Paramount Reports Exceptional Results At Sleeper Gold Project

WINNEMUCCA, NV - Paramount Gold and Silver Corp. reported 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. 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.

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 one of the best holes drilled by Paramount on the Sleeper Gold Project to date.

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, 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.