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Home > News > News Release

News Release

PARAMOUNT GOLD AND SILVER FILES FINAL RESOURCE ESTIMATE REPORT ON SEDAR FOR SAN MIGUEL PROJECT


Report confirms substantial growth in contained metal; Indicated gold resource increases 547%; Indicated silver resource rises 240%


Winnemucca, Nevada -October 10, 2012 -Paramount Gold and Silver Corp. (NYSE/TSX: PZG) (Frankfurt: WKN: A0HGKQ) ("Paramount") announced today that the final NI-43-101-compliant updated resource report for its 100%-owned San Miguel Project in northern Mexico has been filed on www.SEDAR.com. The report can also be downloaded from Paramount`s web site. The results of the updated estimate were released on September 5, 2012 (see news release).

The resource estimate was prepared by Mine Development Associates (MDA, www.mda.com) of Reno, Nevada and includes data from 139 new core drill holes totaling 37,925 meters completed during 2011 and the first half of 2012.† Previous resource estimates used in this news release for comparison purposes were also prepared by MDA. This resource estimate is being incorporated into a Preliminary Economic Assessment led by Scott E. Wilson Consulting Inc. which is scheduled for completion at the end of this year.

The new estimate reports 639,000 ounces of gold in the indicated category and another 830,000 ounces of gold classified as inferred. For silver, indicated resources are now estimated at 53.6 million ounces plus an additional 46.2 million ounces of inferred. Based on the long term gold-to-silver price ratio used by MDA of 1-to-60, the San Miguel estimated resource now equates to 1.53 million indicated gold equivalent (AuEq) ounces and 1.60 million inferred gold equivalent ounces (see table below for details).

Recognizing that portions of the resources are silver-dominant and use a silver cut-off grade, it is also useful to assess the estimated resource on a silver-equivalent basis. At the same 1-to-60 ratio, the San Miguel estimated resource now stands at 91.90 million indicated silver equivalent ounces and 96.04 million inferred silver equivalent ounces.

Note: Rounding may cause apparent discrepancies; AgEq grade = Ag grade + Au grade * 60; AuEq grade = Au grade + Ag grade/60; La Veronica and Monte Cristo-Sangre de Cristo not updated from previously reported resources.

Paramount continues to explore San Miguel, following up its recent discovery at La Bavisa as well as promising targets at Don Ese Sur, El Ojito, Barranca Blanca and other new priority targets. La Bavisa, Don Ese Sur, El Ojito and Barranca Blanca targets are all within the Don Ese Zone (see map).

Estimated resources at a higher cut-off
Paramount is sensitive to the fact that some potential partners in the San Miguel Project may not have confidence in high precious metal prices or may want to focus on high-grade scenarios for other reasons. In this regard, Paramount is very pleased to report that, at substantially higher cut-off grades, the project contains a significant resource with high gold and silver grades.

For example, at a 1.5 AuEq g/T cut-off grade (or† 90 g/T AgEq) for all deposits, indicated gold and silver grades increase 123% and 95% respectively to 1.86 Au g/T and 137 Ag g/T, but indicated contained metal is only reduced by 19% for gold and 29% for silver. Likewise, on a gold equivalent basis with a cut off of 1.5 AuEq g/T (or 90 AgEq g/T), the average grade of indicated resources increases 107 % to 4.13 AuEq g/T and indicated contained gold equivalent ounces drop by only 25% to 1.155 million gold equivalent ounces.

Similar performance is seen for the inferred resource where, at the 90 g/T AgEq cut-off grade (or 1.5 AuEq g/T), the average gold grade increases 183% to 1.95 Au g/T while the silver grade rises 174% to 104 Ag g/T. On a gold equivalent basis with the same higher cut-off, the average grade rises 179% to 3.68 AuEq g/T and contained gold equivalent ounces decrease by only 43% to 906,000 gold equivalent ounces. Estimated resources at the higher cut-off are as follows:

MDA resource estimates at a 90 g/T AgEq cut-off (or 1.5 g/T AuEq):

Note: Rounding may cause apparent discrepancies; AgEq grade = Ag grade + Au grade * 60; AuEq grade = Au grade + Ag grade/60; La Veronica and Monte Cristo-Sangre de Cristo not updated from previously reported resources.

NI 43-101 Disclosure
Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel under the supervision of Glen van Treek, Exploration Vice President of the Company and Bill Threlkeld, a QP as defined by National Instrument 43-101, who have both reviewed and approved this news release. Michael Gustin of MDA, a Qualified Person responsible for resource estimation, has also reviewed and approved the portions of this news release that relate to the San Miguel resource estimate. An ongoing quality control/quality assurance protocol is being employed for 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 absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount Gold
Paramount Gold is a U.S. based exploration and development company with multi-million ounce advanced stage precious metals projects in Nevada (Sleeper) and northern Mexico (San Miguel). Fully funded exploration programs are now in progress at these two core projects which are expected to generate substantial additional value for our shareholders. Engineering studies are scheduled for completion in 2012 to define a development path and economic valuation for each project.

The 100% owned San Miguel Project consists of 150,160 hectares (371,053 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. The current work program at San Miguel is part of 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. The San Miguel Project is ideally situated near established, low cost production where the infrastructure already exists for early, cost-effective exploitation. Paramount also owns 100% of the Sleeper Gold Project which is emerging as one of Nevadaís largest new undeveloped gold resources.

Summary of all PZG Resources Compliant Resource Estimates

MEASURED AND INDICATED RESOURCES
PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
San Miguel 23,918,000 0.83 639,000 70.0 53,559,000
Sleeper 326,963,000 0.33 3,479,000 3.86 40,606,000
Total 4,118,000 94,165,000
INFERRED RESOURCES
PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
San Miguel 37,470,000 0.69 830,000 38.00 46,243,000
Sleeper 223,624,000 0.27 1,972,000 2.84 20,450,000
Total 2,802,000 60,693,000

Mineral resources that are not mineral reserves do not have demonstrated economic viability.

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 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 MIMI claims and the expected results of this work; and the accuracy and reliability of projections contained in mineral resource estimates and Preliminary Economic Assessments. 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. Paramountís 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 Paramountís Annual Report on Form 10-K for the year ended June 30, 2012 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.

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