NEW YORK (TheStreet ) — Paramount Gold and Silver(PZG_) is still praying for a buyout even if gold prices continue their retreat.

This $419.3 million company just needs gold prices to stay above $400 an ounce for their projects to be viable, according to CEO Chris Crupi. Currently the company has one large property, San Miguel, in northern Mexico, and another re-start up mine, Sleeper, in Nevada.

Sleeper, at its prime between 1986-1996, produced 1.66 million ounces of gold and 2.3 million ounces of silver. But for now Crupi is putting his eggs in San Miguel’s basket. The company just completed strong results from its last 28 drill holes at its San Francisco target in the property.

Adam Graf, director of emerging miners for Dahlman Rose & Co., recently wrote in a research note that “the results continue to confirm favorable conditions for near-surface, bulk-minable gold and silver deposits.” Graf has a buy rating on the stock and a price target of $12.11.

“We view this type of mineralization as low capital intensive, and thus attractive for PZG to possibly exploit themselves (if they so choose),” Graf writes. The company is still trying to quantify how much gold is in the ground and what the grade is but once it has those figures, Paramount will start gussying up for a buyer.

The mergers and acquisition trend stays sexy the longer gold prices remain high, regardless of recent corrections. Kinross Gold(KGC_) and Goldcorp(GG_) spent a combined $10 billion on their major purchases in 2010, paying premiums of 21% and 35%, respectively. If a major gold company paid a 30% premium for Paramount using today’s market cap, they would pay less than $550 million.

Another option for Paramount is China, which has also been stepping up its relationship with North American gold miners. The country imported 200 tons of gold in the first 10 months of 2010, despite the fact that the country is one of the leading gold producers in the world.

China National Gold Group Corp., the country’s No. 1 gold producer, cut a deal with Coeur d’Alene(CDE_) to receive half of all the gold concentrates from its Kensington mine in Alaska.