Palmarejo Silver and Gold Corporation
TSX VENTURE : PJO

Palmarejo Silver and Gold Corporation

April 27, 2007 10:27 ET

Palmarejo Siver and Gold Reports on Activities for the Quarter Ended March 31, 2007

MONTREAL, QUEBEC--(CCNMatthews - April 27, 2007) - Palmarejo Silver and Gold Corporation (TSX VENTURE:PJO)(the "Company") is pleased to report on the activities at its projects during the last quarter. The Company has a 100% interest over a number of tenements which all collectively comprise the Palmarejo Project and surrounding Trogan licence area. The Palmarejo project and Trogan licence area are located some 15 kilometres northwest of the town of Temoris in Chihuahua State, Mexico and extend some 16 kilometres from Tres de Mayo in the south-southeast to beyond Palmarejo in the north-northwest.

As shown in the map below, the Palmarejo project and Trogan licence area contain a number of mineralized properties of interest which are under investigation by the Company. The most important of these to date is the Palmarejo Project in the Chinipas municipality in the far north of the area of interest which covers the old Palmarejo gold-silver mine based on the La Prieta and La Blanca gold-silver bearing structures.

In addition to the Palmarejo project, satellite imagery interpretation, reconnaissance alteration mapping with a short wave infrared spectrometer and geological mapping has identified mineralized vein and alteration systems in the Trogan licence area located on four other strongly mineralized corridors including:

- the Guadalupe-Las Animas trend;

- Todos Santos-La Patria-La Virginia-Maclovia;

- the Guerra al Tirano trends; and

- the Los Hundidos trend.

Most activity to date has been carried out at Guadalupe-Las Animas with increasing activity at Todos Santos-La Patria-La Virginia-Maclovia.

A map is available on the CCNMatthews website at the following address: http://www.ccnmatthews.com/docs/Palmarejo_map1.jpg

PALMAREJO PROJECT DEVELOPMENT

In summary:

- Concrete foundations are well advanced.

- Erection of steel leach tanks has commenced on site.

- Structural steel work fabrication has been completed.

- Camp construction underway.

- Purchase order, subject to finance, issued for mining equipment.

- Mining tender documents issued to mining contractors.

During the March 2007 quarter, project development work has continued including:

Engineering, Procurement, Design and Construction Management

Concrete foundation work at the lower plant site was well advanced by the end of the quarter and erection of steel carbon-in-leach tanks and intensive cyanidation tanks had commenced.

Steel fabrication work in Chihuahua is complete and the tank plate sections have been transported to site.

Purchase order commitments and expenditure totalled approximately US$50.4 million at the end of the March 2007 quarter (excluding mining equipment). Additional orders placed during the quarter included the lime slaking plant, plant instrumentation, road hydraulic works contract and assay laboratory equipment.

Tenders for the pipe work, electrical and mechanical installation are scheduled to be awarded during the next quarter.

The mill modification work underway in South Africa is almost complete and the shell sections are scheduled to be shipped to Mexico during the next quarter.

Infrastructure

Widening and the modification of the 100 kilometre section of road between San Rafael and Palmarejo is well advanced with just a few sections near Palmarejo that require some blasting to be completed.

Access road construction and further borrow material investigative work for the tailings dam construction commenced towards the end of the quarter.

The construction of the staff camp has been progressed over the quarter. All materials are on site and the main buildings have been erected.

Mining

Mine Design Associates (MDA) in Reno, Nevada have completed most elements of the mining study. Additional support work including a follow-up geotechnical review was still in progress at the end of the quarter.

Mining tender documents were issued to prospective mining contractors during the quarter.

A purchase order, subject to finance approval by Caterpillar Finance, was issued for the purchase of mining, drilling and ancillary equipment to commence the open-cut mining of the Palmarejo deposit. Equipment items are scheduled to be ready for shipment from the factories in May 2007.

PALMAREJO PROJECT DRILLING AND ASSAY RESULTS

Drilling at the Palmarejo project during the March 2007 quarter was carried out with a single RC rig at the Palmarejo Norte prospect. No drilling was completed on either the La Blanca or La Prieta structures. Since exploration drilling began at the Palmarejo project in November 2003, a total of 103,240 metres of reverse circulation ('RC') drilling and 39,122 metres of diamond core drilling have been completed.

Palmarejo Norte

Palmarejo Norte, located 1.0 kilometre north of Palmarejo, is the continuation of the main Palmarejo structure extending from the Rosario clavo where the La Blanca and La Prieta structures come together.

