Paramount Gold and Silver Corp.
NYSE Amex : PZG
FRANKFURT : P6G
TSX : PZG

Paramount Gold and Silver Corp.

October 06, 2011 08:00 ET

Paramount Gold Reports Good Recoveries From Preliminary Met Tests of Nevada Sleeper Project Waste Dumps

WINNEMUCCA, NEVADA--(Marketwire - Oct. 6, 2011) - Paramount Gold and Silver Corp. (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") announced today that preliminary results from ongoing metallurgical test work on its 49.6 square mile, 100%-owned Sleeper Gold Project in Nevada confirm the potential for economic gold recoveries from the Sleeper waste dumps.

A sonic drilling program of historical waste dumps earlier this year generated higher than expected gold grades (see news release of August 15, 2011). Paramount therefore initiated metallurgical testing to evaluate the possibility of extracting this contained gold from the dump rock. Test results have been received for six holes which include the samples from the South and West dumps. The initial tests were conducted at McClelland Laboratories of Reno, Nevada using a relatively coarse sample sizing (80% less than 3/4") in bottle roll tests intended to emulate heap leach extraction. Gold recoveries were very encouraging, ranging from 49% to 89%, with an average of 70% for a 96 hour test period. Relatively low lime and cyanide consumption were observed, particularly from samples that reported the highest gold recoveries. Results are pending from the three holes drilled into the North waste dump.

Sonic Drill Holes Area Au Calculated Grade (g/T) 96 Hr Au Recovery% NACN Cons. kg/T Lime Added kg/T
WDS-11-1 south dump 0.19 73.4 0.79 9.6
WDS-11-2 south dump 0.28 55.4 1.42 13
WDS-11-3 south dump 0.24 49.0 0.91 7.4
WDW-11-4 west Dump 0.18 66.5 0.23 2.9
WDW-11-5 west Dump 0.27 89.7 0.08 3.3
WDW-11-6 west Dump 0.26 85.4 0.08 3.4
WDN-11-7 north dump pending
WDN-11-8 north dump pending
WDN-11-9 north dump pending

The waste dump metallurgical program will now proceed with column leach testing which will provide the added confidence required to include these materials in a heap leach recovery process. Paramount is also designing a reverse circulation drilling campaign to augment the sonic drilling results from the waste dumps. This will provide the data for a resource estimate of the waste dumps and define areas with better gold grades.

According to operation reports prepared by Amax Gold, the Sleeper mine`s original operator, a total of 66 million tonnes of waste was extracted during mining operations of which an estimated 54 million tonnes were placed on the three dumps.

Christopher Crupi, CEO commented that "with the gold recoveries we see in these tests and the volume of material available to us, we believe the Sleeper waste dumps could add significantly to the value of the overall project. The key facts are that these recoveries did not require a fine grind of the material or high concentrations of reagents, suggesting that reasonable recoveries may be achievable at a low cost."

Paramount recently updated its in situ Sleeper Gold Project resource estimate, reporting a measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver and an inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver. (See press release of September 13, 2011). Work continues on these resources in preparation for their inclusion in a Preliminary Economic Assessment (PEA) scheduled for completion in early 2012 by Tetra Tech (www.TetraTech.com), a leading international mining consulting firm. The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca, Nevada. Acquired by Paramount in 2010, the 49.6 square mile project area includes the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as newly purchased claims stretching south down trend to Newmont`s Sandman project.

The current work program at Sleeper is consistent with Paramount's strategy of expanding and upgrading known, large-scale precious metal occurrences in established mining camps, defining their economic potential and then partnering them with nearby producers. As a former high-grade gold producer, Sleeper is ideally located near established, low cost production in Nevada, where the infrastructure already exists for early, cost-effective exploitation.

Exploration activities at Sleeper are being conducted by Paramount Gold under the supervision of Glen van Treek, Exploration Vice President of the Company and Bill Threlkeld, a Qualified Person as defined by National Instrument 43-101, who have both reviewed and approved this press release. An ongoing quality control/quality assurance protocol is being employed during the program including blank, duplicate and reference standards in every batch of assays. Samples are being assayed at ALS Chemex, Reno Nevada using fire assay atomic absorption methods for gold, and aqua regia digestion ICP methods at ALS Chemex Vancouver Canada for other elements.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources

This news release uses the terms "measured and indicated resources" and "inferred resources". We advise U.S. investors that while these terms are defined in, and permitted by, Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and not normally permitted to be used in reports and registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves", as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of the mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable.

Safe Harbor for Forward-Looking Statements

This release and related documents may include "forward-looking statements" including, but not limited to, statements related to the interpretation of drilling results and potential mineralization, future exploration work at the Sleeper Gold Project and the Dunes Project and the expected results of this work. Forward-looking statements are statements that are not historical fact and are subject to a variety of risks and uncertainties which could cause actual events to differ materially from those reflected in the forward-looking statements including fluctuations in the price of gold, inability to complete drill programs on time and on budget, and future financing ability. Paramount's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Words such as "believes" "plans" "anticipates" "expects" "estimates" and similar expressions should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to: uncertainties involving interpretation of drilling results, environmental matters, lack of ability to obtain required permitting, equipment breakdown or disruptions, and the other factors described in Paramount's Annual Report on Form 10-K for the year ended June 30, 2011 and its most recent quarterly reports filed with the SEC. Except as required by applicable law, Paramount disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

Contact Information

  • Paramount Gold and Silver Corp.
    Glen Van Treek, VP Exploration
    Chris Theodossiou, Investor Relations
    866-481-2233