New Resource Estimates On Portion Of San Miguel Project 

WINNEMUCCA, NV - Paramount Gold and Silver Corp. have completed NI 43-101-compliant resource re-modeling for San Antonio and La Union, two of the seven deposits on its 100%-owned San Miguel Project in northern Mexico.

All seven of San Miguel's deposits have now been re-estimated using rigorous three dimensional geological models as required for mine planning in the project's upcoming Preliminary Economic Assessment (PEA). These new estimates, prepared by Mine Development Associates (MDA) of Reno, Nevada, represent a significant improvement in reliability from previous reporting, with higher indicated resources and lower inferred resources as expected.

The new model for the La Union deposit estimates 807,000 ounces of silver and 8,800 ounces of gold in the Indicated category at a 25 gram per tonne silver-equivalent cut-off. In the Inferred category, La Union is estimated to contain 9.03 million ounces of silver and 147,000 ounces of gold at the same cut-off. These estimates do not include 2011 drill results which will be incorporated into a new resource estimate scheduled for the second quarter of 2012. La Union includes the San Jose, San Luis and La Union zones, which were previously reported separately but are now recognized as a single deposit.

The near surface San Antonio silver deposit is estimated to contain 7.02 million ounces of silver and 3,000 ounces of gold in the Indicated category using a 25 gram per tonne silver-equivalent cut-off. Estimated inferred resources for San Antonio are 12.42 million ounces of silver and 7,700 ounces of gold at the same cut-off. Recent drill results have not been included in these estimates and drilling is ongoing.

Earlier this year, Paramount announced re-modeled resource estimates by MDA for the other five known deposits at San Miguel including the San Miguel Vein, San Francisco, Monte de Cristo-Sangre de Cristo, La Veronica and Don Ese deposits. This estimate included all 2010 drilling results. Resources for all of San Miguel's deposits will be re-estimated in the second quarter of 2012 to incorporate 2011 and early 2012 drilling. The resulting updated estimate will be used in the PEA.

MDA utilized specific geologic criteria in combination with drill sample population distributions and geologic sectional, interpretations provided by Paramount with support from MDA to define three-dimensional mineral domains for both gold and silver individually, which were then used to code the drill holes assays. The coded assays were examined statistically to identify potential high-grade outliers, some or all of which were capped after evaluating their spatial relationships with surrounding drill samples. The capped assays were composited to two-meter down-hole lengths and used to interpolate grades into 5 x 5 x 5 meter blocks that were coded to the mineral domains. Results from variography studies were used in combination with drill-hole spacing and known geologic controls to determine search distances and search ellipses. Gold and silver grades were estimated using inverse distance to the third power. Paramount`s view is that MDA has consistently employed conservative assumptions and methodologies in its estimates which should prove valuable at the PEA and a Preliminary Feasibility Study stages of the San Miguel Project.

Exploration is now completely concentrated on increasing resources. An intensive drilling program will continue into 2012 with three core rigs focused on the San Miguel Vein and San Francisco deposits as well as promising but untested strike extensions of the San Antonio, La Union and Don Ese deposits. After the completion of the next resource update efforts will shift to upgrading new inferred resources to measured and indicated throughout the San Miguel Project. Paramount is also undertaking metallurgical testing and reviewing potential process and mining options for the PEA.