Four RC holes for 387 metres were drilled at Palmarejo Norte during the March quarter. The drilling failed to encounter quartz on the extension of the Palmarejo structure. Several additional holes will be completed to finish the program at Palmarejo Norte.

Details of the drill hole locations not previously reported are as follows:



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Eleva Total
-tion Azimuth Dip RC Core Depth
Hole Northing Easting (m)(degrees)(Degrees) (m) (m) (m)
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PMDH650 755456 3032666 1000 55.5 -73.5 102.11 0.00 102.11
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PMDH651 755473 3032619 988 50.0 -58.0 105.16 0.00 105.16
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PMDH652 755467 3032563 978 48.6 -70.0 80.77 0.00 80.77
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PMDH653 755458 3032459 963 54 -66.5 99.06 0.00 99.06
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Assay Results

No significant intercepts were encountered in these drill holes.

TROGAN EXPLORATION PROJECTS

As noted above, in addition to the Palmarejo project, satellite imagery interpretation, reconnaissance alteration mapping with a short wave infrared spectrometer and geological mapping has identified mineralized vein and alteration systems in the Trogan licence area located on four other mineralized corridors including:

- the Guadalupe-Las Animas trend;

- Todos Santos-La Patria-La Virginia-Maclovia;

- the Guerra al Tirano trends; and

- the Los Hundidos trend.

Guadalupe-Las Animas

The Guadalupe project is located within the Trogan tenements, approximately 7.0 kilometres southeast of the Palmarejo project and incorporates the Las Animas, Guadalupe and Guadalupe Norte prospects.

The Guadalupe project is located on the greater than 2.5 kilometre long Guadalupe fault system. Silver-gold mineralization is hosted by northeast dipping quartz breccia veins (QVBX) and an associated quartz stockwork envelope. There are three main prospects located along the Guadalupe structure known from north to south as Guadalupe Norte, Guadalupe and Las Animas.

Since exploration drilling began at the Guadalupe-Las Animas project in June 2005, 57 reverse circulation ('RC') holes (including 7 holes for diamond core precollars) and 70 diamond core holes have been drilled for a total of 12,055 RC metres and 20,973 core metres. Since the end of the previous quarter the emphasis has been on diamond core drilling with 8 metres of RC drilling and 5,632 metres of diamond core being completed.

The Guadalupe inferred resource which was announced in October 2006 (5.7 million tonnes @ 0.83 g/t Au and 106 g/t Ag for a total of 510,000 ounces AuEq) was estimated using the following parameters:

- A 0.8 g/t AuEq cut-off was applied to Guadalupe above 1,300 metres elevation.

- A 3.0 g/t AuEq cut-off was applied to Guadalupe below 1,300 metres
elevation to reflect the probable necessity for underground access to mineralization.

- Only those blocks with higher interpolated grade than these cut-offs were included in the resource statement.

- Gold equivalent grades and ounces are calculated using a gold to silver ratio of 1:55 based on gold and silver prices and projected metallurgical recoveries.

This Guadalupe resource estimate is based on results from drill holes up to and including TGDH086D (excluding TGDH079D) and does not include any subsequently drilled holes (TGDH087 to TGDH120D). Only 6 holes influenced the gold grade in the October 2006 resource estimate (such as TGDH065D and TGDH055D) but even these are still high in the epithermal profile. Drilling deeper into the profile has continued since the resource estimate and the Company continues to hold high expectations for this property and further clay blooms which occur several hundred metres to the north of Guadalupe Norte beneath which mineralized quartz veins may occur. These clay blooms have not yet been drilled.

Recent drilling has concentrated on delimiting the depth and strike extent of the clavos at the Guadalupe and Guadalupe Norte prospects and extending zones of high grade mineralization encountered at Guadalupe Norte.

Some of the impressive assay results from drilling during the March 2007 quarter include the following intervals which are reported here as down hole intercepts. Details of the location of drill holes and assay results since the last quarterly report have been reported in full by the Company and are included on the Company's website.



