Paramount Gold and Silver Finds New Gold Zone at Sleeper Project in Nevada

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WINNEMUCCA, NEVADA--(Marketwire -10/20/11)- Paramount Gold and Silver Corp. (AMEX: PZG - News)(TSX: PZG - News)(Frankfurt: P6G.F - News)(WKN: A0HGKQ) ("Paramount") announced today that recent drilling on its 100%-owned Sleeper Gold Project in Nevada has (1) discovered a new mineralized zone (the "Pad zone") beneath the historic heap leach pads and (2) extended the near-surface Facilities zone further to the north. These new results were not included in the recently announced NI 43-101 compliant resource estimate prepared by SRK Consulting (www.srk.com) and should therefore expand the known resource. Further drilling is planned to enlarge the new Pad zone discovery.

The Pad discovery resulted from drilling around the main Sleeper structure north from the Facilities zone. Drill hole PGR-11-022, the northern most drill hole under the heap leach pads, intersected 24 meters grading 0.63 g/T of gold and 1.3 g/T of silver in an entirely new mineralized zone which was not recognized by the condemnation drilling conducted in the area before locating the heap leach pads. Hole PGR-11-023 also intersected this new target, returning higher grade intercepts such as 1.5 meters grading 6.29 g/T of gold and 6.3 g/T of silver comparable to the grades exploited in the historical Sleeper vein.

Christopher Crupi, Paramount's CEO commented, "These results confirm the potential for the continued growth of Sleeper mineral resources by way of geologic discovery. We have identified additional similar targets which have emerged from our careful analysis of the project's extensive data base; proving once again that the best place to find gold is at a former producing gold mine. Some of these new targets could repeat the higher grades of the original Sleeper mine. A new drill program to test these targets will begin shortly."

 

----------------------------------------------------------------------------
                                                   Interval
Hole ID     Area                  From (m)  To (m)      (m)  Au g/T   Ag g/T
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PGC-11-011  Facilities                 2.4     6.0      3.6   0.643      3.5

                                      14.0    18.9      4.9   0.307      2.3
                                      24.1    36.0     11.9   0.392      4.5
                                      40.0    59.2     19.2   0.401      5.0
                                      85.0    92.0      7.0   0.248      6.2
                                     146.0   158.0     12.0   0.538      7.3
                                     168.0   170.0      2.0   0.312      4.4
                                     192.0   194.0      2.0   0.294      4.7
                                     213.0   215.0      2.0   0.450      2.5
                                     223.0   225.0      2.0   0.386      3.1
                                     343.0   345.0      2.0   0.273      3.0
                                     367.0   371.0      4.0   0.497      6.4
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            Exploration,                                           less than
PGR-11-022   Leach Pad               152.4   153.9      1.5   0.487      0.5

                                     192.0   216.4     24.4   0.634      1.3
                                     228.6   231.6      3.0   0.298      0.8
                                     248.4   249.9      1.5   0.483      2.3
----------------------------------------------------------------------------
            Exploration,
PGR-11-023   Leach Pad               115.8   117.3      1.5   0.316      1.1
                                     137.2   158.5     21.3   0.973      1.7
                         including   138.7   140.2      1.5   6.290      6.3
                        ----------------------------------------------------
                         including   155.4   158.5      3.0   1.465      2.0
                        ----------------------------------------------------
                                     166.1   170.7      4.6   2.203      1.6
                                     179.8   189.0      9.1   1.082      1.7
                         including   181.4   182.9      1.5   3.780      4.8
                        ----------------------------------------------------
                                     192.0   198.1      6.1   1.696      2.1
                         including   193.5   196.6      3.0   3.070      3.5
                        ----------------------------------------------------
                                     210.3   211.8      1.5   0.437      1.7
                                     224.0   225.6      1.5   0.256      0.7
                                     318.5   326.1      7.6   0.455      2.9
                                     330.7   335.3      4.6   0.239      2.1
                                     338.3   345.9      7.6   0.302      2.5
                                     352.0   353.6      1.5   0.283     12.7
                                     358.1   359.7      1.5   0.291      1.6
                                     381.0   385.6      4.6   0.354     10.5
----------------------------------------------------------------------------

The orientation of these drill holes was designed to intercept the structural features at right angles so as to provide a close approximation of true width. However, further drilling and detailed geological modeling are required to confirm this interpretation.

