Paramount Gold and Silver Secures Critical Water Rights for Its 100%-Own San Miguel Project in Mexico
WINNEMUCCA, NEVADA -- (Marketwire) -- 11/01/12 -- Paramount Gold and Silver Corp. (NYSE MKT: PZG)(NYSE Amex: PZG)(TSX: PZG)(FRANKFURT: P6G)(WKN: A0HGKQ) ("Paramount") today announced it has received final confirmation from CONAGUA, a division of SERMANAT, Mexico's Environmental and Natural Resources Ministry, granting Paramount permanent rights to 995,000 cubic meters of water per year for its San Miguel Project, equivalent to 31.6 liters per second. Paramount conducted pumping tests to determine that this extraction rate would not affect phreatic levels in the surrounding area.
Paramount believes that these new water rights should be sufficient to support the processing required for either a milling/flotation or milling/cyanide leaching scenario of up to 5,500 tonnes of ore per day which is comparable in size to the neighboring Palmarejo mine owned by Coeur d'Alene Mines Corporation. Recent metallurgical test work conducted by McClelland Laboratories (http://www.mettest.com/mliindex.htm) of Reno, Nevada proposed that milling/flotation and milling/cyanide leaching processes were likely the most economic alternatives for San Miguel mineralization (see news release of October 22, 2012).
Preliminary water needs will be defined during the Preliminary Economic Assessment (PEA) of the San Miguel Project being led by the Scott E. Wilson consulting group, which is expected to be completed in December, 2012. Paramount is developing an exploration program to define additional water resources for the area to ensure that there are sufficient supplies for a larger operation or to support alternative extraction processes currently being evaluated by Paramount's consultants.
Paramount CEO, Christopher Crupi commented that "we are continuing to de-risk San Miguel step-by-step to ensure that we can answer all the key questions which would be asked by a prospective partner or acquirer. Water rights are a very important asset required for an eventual production decision and we have acted preemptively to ensure that these rights are available to the project in sufficient quantities for a sizeable operation."
About Paramount
Paramount 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). Fully funded 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 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 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.
SUMMARY OF ALL PZG NI 43-101 COMPLIANT RESOURCE ESTIMATES
MEASURED AND INDICATED RESOURCES
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PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
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San Miguel 23,918,000 0.83 639,000 70.0 53,559,000
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Sleeper 326,963,000 0.33 3,479,000 3.86 40,606,000
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Total 4,118,000 94,165,000
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INFERRED RESOURCES
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PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
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San Miguel 37,470,000 0.69 830,000 38.00 46,243,000
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Sleeper 223,624,000 0.27 1,972,000 2.84 20,450,000
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Total 2,802,000 60,693,000
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Cautionary Note to U.S. Investors Regarding 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 future exploration work at the San Miguel Project and the expected results of this work, estimates of resources including expected volumes and grades, the anticipated completion of a PEA and estimates as to both the needs and availability of water for a mining project which could be constructed at San Miguel. 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.
Contacts:
Paramount Gold and Silver Corp.
Christopher Crupi, CEO
Chris Theodossiou, Investor Relations
866-481-2233