- TGDH094 10.67 metres @ 0.61 g/t Au and 108 g/t Ag (2.4 g/t AuEq) and
3.05 metres @ 0.40 g/t Au and 191 g/t Ag (3.6 g/t AuEq)
- TGDH095 18.29 metres @ 0.50 g/t Au and 77 g/t Ag (1.8 g/t AuEq) and
10.67 metres @ 1.28 g/t Au and 28 g/t Ag (1.8 g/t AuEq) and
10.67 metres @ 0.98 g/t Au and 17 g/t Ag (1.3 g/t AuEq)
- TGDH097D 29.00 metres @ 0.87 g/t Au and 87 g/t Ag (2.3 g/t AuEq)
including
8.00 metres @ 1.97 g/t Au and 142 g/t Ag (4.4 g/t AuEq) and
11.95 metres @ 0.52 g/t Au and 30 g/t Ag (1.0 g/t AuEq)
- TGDH099 9.14 metres @ 0.52 g/t Au and 92 g/t Ag (2.1 g/t AuEq)
- TGDH100D 17.00 metres @ 0.42 g/t Au and 68 g/t Ag (1.6 g/t AuEq) and
8.00 metres @ 2.05 g/t Au and 77 g/t Ag (3.3 g/t AuEq) and
26.00 metres @ 9.50 g/t Au and 259 g/t Ag (13.8 g/t AuEq)
including
7.00 metres @ 31.02 g/t Au and 830 g/t Ag (44.9 g/t AuEq)and
13.00 metres @ 3.58 g/t Au and 10 g/t Ag (3.8 g/t AuEq)

- TGDH101 13.72 metres @0.73 g/t Au and 136 g/t Ag (3.0 g/t AuEq)
- TGDH104 4.57 metres @ 0.96 g/t Au and 165 g/t Ag (3.7 g/t AuEq) and
15.24 metres @ 1.13 g/t Au and 132 g/t Ag (3.3 g/t AuEq)
- TGDH106 12.19 metres @ 0.64 g/t Au and 110 g/t Ag (2.5 g/t AuEq)
- 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)
including
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)
including
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)
- TGDH114D 19.50 metres @ 3.21 g/t Au and 142 g/t Ag (5.6 g/t AuEq)
including
6.00 metres @ 8.18 g/t Au and 302 g/t Ag (13.2 g/t AuEq)
- TGDH115D 16.50 metres @ 1.83 g/t Au and 156 g/t Ag (4.4 g/t AuEq) and
9.00 metres @ 1.69 g/t Au and 85 g/t Ag (3.1 g/t AuEq)
- TGDH116D 13.00 metres @ 1.10 g/t Au and 84 g/t Ag (2.5 g/t AuEq) and
7.00 metres @ 2.57 g/t Au and 16 g/t Ag (2.8 g/t AuEq)
- TGDH117D 9.50 metres @ 0.50 g/t Au and 77 g/t Ag (1.8 g/t AuEq)


Results are awaited for drill holes TGDH102D and TGDH118D to TGDH120D.

The following long section of the Guadalupe structure (prepared on the basis of drill data at 15 March 2007), 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 numbers 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 is available on the CCNMatthews website at the following address: http://www.ccnmatthews.com/docs/Palmarejo_map2.jpg

Drilling will recommence next quarter at Las Animas at the south end of the Guadalupe structure to test for extensions to the wide, well mineralized intercepts encountered in holes TGDH035D (29.50 metres @ 2.99 g/t Au and 196 g/t Ag) and TGDH046D (16.50 metres @ 2.76 g/t Au and 92 g/t Ag).

Further, deep diamond drilling at the Guadalupe and Guadalupe Norte prospects has continued to demonstrate the down-dip continuity of the wide zones of high grade mineralization first intersected in holes TGDH055D (12.00 metres @ 29.9 g/t AuEq and 3.0 metres @ 5.7 g/t AuEq), TGDH91D (10.72 metres @ 2.9 g/t AuEq and 4.56 metres @ 56.1 g/t AuEq) and TGDH96D (32.36 metres @ 4.5 g/t AuEq). These emerging clavos have now been encountered at depths below 1,150 metres elevation suggesting that they have a vertical extent on the structure of at least 200 metres and additional deep drilling is planned to further evaluate the depth potential of these clavos.

Todos Santos-La Patria-La Virginia-Maclovia

The La Patria-La Virginia-Maclovia section of Todos Santos to Maclovia mineralized corridor ('La Patria') structure is a 1.7 kilometre section of the greater than 4 kilometre long Todos Santos to Maclovia mineralized corridor located 6.5 kilometres south-southeast of the Palmarejo project and 4 kilometres southwest of the Guadalupe project.

Since exploration drilling began at the La Patria project in early 2006, 75 RC holes and 30 diamond core holes have been drilled for a total of 13,161 RC metres and 8,316 core metres. Since the end of the previous quarter 22 RC holes were drilled for 4,706 metres and 11 diamond core holes were drilled for 3,399 metres of diamond core drilling.

