WINNEMUCCA, NEVADA, Feb 16, 2012 (MARKETWIRE via COMTEX) — Paramount Gold and Silver Corp.(frankfurt:P6G)(wkn:A0HGKQ) (“Paramount”) today reported high-grade assay results from two new core drill holes located to begin exploring an undrilled 1.3 km gap in the Veronica-Santa Clara mega structure at its 100%-owned San Miguel Project in Mexico. Drilling continues at the San Miguel Project with three rigs.

Drill holes LU-12-026 and LU-12-027 discovered a new “Clavo” or high-grade gold zone on the southern edge of the La Union deposit and into the untested gap towards the Santa Clara deposit. Furthermore, the 8.65 meter intercept in hole 27, grading 13.02 g/T gold plus 19.27 g/T silver, sits within a much wider mineralized zone of massive veins and stockworks totaling 79 meters in width and averaging 3.70 g/T of gold and 17.34 g/T of silver. This mineralized zone is estimated to have a true width of no less than 60 meters (see cross section at the following address: http://paramountgold.com/_gui/SECC_LU-12-027.jpg ).

Additionally, drill hole LU-12-025, located in the central part of La Union, intersected 7.75 meters grading 29.51 g/T of gold plus 19.11 g/T of silver. This hole is expected to increase the size of the high-grade core of the La Union deposit. Included in this intersection is 1.35 meters grading 156.83 g/T of gold plus 77.82 g/T of silver, confirming the exceptional grades associated with the core zone of La Union which may prove to be the highest grade deposit in the Palmarejo District.

Commenting on the results, Christopher Crupi, Paramount’s CEO, noted “these are some of the best drill results encountered in the entire district. The new Clavo discovery could prove to be a game-changer for the San Miguel Project for three reasons. First, we have taken another major step towards proving that the seven km long Veronica-Santa Clara corridor is a continuously-mineralized structure connecting the known deposits within it. The 2.8 km of undrilled gaps within this corridor become more exciting with each hole we drill. Second, the greater widths evident in hole 27 could support open pit mining which would have major economic benefits. Finally, we are discovering gold-rich zones at depth below previously-identified silver mineralization as we had hoped. Each of these developments could greatly enhance the value of the San Miguel Project.” (See the longitudinal section below to view the potential for more gold at depth and the untested 1.3 km gap towards Santa Clara at the following address: http://www.paramountgold.com/_gui/ludls.jpg ).

Assay results from the three new holes are as follows:

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Total From To Width Au Ag

Hole # Area Length (m) (m) (m) (m) g/T g/T

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LU-12-025 LA UNION 304.95 145.25 153 7.75 29.51 19.11
 including 146.85 148.2 1.35 156.83 77.82

197.7 215.55 17.85 0.62 2.09

239.8 242.6 2.8 0.35 10.69

249.4 251.35 1.95 1.58 20.9

301.6 302.4 0.8 4.18 2.8

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LU-12-026 LA UNION 268.05 45.9 49.2 3.3 0.06 55.4
 75.05 75.9 0.85 0.11 337

89.35 94.1 4.75 0.12 14.5

121.3 123.9 2.6 1.0 318

135.35 142.05 6.7 0.86 4.45

146.65 147.7 1.65 6.2 29.2

153.55 156.55 3.0 12.79 15.35

166.7 167.8 1.1 1.49 1.3

172.2 174.35 2.15 5.94 3.77

227.5 230.7 3.2 0.47 1.52

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LU-12-027 LA UNION 252.9 103.4 182.75 79.35 3.70 17.34
 including 103.4 105.85 2.45 3.39 175.66

including 118.35 123.8 5.45 21.82 33.35

including 161.25 169.9 8.65 13.02 19.27

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These holes were drilled at what were believed to be right angles to the target structures in order to generate true width intercepts but further drilling will be required into the new Clavo discovery to ensure accuracy.

A new resource estimate by Mine Development Associates (MDA, www.mda.com ) of Reno, Nevada is expected during the second quarter of 2012 for the entire San Miguel Project which will include 2011 and early 2012 drill results. This new estimate will be incorporated into a Preliminary Economic Assessment planned for later this year which will evaluate mining scenarios, mining rates and process alternatives and define a path to a Preliminary Feasibility Study which would report reserves. In addition, Paramount is continuing to explore the potential of its large property position and is prioritizing numerous untested targets as well as extensions of known deposits, many of which remain open.

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 Qualified Person as defined by National Instrument 43-101, who have both reviewed and approved this press release. 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). 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 150,000 hectares 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 Nevada’s largest new undeveloped gold resources.(See global resource table below)

SUMMARY OF ALL PZG NI 43-101 COMPLIANT RESOURCE ESTIMATES

 MEASURED AND INDICATED RESOURCES

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Area Tonnes Au g/t Au Ounces Ag g/t Ag Ounces

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San Miguel 8,005,000 0.38 98,800 62.0 15,759,000

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Sleeper 172,763,453 0.47 2,625,399 4.56 25,337,575

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Total 2,724,199 41,096,575

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 INFERRED RESOURCES

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Area Tonnes Au g/t Au Ounces Ag g/t Ag Ounces

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San Miguel 45,890,000 0.60 877,700 38.0 56,848,000

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Sleeper 81,754,167 0.43 1,120,410 3.12 8,202,962

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Total 1,998,110 65,050,962

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For a detailed report on these resource estimates, their QPs and methodologies please see the following news releases: April 11, 2011 San Miguel; September 13 2011, Sleeper; December 28 2011, San Miguel.

Cautionary Note to U.S. Investors Concerning Estimates of Measured &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 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.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

Christopher Crupi, CEO

613-226-9881

[email protected]
www.paramountgold.