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Multi Million Ounce Gold Resource Defined at Paramount Gold's Sleeper Project in Nevada

2011-09-13 11:23 ET - News Release

WINNEMUCCA, NEVADA -- (MARKET WIRE) -- 09/13/11

Paramount Gold and Silver Corp. (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") announced today the results of a new NI-43-101 compliant resource estimate on its 100% owned Sleeper Gold Project prepared by SRK Consulting (www.srk.com), a well-recognized 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 45 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 (Paramount press release Aug. 23, 2011) stretching south down trend to Newmont`s Sandman project.

The SRK resource estimate includes oxide and sulfide materials as well as a small amount of in-place mineralization described as alluvial. SRK estimates an in situ measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver and an additional inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver using a cut-off grade of 0.20 grams of gold per tonne (g/T) for oxide and alluvial material and 0.25 grams per tonne (g/T) for sulfide material. These cut-off grades were determined using a gold price of $1,100/oz. and recoveries of 85% for sulfides and 70% for oxides.

The following table summarizes SRK's resource estimate:


                           Sleeper Resources Table                          
----------------------------------------------------------------------------
                                              MEASURED                      
                        ----------------------------------------------------
Material         Cut-off                                                    
                  Au g/T      Tonnes  Au g/T  Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
Oxide               0.20  31,960,502    0.39    4.23     397,669   4,346,620
Sulfide             0.25  91,074,631    0.54    5.06   1,569,495  14,816,501
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          Total          123,035,133    0.50    4.84   1,967,164  19,163,121
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                                              INDICATED                     
                        ----------------------------------------------------
Material      Cut-off Au                                                    
                    g/T       Tonnes  Au g/T  Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
Oxide               0.20  10,829,438    0.33    4.12     114,203   1,434,501
Sulfide             0.25  38,898,882    0.44    3.79     544,032   4,739,953
----------------------------------------------------------------------------
          Total           49,728,320    0.41    3.86     658,235   6,174,454
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                                       MEASURED AND INDICATED               
                        ----------------------------------------------------
Material      Cut-off Au                                                    
                    g/T       Tonnes  Au g/T  Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
Oxide               0.20  42,789,940    0.37    4.20     511,872   5,781,121
Sulfide             0.25 129,973,513    0.51    4.68   2,113,527  19,556,454
----------------------------------------------------------------------------
          Total          172,763,453    0.47    4.56   2,625,399  25,337,575
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                                              INFERRED                      
                        ----------------------------------------------------
Material      Cut-off Au                                                    
                    g/T       Tonnes  Au g/T  Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
Alluvial            0.20     151,675    2.03       -       9,890           -
Oxide               0.20  13,191,635    0.32    3.42     136,145   1,450,516
Sulfide             0.25  68,410,857    0.44    3.07     974,376   6,752,446
----------------------------------------------------------------------------
          Total           81,754,167    0.43    3.12   1,120,410   8,202,962
----------------------------------------------------------------------------

The resources are located in the West Wood, Facilities, Wood, Office and Sleeper zones encompassing a mineralized area over 2.0 kilometers long by 1.3 kilometers wide. The resource calculation does not incorporate potential above ground inventory including mill tailings, waste dumps and leached ore which are the subject of ongoing analysis. Also excluded are the results from drilling conducted after February, 2011. An updated resource estimate for Sleeper is scheduled for next year to incorporate data on the surface inventory and more recent drilling results.

Tetra Tech (www.TetraTech.com), a leading international mining consulting firm, has been engaged to prepare an NI 43-101 compliant Preliminary Economic Assessment (PEA) of the Sleeper gold project for completion in early 2012. 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.

The Sleeper database used for SRK's resource estimate includes more than 4,000 reverse circulation and core drill holes, as well as historical surface mapping and interpretations, to create a comprehensive lithological and structural model over the entire deposit. Additionally, data from more than 378,000 blast holes, collected while the project was in operation, were utilized to define trends, orientations and inclinations for the principal mineral zones. SRK employed Vulcan Software to vary the block sizes to as small as 2.5 by 2.5 by 2.5 meters to better control the limits of high grade zones and avoid over-estimation. Multiple search distances and orientation parameters were used for various grades and previously defined zones. Higher grade zones were estimated using ordinary kriging (OK) with maximum search distances of 10 meters with an average of 7 meters. Medium and low grade zones were also estimated with Ordinary Kriging using average maximum search distances of 48 meters for all domains, with the result that most of the resource falls within the measured and indicated category. Longer search distances were used for inferred material.

Christopher Crupi, CEO of Paramount Gold commented, "Sleeper is emerging as one of Nevada's largest undeveloped gold resources. Its location, size and style of mineralization suggest that Sleeper could sustain a low-cost mining operation. Our next step is to complete a PEA within the first quarter of 2012 to establish the economic parameters for a mining operation. If the PEA is successful, we will move immediately toward a Preliminary Feasibility Study which will enable us to report reserves. At the same time as we push ahead with the existing resource, we will focus on a series of promising new exploration targets which have emerged from the data".

