Location

WINNEMUCCA,
NEVADA–(Marketwired – Feb. 25, 2014) – Paramount Gold and Silver Corp. (NYSE
MKT:PZG) (TSX:PZG) (FRANKFURT:P6G) (WKN:A0HGKQ) (“Paramount”) today
reported results from the final two core holes drilled at Don Ese-part of its
ongoing program to enhance the resource base at its 100%-owned San Miguel
Project in northern Mexico. Paramount has been drilling at San Miguel since
late last year with two core rigs. The focus now shifts to a potential new
discovery on the southern end of the 7.5 km long Guazapares Megastructure.

 

Two additional holes
were drilled into the Don Ese deposit to upgrade and expand resources. Infill
drill hole DS-044 intersected 18 meters of 4.46 g/T of gold and 424.88 g/T of
silver including a central portion of 3.4 meters grading 19.18 g/T of gold with
1,873.6 g/T of silver. Drill hole DS-045 intercepted two zones of higher silver
and gold grades within the main Don Ese vein including 7.7 meters of 2.31 g/T
of gold and 118.5 Ag g/T of silver and 6.2 meters of 0.65g/T of gold and 176.6
g/T of silver. These two holes were completed within the resource block model
and are expected to move inferred resources to measured and indicated.

 

Commenting on these
results, Paramount CEO Christopher Crupi noted that “on a gold equivalent
basis, hole 44 is reporting 18 meters of 11.5 grams of gold per tonne. These
are exceptional results which should enhance the economic potential of the Don
Ese deposit compared to last year’s PEA (Preliminary Economic
Assessment).”

 

Paramount will now
provide Mine Development Associates (www.mda.com) with the data from a total of
16 new core holes (8,027 meters) to be incorporated into a new resource
estimate (see table below) which will be used to update the PEA. The new PEA
will also evaluate the potential for including a heap leach operation into the
project’s design, to process lower grade material which was left out of last
year’s PEA. As previously announced on November 6, 2013, metallurgical tests
support the potential viability of a heap leach component which would increase
the resource base and could also serve as a low cost start-up option prior to
commencing underground mining and milling.

 

Results from the final
two holes drilled at Don Ese in 2014 are as follow:

 

Hole #   Area      Total
Length      From (m)            To (m)  Width (m)           Au g/T  Ag g/T

DS-044  DON ESE              436.35   421.15   421.80   0.65       0.861     79.20

435.00   435.50   0.50       1.000     224.00

452.90   461.15   8.25       1.446     201.65

468.10   468.80   0.70       0.264     44.30

472.70   490.70   18.00     4.461     424.88

including             472.70   476.10   3.40       19.178   1873.59

DS-045  DON ESE              542.15   495.60   501.80   6.20       0.651     176.58

507.20   514.90   7.70       2.312     118.50

True widths are
expected to be 85 % of reported intercepts.

 

A map is available at
the following address: http://media3.marketwire.com/docs/929538A.pdf.

 

Previously reported
drill holes, to be incorporated in an updated resource estimate.

 

Hole #   Area      Total
Length      From (m)            To (m)  Width (m)           Au g/T  Ag g/T

