Mr. Christopher Crupi reports

PARAMOUNT GOLD AND SILVER DISCOVERS NEW HIGH GRADE STRUCTURE ON SAN MIGUEL PROJECT IN MEXICO

Paramount Gold and Silver Corp., on the first drill hole of the exploration program recently initiated on its 100-per-cent-owned San Miguel project in northern Mexico, has discovered a new high-grade precious metals structure called Dana. The new discovery runs about 500 metres west of the Don Ese structure and parallel to it, and has a strike length potential on Paramount ground of about one kilometre. Don Ese is the highest-grade and most valuable gold/silver deposit at San Miguel.

The first hole drilled into Dana returned multiple intercepts of high-grade silver with gold, including 3.6 m of 157.1 grams per tonne silver and 0.40 g/t gold, with some assays up to 659 g/t silver (21 ounces per ton) and 1.18 g/t gold.

Commenting on the discovery, Paramount chief executive officer Christopher Crupi said that the Dana discovery looks exactly like Don Ese in its early stages of exploration: "Like Don Ese, Dana is relatively narrow at the surface but it quickly opens up at depth. Our first hole at Dana intersected an impressive 28 m of hydrothermal breccia, quartz stockwork and quartz veins containing precious metal mineralization. This hole is still high in the system and it's therefore silver rich, similar to Don Ese at the same elevation. We expect Dana to generate considerably higher gold values as we get deeper into the system, just as we found at Don Ese."

The location of Dana favours early development from underground in parallel with Don Ese. "We have made Dana a top priority for resource expansion by immediately moving a second core rig onto this target," Mr. Crupi noted. "Dana is close to our claim boundary and it's just 800 m northeast of Coeur Mining's Guadalupe underground mine currently under development at its flagship Palmarejo project. Fortunately, Dana dips to the east, further onto our claims."

The Dana discovery hole returned the intercepts shown in the table.

                 SAN MIGUEL DRILL RESULTS

Hole             From      To     Width     Au      Ag
                   (m)     (m)       (m)  (g/t)   (g/t)

DN-14-001      328.50  334.20      5.70  0.043   91.14
               346.10  349.70      3.60  0.400  157.10
               351.00  355.90      4.90  0.384   86.76

This hole was drilled to intersect the structure at right angles. Additional drilling is required to confirm true width of the structure but it is expected that it will not be less than 85 per cent of the reported intercept.

The current drill program at San Miguel has three objectives (see news release of Sept. 2, 2014):

1. Test new, recently identified targets like Dana;
2. Convert inferred resources within the proposed underground mine plan to measured and indicated. About 18 per cent of the underground minable material in the company's preliminary economic assessment is inferred. The aim is to have 100 per cent of the resource as measured and indicated so that it will qualify as reserves in a preliminary feasibility study;
3. Acquire material for metallurgical testing and geotechnical studies.

Paramount is continuing its drill program with four core rigs.

We seek Safe Harbor.