Paramount Gold and Silver Reports Exceptional Results From Ongoing Drilling at Its Sleeper Gold Project in Nevada

WINNEMUCCA, NEVADA--(Marketwired - May 9, 2013) - Paramount Gold and Silver Corp. (NYSE MKT:PZG)(PZG.TO)(P6G.F)(WKN:A0HGKQ) ("Paramount") announced today that new core drilling on its 100%-owned Sleeper Gold Project in Nevada has intercepted exceptional gold and silver grades from three zones: below the Sleeper Pit; west of the Wood Pit; and in the Facilities area.

Paramount is currently drilling core to achieve four objectives:

• Expand known resources at the south end of the Sleeper pit

• Extend the Facilities deposit to the north into the recently discovered Pad Zone

• Improve the confidence level of current resources

• Obtain material for metallurgical testing

The Facilities deposit, below and down dip of the historical Sleeper Pit and the southwest part of the Wood Zone were selected as representative of mineralization in each deposit and drilled to collect material for metallurgical testing. Drill core samples from these holes were prepared for coarse column and other metallurgical testing at McClelland Laboratories of Reno, Nevada (http://www.mettest.com/mliindex.htm) and analyzed by ALS Chemex in Vancouver. Drill holes in the Facilities area and below the Sleeper Pit were oriented to define the true widths of these deposits and encountered numerous intervals of gold and silver mineralization as reported below.

Drill hole PGC-13-030 in the margins of the West Wood area intercepted a wide zone of disseminated mineralization around a hydrothermal breccia. The 199.6 meter intercept grading 0.94 grams per tonne (g/T) of gold and 3.14 g/T of silver includes portions with gold grades up to 10.1 g/T of gold. Drill hole PGC-13-030 was drilled at an oblique angle to the deposit, resulting in an estimated true width of about 150 meters (see cross section below)-one of the best holes drilled by Paramount on the Sleeper Gold Project to date.

Hole #	Area	Total Length	From (m)	To (m)	Width (m)	Au g/T	Ag g/T
PGC-12-028	Facilities		49.4	115.5	66.1	0.22	3.2
			123.4	153.6	30.2	0.29	1.6
		264.3	158.5	198.1	39.6	0.38	2.5
			208.8	214.9	6.1	0.19	1.2
			219.5	227.1	7.6	0.20	0.9
PGC-12-029	Sleeper		115.4	121.5	6.1	0.16	0.3
			128.6	133.2	4.6	0.21	0.6
			172.2	184.4	12.2	0.11	0.3
		616.0	202.7	210.3	7.6	0.16	0.9
			338.3	368.8	30.5	0.34	1.4
			384.0	416.1	32.0	0.37	0.9
			440.7	480.1	39.3	0.90	1.8
		including	462.1	480.1	18.0	1.69	3.1
PGC-13-030	West Wood	396.2	57.9	257.6	199.6	0.94	3.1
		including	105.2	126.5	21.3	1.20	0.5
		including	140.2	146.3	6.1	1.56	1.9
		including	178.3	189.0	10.7	1.32	1.4
		including	216.4	251.5	35.1	2.49	14.7

Christopher Crupi, CEO of Paramount commented "Our metallurgical and resource drilling continues to confirm the gold and silver grade distribution defined in our resource estimation. These results improve our understanding of the various styles of mineralization within and around the original Sleeper deposit. We are confident that this information will improve our existing resource and also lead to new discoveries."

Sleeper PEA

The PEA prepared by Metal Mining Consultants of Denver, Colorado (formerly Scott E. Wilson Consulting Inc.), was released on July 30, 2012. The PEA specifies a development scenario for Sleeper consisting of a large-scale open pit mining operation with a heap leach processing plant handling both oxide and sulphide material, producing a gold-silver dore. The base case scenario incorporates an 81,000 tonnes per day operation (approximately 30 million tonnes per year throughput), resulting in a projected 17 year operation with average annual production of 172,000 ounces of gold and 263,000 ounces of silver. Projected life-of-mine average cash operating costs are US$767 per ounce of equivalent gold recovered. Start-up capital costs for this project scenario are estimated at US$346 million. Sustaining capital costs over the project's life are estimated at an additional $278 million. Total capital cost contingencies over the project life are estimated at an additional $64 million, bringing the total life of mine capital costs to $688 million. The total cost of equivalent gold production (including cash operating costs and total capital and contingency costs over the life of the mine) is estimated at US$996 per ounce.

At a gold price of US$1,384 per ounce and a silver price of $26.33 per ounce (the 3 year trailing average of gold and silver prices as at July 3, 2012), the Sleeper base case has a US$1.2 billion pre-tax net cash flow, a US$695 million net present value at a 5% discount rate and an internal rate of return (IRR) of 26.8%. At US$1,618 gold (the spot price on July 3, 2012), the total pre-tax net cash flow increases by 160% over the base case to US$1.9 billion, the net present value at a 5% discount rate almost doubles to US$1.2 billion and the internal rate of return improves to a robust 40%.

NI 43-101 Disclosure

Exploration activities at Sleeper are being conducted by Paramount 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, 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 an Inspectorate Lab in Reno, Nevada.

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.

Note: 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 expected results of this work, estimates of resources for the Sleeper and San Miguel projects including expected volumes and grades and the economic projections included in the Sleeper 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, 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.

A map is available at the following address: http://media3.marketwire.com/docs/130509_PZG_MAP.pdf.