Paramount Gold Discovers High Grade Strike Extension of Main Palmarejo Mine Vein at San Miguel

CHIHUAHUA, MEXICO--(Marketwire - Dec. 9, 2010) - New drilling on the Don Esevein target on Paramount Gold and Silver Corp (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G) San Miguel Project has discovered the south southeast strike extension of the main Palmarejo structural corridor that hosts Coeur d`Alene Mines (NYSE:CDE)Palmarejo Mine. The structural corridor is partly obscured by younger volcanic rocks, but new drilling has intersected the target below this cover.

The nearly vertical structural zone that is host to the Don Esevein strikes north northwest towards the Palmarejo Mine. True width of the Don Ese vein is typically in the range of10meters, but locally is up to 19 meters wide. To date, the mineralized vein has been traced by core drilling for a strike length of 550meters; the feature remains open down dip and along strike for at least another200 meters. Don Ese is a massive quartz vein with textures characteristic of low sulfidation epithermal deposits, consistent with other vein deposits in the district. The vein cuts and off-sets both andesite and felsic volcanic units and has several localized dacite intrusions. Follow-up drilling will continue in the new year to develop resources on this discovery.

Paramount CEO,Christopher Crupi said,"this is the most significant discovery we have made to date atour San Miguel Project. In the beginning, our huge land position had too many targets and different target types which needed to be assessed and prioritized. Systematic exploration over the past two years has enhanced our understanding of the district and we are now reaping the benefits with each drill program; we have become more focused and effective. Finding this blind target increases our confidence in making additional discoveries."

Assay results from Don Ese include:

For more information on Don Esedrill hole locations see link below:
http://paramountgold.com/_docs/SanMiguel_TargetsGreater.jpg and http://www.paramountgold.com/_docs/DONESE_map.pdf

Although these initial results are believed to approximate true width, additional drilling will be required to fully establish true widths in all intervals. Vertical zonation of silver and gold is common in this target style and these results are therefore being pursued at depth in the current program to determine if higher gold concentrations are present.

Paramount owns a 100% interest in the 188,000 hectare (465,000 acre) San Miguel Project in the Palmarejo District of northwest Mexico, making it the largest claim holder in this rapidly growing precious metals mining camp. Two programs are ongoing at San Miguel. Exploration continues to develop new targets for drill testing. Four more new targets are expected to be drilled in the first quarter of 2011. Resource delineation drilling meanwhile has focused on the San Francisco, Veronica, Monte Cristo, and San Miguel Vein targets. Results from the resource delineation drilling will be incorporated into a new National Instrument 43-101 compliant resource estimate expected in the first quarter of 2011.

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 being assayed at ALS Chemex, Vancouver, B.C., using fire assay atomic adsorption 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.

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Paramount Gold up 8%, discovers strike extension of main Palmarejo Mine vein at San Miguel in Mexico

Mining company Paramount Gold and Silver Corp (NYSE AMEX:PZG, TSX:PZG, FSX:P6G) announced today that drilling on the Don Ese vein at its San Miguel Project in Mexico uncovered a strike extension of the main structural corridor that hosts Coeur d’Alene Mines' (NYSE:CDE) Palmarejo Mine.

"This is the most significant discovery we have made to date at our San Miguel Project. In the beginning, our huge land position had too many targets and different target types which needed to be assessed and prioritized," said CEO Christopher Crupi.

"Systematic exploration over the past two years has enhanced our understanding of the district and we are now reaping the benefits with each drill program...Finding this blind target increases our confidence in making additional discoveries."

The structural corridor is partly hidden by younger volcanic rocks, but new drilling has intersected the target below this cover, the company said.

According to Paramount, the structural zone that hosts the Don Ese vein strikes north northwest towards the Palmarejo Mine. To date, the mineralized vein has been traced by core drilling for a strike length of 550 metres. It remains open down dip and along strike for at least another 200 metres.

Assay results from Don Ese include an intersection of 16m at 2.11 g/t gold and 90.4 g/t silver at hole DS-10-001; 3.4m at 0.11 g/t gold and 56.6 g/t silver at hole DS-10-003; 13.4m at 6.53 g/t gold and 590.4 g/t silver at hole DS-10-004; 27m at 3.11 g/t gold and 169.4 g/t silver at hole DS-10-005; and 5.10m at 0.73 g/t gold and 66.1 g/t silver at hole DS-10-006.

Paramount said follow-up drilling will continue in 2011 to develop resources on the discovery.

The company's share price has rallied almost 8% to trade at $1.85 on the NYSE AMEX as of 11:14 am EST.

A New Discovery of Paramount Importance

By Christopher Barker | More Articles
December 9, 2010 | Comments (1)