

Palmarejo Silver and Gold Corporation has put in place a rigorous QA/AC program consistent with National Instrument 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 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 Company's control, including statements regarding 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 for various reasons discussed throughout the Company's filing statement dated March 14, 2005, and particularly in the section entitled "Risk Factors".

For more information about the Company's projects, please refer to the NI 43-101 Technical Report dated October 20, 2005 available on SEDAR (www.sedar.com) or via the Company's website at (www.palmarejogold.com).

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

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