The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca, Nevada. Acquired by Paramount in 2010, the 49.6 square mile project area includes the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as newly purchased claims stretching south down trend to Newmont's Sandman project.

The current work program at Sleeper is consistent with 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. As a former high-grade gold producer, Sleeper is ideally located near established, low cost production in Nevada, where the infrastructure already exists for early, cost-effective exploitation. Tetra Tech (www.TetraTech.com), a leading international mining consulting firm, has been engaged to prepare an NI 43-101 compliant Preliminary Economic Assessment of the Sleeper gold project for completion in early 2012.

The historical Sleeper is emerging as one of Nevada's largest new undeveloped gold resources, containing an in situ resources of 3.7 million ounces of gold and 33.5 million ounces of silver (see table below and Paramount news release of September 13, 2011).

 

                           Sleeper Resource Table

          ------------------------------------------------------------------
                                            MEASURED
----------          --------------------------------------------------------
             Cut-off
Material      Au g/T      Tonnes     Au g/T     Ag g/T      Au Oz      Ag Oz
----------------------------------------------------------------------------
Oxide           0.20  31,960,502       0.39       4.23    397,669  4,346,620
Sulfide         0.25  91,074,631       0.54       5.06  1,569,495 14,816,501
----------------------------------------------------------------------------
        Total        123,035,133       0.50       4.84  1,967,164 19,163,121
----------------------------------------------------------------------------



          ------------------------------------------------------------------
                                            INDICATED
----------          --------------------------------------------------------
          Cut-off Au
Material         g/T      Tonnes     Au g/T     Ag g/T      Au Oz      Ag Oz
----------------------------------------------------------------------------
Oxide           0.20  10,829,438       0.33       4.12    114,203  1,434,501
Sulfide         0.25  38,898,882       0.44       3.79    544,032  4,739,953
----------------------------------------------------------------------------
        Total         49,728,320       0.41       3.86    658,235  6,174,454
----------------------------------------------------------------------------



          ------------------------------------------------------------------
                                     MEASURED AND INDICATED
----------          --------------------------------------------------------
          Cut-off Au
Material         g/T      Tonnes     Au g/T     Ag g/T      Au Oz      Ag Oz
----------------------------------------------------------------------------
Oxide           0.20  42,789,940       0.37       4.20    511,872  5,781,121
Sulfide         0.25 129,973,513       0.51       4.68  2,113,527 19,556,454
----------------------------------------------------------------------------
        Total        172,763,453       0.47       4.56  2,625,399 25,337,575
----------------------------------------------------------------------------



 

          ------------------------------------------------------------------
                                            INFERRED
----------          --------------------------------------------------------
          Cut-off Au
Material         g/T      Tonnes     Au g/T     Ag g/T      Au Oz      Ag Oz
----------------------------------------------------------------------------
Alluvial        0.20     151,675       2.03          -      9,890          -
Oxide           0.20  13,191,635       0.32       3.42    136,145  1,450,516
Sulfide         0.25  68,410,857       0.44       3.07    974,376  6,752,446
----------------------------------------------------------------------------
        Total         81,754,167       0.43       3.12  1,120,410  8,202,962
----------------------------------------------------------------------------

Exploration activities are being conducted at Sleeper by Paramount Gold under supervision of Glen van Treek, Exploration Vice President of the Company, and Bill Threlkeld, a Qualified Person as defined by National Instrument 43-101, both of whom have reviewed and approved this press release. An ongoing quality control/quality assurance protocol is being employed during the program including blank, duplicate and reference standards in every batch of assays. Samples are being assayed at ALS Chemex, Reno, Nevada while multi-element analysis is being performed in Vancouver, Canada. External check samples are also being conducted at Inspectorate Lab in Reno, Nevada.

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 Dunes 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, 2011 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.

Contact:

Paramount Gold and Silver Corp.
Glen Van Treek, VP Exploration
Christopher Crupi, CEO
613-226-9881

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