Paramount Gold and Silver Corp.
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Paramount Gold and Silver Corp.

February 01, 2011 09:02 ET

Paramount Gold Resumes Drilling on Don Ese Corridor to Find Southern Extension

CHIHUAHUA, MEXICO--(Marketwire - Feb. 1, 2011) - Paramount Gold (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ)

Drilling has recommenced on the Don Ese Corridor which hosts the high-grade Don Ese gold-silver vein discovered by Paramount in December, 2010 on its 100% owned San Miguel Project in northwestern Mexico. This phase of the drill program will include 19 core drill holes totaling 6,000 meters over a 3 month timeframe.

Paramount`s initial drill testing of the Don Ese area discovered the north-northwest trending Don Ese vein within a strike extension of the main structural corridor (named the Don Ese Corridor) which hosts the neighboring Palmarejo Mine (see news release of December 9, 2010). The Don Ese vein is not exposed at the surface but was initially located by surface features including fractured and broken rocks indicative of a fault zone, anomalous silver and gold geochemistry and distinctive clay mineralogy. Surface exploration for these markers was conducted along strike to the south of the Don Ese discovery, successfully identifying the favorable geology, geochemistry and clay mineralogy as well as vein exposures within the Don Ese Corridor which has to date been traced for 7,500 meters along strike, with a width of 2,500 meters, on Paramount`s San Miguel concessions (see news release of December 21, 2010).

Work in the Don Ese Corridor to date has identified a continuation of the Don Ese vein (Don Ese Sur) as well as three other parallel north-northwest trending veins (El Cura, La Verde and Temoris) where drill testing is indicated from surface work. A 7,500 meter core drilling program has been designed to test these targets starting immediately. The surface expressions of these veins identified to date range from 800 meters to 1500 meters but they remain open along strike.

Final results were received for drill hole DS-10-07 which confirmed the continuity of the north-northwest trending structure but contained no significant gold or silver intersections. High-grade vein deposits typically do not return significant values in every hole. The complete record of the seven holes on the Don Ese vein are as follows:

Drill Hole Number Drill Hole Length (meters) From (meters) To (meters) Interval Length (meters) Au g/t Ag g/t
DS-10-001 536.80 481.4 497.4 16.0 2.11 90.4
  Includes 483.5 491.1 7.6 4.25 133.4
             
DS-10-002 667.75 No significant intervals: structural feature was identified but unmineralized
             
DS-10-003 576.20 211.4 214.8 3.4 0.11 56.6
    519.2 535.5 16.3 1.60 62.0
  Includes 522.0 529.7 7.7 3.06 90.1
             
DS-10-004 411.55 303.1 316.5 13.4 6.53 590.4
    337.3 343.6 6.3 1.31 179.9
             
DS-10-005 429.85 394.5 421.5 27.0 3.11 169.4
  Includes 397.8 399.1 1.3 28.80 175.0
DS-10-006 512.25 420.05 425.15 5.10 0.73 66.1
    427.25 436.90 9.65 5.35 387.4
  includes 429.05 430.50 1.45 13.60 864.0
  Includes 434.40 435.40 1.00 14.75 1120.0
DS-10-007 539.65 No significant intervals: structural feature was identified but unmineralized.

Although these initial results are believed to approximate true width, additional drilling will be required to fully establish true widths in all intervals.

The San Miguel project consists of 188,000 hectares (465,000 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel under the supervision of Bill Threlkeld a Qualified Person as defined by National Instrument 43-101. An ongoing and rigorous quality control/quality assurance protocol is being employed during the program including blank, duplicate and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are assayed at ALS Chemex, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

Paramount Gold is a U.S. domiciled exploration and development company with multi-million ounce advanced stage projects in Nevada [Sleeper] and northern Mexico [San Miguel]. Fully funded programs are now in progress at our two main projects to substantially expand resources over the next two years. Plans are also underway to exploit a large, surface inventory of gold in tailings and leach pad heaps on our Sleeper property for potential near-term cash flow. For more information visit the Company's website at www.paramountgold.com.

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 San Miguel 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, 2010 and its most recent quarterly reports filed with the SEC available on www.sec.gov and applicable Canadian securities regulators available on www.sedar.com. 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.
    Christopher Crupi, CEO,
    Chris Theodossiou, Investor Relations
    866-481-2233 / 613-226-9881