The La Patria inferred resource which was announced in January 2007 (3.6 million tonnes @ 1.49 g/t Au and 35 g/t Ag for a total of 244,300 ounces AuEq) was estimated using the following parameters:

- A 0.8 g/t AuEq cut-off was applied to the La Patria resource estimate.

- Only those blocks with higher interpolated grade than this cut-off was included in the resource statement.

- Gold equivalent grades and ounces are calculated using a gold to silver ratio of 1:55 based on gold and silver prices and projected metallurgical recoveries.

- The resource includes all mineralization between present day topography and an identical surface created 200 metres lower, as an approximation of material potentially available for open pit extraction, as required by the Australian JORC and Canadian NI 43-101 Codes.

This La Patria resource estimate is based on results from drill holes up to and including LPDH061D (excluding LPDH060D) and does not include any subsequently drilled holes (LPDH062D to LPDH097).

Some of the impressive assay results from drilling during the March 2007 quarter include the following intervals which are reported here as down hole intercepts. Details of the location of drill holes and assay results since the last quarterly report have been reported in full by the Company and are included on the Company's website.



- LPDH060D 9.50 metres @ 1.11 g/t Au and 12 g/t Ag (1.3 g/t AuEq)
- LPDH062D 8.80 metres @ 1.13 g/t Au and 5 g/t Ag (1.2 g/t AuEq)
- LPDH063D 24.00 metres @ 3.57 g/t Au and 43 g/t Ag (4.3 g/t AuEq)
including
2.00 metres @ 13.55 g/t Au and 9 g/t Ag (13.7 g/t AuEq)
- LPDH065D 5.00 metres @ 1.59 g/t Au and 64 g/t Ag (2.7 g/t AuEq)
- LPDH067D 1.00 metre @ 15.50 g/t Au and 85 g/t Ag (16.9 g/t AuEq) and
8.00 metres @ 2.18 g/t Au and 27 g/t Ag (2.6 g/t AuEq)
- LPDH069 4.57 metres @ 3.53 g/t Au and 117 g/t Ag (5.5 g/t AuEq)
- LPDH070 6.10 metres @ 3.06 g/t Au and 76 g/t Ag (4.3 g/t AuEq)
- LPDH071 16.76 metres @ 3.62 g/t Au and 152 g/t Ag (6.2 g/t AuEq)
- LPDH072 10.67 metres @ 2.23 g/t Au and 122 g/t Ag (4.3 g/t AuEq)
- LPDH073D 8.50 metres @ 2.29 g/t Au and 81 g/t Ag (3.6 g/t AuEq)
- LPDH074 7.62 metres @ 0.70 g/t Au and 84 g/t Ag (2.1 g/t AuEq) and
27.43 metres @ 2.85 g/t Au and 66 g/t Ag (3.9 g/t AuEq)
- LPDH075 13.72 metres @ 3.29 g/t Au and 7 g/t Ag (3.4 g/t AuEq)
- LPDH077 13.71 metres @ 3.14 g/t Au and 87 g/t Ag (4.6 g/t AuEq)
- LPDH078 35.06 metres @ 1.98 g/t Au and 25 g/t Ag (2.4 g/t AuEq) and
10.67 metres @ 4.86 g/t Au and 48 g/t Ag (5.7 g/t AuEq)
- LPDH081 6.10 metres @ 1.30 g/t Au and 20 g/t Ag (1.6 g/t AuEq)
- LPDH085 4.57 metres @ 3.26 g/t Au and 93 g/t Ag (4.8 g/t AuEq)
- LPDH086 9.15 metres @ 3.24 g/t Au and 42 g/t Ag (3.9 g/t AuEq)
- LPDH087 4.57 metres @ 4.72 g/t Au and 40 g/t Ag (5.4 g/t AuEq)
- LPDH090 9.14 metres @ 1.97 g/t Au and 5 g/t Ag (2.1 g/t AuEq)


Results are awaited for drill holes LPDH083D, LPDH88D, LPDH089, LPDH091D and LPDH093 to LPDH097.

The long section below of the La Patria-La Virginia-Maclovia trend (prepared on the basis of drill data at 16 March 2007), shows the distribution of the holes reported above and emphasises the emerging and open nature of the clavos defined by the drilling. In this long section the clavo boundaries are defined by 20 gram AuEq metre accumulation contours (using a gold to silver price ratio of 1:60). The dashed line represents the lower limit of the January 2007 resource model.

A map is available on the CCNMatthews website at the following address: http://www.ccnmatthews.com/docs/Palmarejo_map3.jpg

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 (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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