The SRK resource estimate at varying cutoff grades is as follows:

Measured Oxide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Measured                           
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.1               51,140,096         0.3        3.69     493,265   6,067,162
0.2               31,960,502       0.387        4.23     397,669   4,346,620
0.25              23,364,479       0.447         4.5     335,785   3,380,386
0.3               16,930,538       0.513        4.82     279,245   2,623,708
0.4                9,427,511       0.648        5.22     196,413   1,582,214
----------------------------------------------------------------------------

Indicated Oxide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Indicated                          
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.1               21,251,557       0.242        3.69     165,350   2,521,244
0.2               10,829,438       0.328        4.12     114,203   1,434,501
0.25               6,704,861       0.393         4.4      84,719     948,506
0.3                4,274,272       0.461        4.59      63,352     630,772
0.4                1,884,221        0.61        4.89      36,954     296,236
----------------------------------------------------------------------------

Measured and Indicated Oxide Material


----------------------------------------------------------------------------
Cut-off Au g/T                              M&I                             
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.1               72,391,653        0.28        3.69     658,615   8,588,406
0.2               42,789,940        0.37        4.20     511,872   5,781,121
0.25              30,069,340        0.43        4.48     420,504   4,328,893
0.3               21,204,810        0.50        4.77     342,597   3,254,480
0.4               11,311,732        0.64        5.17     233,367   1,878,451
----------------------------------------------------------------------------

Measured Sulfide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Measured                           
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.2              115,476,605        0.47        4.77   1,744,977  17,709,655
0.25              91,074,631       0.536        5.06   1,569,495  14,816,501
0.3               71,695,288       0.606        5.34   1,396,886  12,309,193
0.4               45,695,936       0.755         5.7   1,109,232   8,374,332
0.5               30,760,064       0.905        5.97     895,022   5,904,176
0.6               21,703,611       1.055        6.22     736,177   4,340,304
----------------------------------------------------------------------------

Indicated Sulfide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Indicated                          
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.2               53,645,467       0.377        3.65     650,238   6,295,404
0.25              38,898,882       0.435        3.79     544,032   4,739,953
0.3               27,505,079       0.502        3.84     443,930   3,395,798
0.4               15,044,512       0.633        3.72     306,182   1,799,363
0.5                8,907,105       0.762        3.47     218,217     993,719
0.6                5,473,666       0.898         3.4     158,035     598,349
----------------------------------------------------------------------------

Measured and Indicated Sulfide Material


----------------------------------------------------------------------------
Cut-off Au g/T                              M&I                             
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.2              169,122,072        0.44        4.41   2,395,214  24,005,059
0.25             129,973,513        0.51        4.68   2,113,527  19,556,454
0.3               99,200,367        0.58        4.92   1,840,816  15,704,991
0.4               60,740,448        0.72        5.21   1,415,414  10,173,694
0.5               39,667,169        0.87        5.41   1,113,239   6,897,895
0.6               27,177,277        1.02        5.65     894,212   4,938,653
----------------------------------------------------------------------------

Inferred Oxide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Inferred                           
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.1               29,635,200       0.225        3.18     214,382   3,029,931
0.2               13,191,635       0.321        3.42     136,145   1,450,516
0.25               8,053,980       0.384        3.71      99,435     960,688
0.3                4,724,427       0.466        4.06      70,784     616,699
0.4                2,049,919       0.631        3.41      41,588     224,744
----------------------------------------------------------------------------

Inferred Sulfide Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Inferred                           
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.2               94,874,313       0.382        3.05   1,165,225   9,303,497
0.25              68,410,857       0.443        3.07     974,376   6,752,446
0.3               49,260,219       0.509         3.1     806,143   4,909,709
0.4               26,265,629       0.652        2.81     550,596   2,372,968
0.5               15,105,865       0.806        2.75     391,452   1,335,599
0.6                9,467,172       0.962        2.79     292,815     849,224
----------------------------------------------------------------------------

Inferred Alluvial Material


----------------------------------------------------------------------------
Cut-off Au g/T                           Inferred                           
              --------------------------------------------------------------
                      Tonnes      Au g/T      Ag g/T       Au Oz       Ag Oz
----------------------------------------------------------------------------
0.1                  156,140       1.975                   9,915            
0.2                  151,675        2.03                   9,890            
0.25                 150,281       2.045                   9,881            
0.3                  148,215        2.07                   9,864            
0.4                  134,889        2.24                   9,715            
----------------------------------------------------------------------------

Exploration activities at Sleeper were 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 reviewed and approved this press release. This release was also reviewed and approved by SRK's George Even, a Qualified Person responsible for the resource estimation. An ongoing quality control/quality assurance protocol was employed during the program including blank, duplicate and reference standards in every batch of assays. Samples were 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 are normally not 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 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 production and future exploration work at the Sleeper Gold 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 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.

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

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