DS-13-030           DON ESE              524.4     433.60   438.40   4.80       0.082     9.95

442.35   492.90   50.55*  1.325     150.00

Including             451.55   458.10   6.55       2.469     314.67

Including             467.80   487.15   19.35     2.300     245.80

DS-13-031           DON ESE              683         586.80   591.40   4.60       1.31       21.660

DS-13-032           DON ESE              621.95   515.75   538.25   22.50*  3.16       44.340

including             527.10   530.05   2.95       14.180   96.15

including             527.10   527.95   0.85       42.500   186.00

including             535.55   538.25   2.30       6.560     113.97

including             535.95   536.55   0.60       17.000   125.00

541.15   543.90   2.75       0.370     18.78

555.90   556.40   0.50       2.340     13.10

579.45   579.95   0.50       1.068     14.30

DS-13-033           DON ESE              634.20   522.80   523.35   0.55       1.075     816.00

537.95   538.70   0.75       0.678     136.00

544.30   546.70   2.40       0.694     74.43

552.15   553.15   1.00       1.147     38.10

561.55   563.70   2.15       0.481     23.91

576.55   585.95   9.40       0.562     52.33

Including             580.00   582.35   2.35       1.286     87.53

DS-13-034           DON ESE              643.20   573.80   592.75   18.95     0.890     111.77

Including             588.10   591.20   3.10       2.400     183.45

607.05   609.40   2.35       1.740     36.67

DS-13-035           DON ESE              423.50   332.00   348.75   16.75*  1.479     209.80

Including             338.10   342.50   4.40       3.567     484.44

352.85   357.75   4.90       0.143     25.37

364.65   366.60   1.95       3.969     200.85

398.15   398.65   0.50       1.000     247.00

DS-13-036           DON ESE              505.05   421.35   422.10   0.75       0.346     87.10

429.80   432.45   2.65       2.184     133.79

including             431.40   432.45   1.05       5.254     247.00

439.75   470.30   30.55*  0.742     86.30

including             439.75   441.75   2.00       3.034     448.00

489.40   489.95   0.55       3.794     89.30

DS-13-037           DON ESE              359.05   278.25   281.25   3.00       0.297     28.22

352.60   353.90   1.30       0.246     132.00

DS-13-038           DON ESE              340.85   296.90   304.65   7.75       2.535     230.81

including             298.00   299.65   1.65       4.190     271.24

312.05   314.00   1.95       0.198     35.90

315.45   316.05   0.60       0.407     63.40

327.00   327.90   0.90       2.440     303.00

335.00   335.65   0.65       3.913     624.00

339.35   339.85   0.50       2.457     268.00

DS-13-039           DON ESE              383.80   293.30   298.80   5.50       1.475     198.71

300.25   301.65   1.40       0.513     89.90

326.35   326.80   0.45       0.224     70.50

344.80   345.45   0.65       0.752     210.00

367.90   371.85   3.95       11.866   2294.78

including             369.70   371.85   2.15       17.995   3435.44

including             369.70   370.50   0.80       29.400   4833.00

374.30   376.10   1.80       0.509     161.67

DS-13-040           DON ESE              466.25   354.45   378.35   23.90     4.986     335.94

including             361.10   367.85   6.75       12.797   741.77

including             363.00   364.65   1.65       37.130   1883.88

including             363.95   364.65   0.70       59.700   2793.00

400.25   401.90   1.65       0.600     54.34

413.85   414.55   0.70       0.656     55.00

DS-13-041           DON ESE              472.60   384.75   421.20   36.45     3.662     222.17

including             393.55   397.35   3.80       2.769     242.99

including             403.05   418.90   15.85     7.042     365.25

including             405.05   409.65   4.60       16.509   723.45

including             405.05   406.05   1.00       56.600   1907.00

including             407.05   408.00   0.95       10.900   483.00

423.80   424.35   0.55       1.050     33.50

427.70   428.95   1.25       1.711     130.26

DS-13-042           DON ESE                            

551.7     477.40   479.15   1.75       0.295     40.60

480.85   484.80   3.95       0.855     47.32

488.10   511.45   24.35     4.818     311.69

Including             488.10   491.80   3.70       13.214   697.36

Including             495.50   501.55   6.05       8.712     584.02

DS-13-043           DON ESE              438.7     343.50   351.30   7.80       0.597     93.68

359.05   360.95   1.90       1.238     165.00

371.95   373.20   1.25       0.875     191.00

382.00   382.60   0.60       0.500     144.00

418.05   421.60   3.55       0.696     119.12

True widths range from
60% to 95 % of reported intercept; for more details visit www.paramountgold.com

 

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 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 and
Acme Laboratories, Vancouver, B.C., using fire assay atomic absorption methods
for gold and aqua regia digestion ICP methods for other elements.

 

San Miguel Project PEA

 

The PEA was prepared
by Metal Mining Consultants (“MMC”) of Denver, Colorado incorporating
a resource model developed by Mine Development Associates (www.mda.com). The
PEA confirms that the San Miguel Project represents an unusually robust
economic opportunity to develop a low cost mine in the prolific Sierra Madre
belt in Mexico. In their analysis, MMC proposed a 4,000 tonnes per day mill fed
by open pits and underground mines, resulting in a projected 14 year operation
with a total metal production of 803,000 ounces of gold and 43.2 million ounces
of silver (1,637,000 ounces of gold equivalent at the base case gold-to-silver
price ratio of 51.7 to 1).

 

Start-up capital costs
including working capital are estimated at $243 million. Sustaining capital
costs over the project’s life are projected to be an additional $227 million.
With $70.3 million in contingencies, total life-of-mine capital costs are
estimated at $540 million. Projected life-of-mine average cash operating costs are
$512 per ounce of equivalent gold recovered. The total cost of production
(including cash operating costs and total capital and contingency costs over
the life of the mine) is estimated at US$842 per ounce of gold equivalent,
which compares favorably with current producers in the region. At a gold price
of $1500 per ounce and a silver price of $29 per ounce (the 3 year trailing
average of gold and silver prices at the end of January 2013), the San Miguel
PEA estimated a $1.1 billion pre-tax net cash flow, a $707 million pre-tax net
present value at a 5% discount rate and a highly accretive internal rate of
return of 33.2%.

 

Note that the PEA
incorporates inferred mineral resources which are considered to be too
geologically speculative to have the economic considerations applied to them
that would enable them to be categorized as mineral reserves and, as such, do
not have demonstrated economic viability. There can be no certainty that the
estimates contained in the PEA will be realized.

 

About Paramount

 

Paramount is a U.S.
based exploration and development company with multi-million ounce advanced
stage precious metals projects in northern Mexico (San Miguel) and Nevada
(Sleeper). Fully-funded exploration and engineering programs are now in
progress at these two core projects which are expected to generate substantial
additional value for our shareholders.

 

The San Miguel Project
consists of over 142,000 hectares (over 353,000 acres) in the Palmarejo
District of northwest Mexico, making Paramount the largest claim holder in this
rapidly growing precious metals mining camp. The San Miguel Project is ideally
situated near established, low cost production where the infrastructure already
exists for early, cost-effective exploitation. A PEA for San Miguel was completed
and announced on February 28, 2013.

 

The Sleeper Gold
Project is located off a main highway about 25 miles from the town of
Winnemucca. In 2010, Paramount acquired a 100% interest in the project
including the original Sleeper high-grade open pit mine operated by Amax Gold
from 1986 to 1996 as well as staked and purchased lands now totaling 2,570
claims and covering about 47,500 acres which stretch south down trend to
Newmont’s Sandman project. This acquisition is consistent with the Company’s
strategy of district-scale exploration near infrastructure in established
mining camps. A PEA was completed for Sleeper and announced on July 30, 2012.

 

Summary of PZG’s
Estimated NI 43-101 Compliant Resources

 

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       20,459,000

Total                                     2,802,000                            66,702,000

For details on these
resource estimates please see the following news releases: San Miguel Resource
Estimate, September 5, 2012; and Sleeper Resource Estimate, July 30, 2012.

 

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 San Miguel
Project and the expected results of this work, estimates of resources including
expected volumes and grades and the economic projections included in the
project’s PEA. 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, 2013 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

866-481-2233

 

Paramount Gold and
Silver Corp.

Chris Theodossiou

Investor Relations

866-481-2233

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