Press Release: Paramount Gold and Silver Discovers A Major New Structure at San Miguel Project in Mexico
WINNEMUCCA, NEVADA--(Marketwired - Sept. 19, 2013) - Paramount Gold and
Silver Corp. (TSX:PZG) (NYSE MKT:PZG) (FRANKFURT:P6G) (WKN:A0HGKQ)
geologists from surface mapping, rock sampling and alteration analysis.
Antonio deposits. San Isidro has been recognized along strike for at least
on February 28, 2013.
per tonne). Surface sampling has consistently found high grade material,
predominantly silver. At San Miguel, higher silver values are generally
improve with depth. Rock sampling at San Isidro supports this observation.
structural system which is characterized by silica-rich replacement, massive
quartz veins and altered rocks. Over 35 % of these samples returned silver
values greater than 15 g/T and averaged a highly prospective 301 g/T silver
(almost 10 ounces per tonne).
Two shallow core holes were then drilled to confirm the orientation of the
structure and test for mineralization. Both holes successfully intersected
several veins containing excellent precious metal values including gold
grades up to 2.8 g/T and silver up to 214 g/T. The best intercept (in SI-13-
001) averaged 0.61 g/T of gold and 31.6 g/T of silver over 11 meters (from
174 to 185 m). See the table below. Further drilling is required to
determine the optimum elevation for better gold grades.
Paramount's geological team is continuing detailed surface mapping along the
structure to define areas that are potentially wider and higher grade. About
3 km. of the structural system is within Paramount's concessions. The
remainder of the San Isidro structural system strikes onto ground owned by
Fresnillo PLC, the world's largest primary silver producer. Fresnillo is
actively exploring its relatively smaller claims package which is surrounded
by Paramount's claims and lies adjacent to Coeur's Palmarejo Mine (see map
below).
Results from the two preliminary San Isidro drill holes are as follows:
Total
Length
Hole # Area (m) From (m) To (m) Width (m) Au g/T Ag g/T
--------- -------- ------ --------- ------ ------
SI-13-001 SAN ISIDRO 465.75 174.20 185.55 11.35 0.610 31.62
---------- ----------
Including 174.20 179.25 5.05 1.043 39.74
---------------------
Including 176.20 177.20 1.00 2.840 103.00
Including 182.50 183.00 0.50 1.874 155.00
193.30 194.05 0.75 0.387 41.80
252.60 254.60 2.00 0.189 21.70
278.75 280.10 1.35 1.619 206.00
330.75 331.60 0.85 0.352 18.10
371.20 372.45 1.25 0.240 214.00
394.60 395.40 0.80 0.012 82.10
--------------------- --------- -------- ------ --------- ------ ------
SI-13-002 SAN ISIDRO 274.15 13.20 14.80 1.60 0.442 0.70
---------- ----------
21.00 22.00 1.00 0.008 113.00
---------------------
65.90 67.40 1.50 0.031 57.10
74.10 75.50 1.40 0.020 58.20
108.85 111.00 2.15 0.026 33.57
242.20 244.20 2.00 0.151 78.00
--------------------- --------- -------- ------ --------- ------ ------
These holes were drilled to intersect the structures at what were thought to
be right angles and it is therefore expected that the reported intercepts
closely approximate true widths.
Christopher Crupi, Paramount's CEO, commented: "We are very excited to
discover this new structure which once again demonstrates that San Miguel
remains an outstanding exploration project as well as a robust mining
opportunity at even lower than current metal prices. We believe this
structure has the potential to deliver multiple deposits with grades that
equal anything found in the Palmarejo District."
A figure is available at the following address:
media3.marketwire.com/docs/SanIsidro899218.pdf. NI 43-101 Disclosure
Exploration activities at San Miguel are being conducted by Paramount Gold
de Mexico S.A de C.V personnel 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, who have both reviewed and
approved this press release. An ongoing quality control/quality assurance
protocol is being employed for the program including blank, duplicate and
reference standards in every batch of assays. Cross-check analyses are being
conducted at a second external laboratory on 10% of the samples. Samples are
being assayed at ALS Chemex and Acme Laboratories, Vancouver, B.C., using
fire assay atomic absorption methods for gold and aqua regia digestion ICP
methods for other elements.
San Miguel Project PEA
The PEA was prepared by Metal Mining Consultants ("MMC") of Denver, Colorado
incorporating a resource model developed by MDA. The PEA confirms that the
San Miguel Project represents an unusually robust economic opportunity to
develop a low cost mine in the prolific Sierra Madre belt in Mexico. In
their analysis, MMC proposed a 4,000 tonnes per day mill fed by open pits
and underground mines, resulting in a projected 14 year operation with a
total metal production of 803,000 ounces of gold and 43.2 million ounces of
silver (1,637,000 ounces of gold equivalent at the base case gold-to-silver
price ratio of 51.7 to 1).
Start-up capital costs including working capital are estimated at $243
million. Sustaining capital costs over the project's life are projected to
be an additional $227 million. With $70.3 million in contingencies, total
life-of-mine capital costs are estimated at $540 million. Projected
life-of-mine average cash operating costs are $512 per ounce of equivalent
gold recovered. The total cost of production (including cash operating costs
and total capital and contingency costs over the life of the mine) is
estimated at US$842 per ounce of gold equivalent, which compares favorably
with current producers in the region. At a gold price of $1500 per ounce and
a silver price of $29 per ounce (the 3 year trailing average of gold and
silver prices at the end of January 2013), the San Miguel PEA estimated a
$1.1 billion pre-tax net cash flow, a $707 million pre-tax net present value
at a 5% discount rate and a highly accretive internal rate of return of
33.2%. Note that the PEA incorporates inferred mineral resources which are
considered to be too geologically speculative to have the economic
considerations applied to them that would enable them to be categorized as
mineral reserves and, as such, do not have demonstrated economic viability.
There can be no certainty that the estimates contained in the PEA will be
realized.
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.
(MORE TO FOLLOW) Dow Jones Newswires
September 19, 2013 06:00 ET (10:00 GMT)
S.DJ PZG PZG.T PZG-T
US69924P1021 I/MNG .MINING I/XDJGI I/XRUS N/DJCS N/DJG N/DJGP N/DJGS N/DJGV N/DJI N/DJIV N/DJN N/DJOS N/DJPT N/DN N/OSCM N/OSME .METAL N/WED N/WER N/CNW N/DJPN N/DJWI N/PRL N/TPCT M/BSC M/MMR M/TPX P/ACMD P/AEQI P/PSH P/SGN P/WMAI P/WMMI R/CN .CANADA R/NME .NAMERICA R/ONT .ONTARIO DJ/TAB
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