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December 12, 2011

More High-Grade Drill Results Expand Key Zones at Paramount Gold and Silver’s San Miguel Project in Mexico

WINNEMUCCA, NEVADA–(Marketwire -12/12/11)- Paramount Gold and Silver Corp. (AMEX: PZG – News)(TSX: PZG – News)(Frankfurt: P6G.F – News)(WKN: A0HGKQ) (“Paramount”) today reported more exceptional high-grade intercepts from ongoing in-fill and exploration drilling at its 100%-owned San Miguel Project in northwestern Mexico. The exciting new results are from the Don Ese North target and the San Antonio silver zone, two important discoveries made by Paramount in the past year.

Two new core holes drilled at Don Ese North have intersected significant widths (up to 38.9 meters) of strong gold and silver values including 5.55 meters grading 4.73 g/T of gold and 249.68 g/T of silver. This drilling, together with previously reported results, confirms the continuity of this wholly-owned high-grade zone first discovered last December (see Paramount news release ofDecember 9, 2010).

The Don Ese North vein strikes north-northwest directly towards the nearby Palmarejo Mine owned by Couer d`Alene and appears to be an extension of the structure which hosts this highly successful gold-silver producer. True width of the Don Ese vein is typically in the range of 10 meters but is locally up to 19 meters wide. Don Ese is a massive quartz vein with textures characteristic of low sulfidation, epithermal deposits consistent with other vein deposits in the district. To date, the mineralized vein has been traced by core drilling along a strike length of nearly 1,000 meters and the feature remains open down dip. Paramount is also expecting to receive permits shortly to expand drilling along strike to the highly-prospective northern portion of its wholly-owned Don Ese South target area.

Assay results were also received for five new holes drilled on the fast-growing San Antonio bulk tonnage silver-rich zone. Drill holes into the near-surface San Antonio deposit continue to return multiple intercepts with high silver values, some of which are exceptional. Drill Hole number SA-11-78 intercepted 1,440 g/T of silver in one sample within a particularly wide and high-grade zone.

Christopher Crupi, Paramount`s CEO, commented that “results from Don Ese North continue to support a favorable comparison with the neighboring Palmarejo mine in terms of width and grade. Similar success on the southern extension would be highly significant. Meanwhile, the surprising San Antonio zone continues to generate impressive silver intercepts right from surface. San Antonio is emerging as a potentially high value open pit deposit with a very low strip ratio.”


Hole #       Area       Total Length    From      To   Width  Au g/t  Ag g/t
SA-11-077    San Antonio      142.70   49.10   57.35    8.25    0.00  228.16
                                       59.35   69.55   10.20    0.00   38.92
                                       82.70   85.40    2.70    0.00   76.58
SA-11-078    San Antonio      151.65   31.70   80.60   48.90    0.00  216.10
                           including   63.60   75.15   11.55    0.01  594.57
                           including   70.75   72.35    1.60    0.02 1440.00
SA-11-079    San Antonio      200.65   34.85   35.35    0.50    0.01  762.00
                                       71.10   73.35    2.25    0.00  275.44
                                       78.50   87.20    8.70    0.01  245.96
SA-11-080    San Antonio      163.95   32.60   36.95    4.35    0.00   53.56
                                       69.40   73.10    3.70    0.02   68.98
                                       76.90   84.55    7.65    0.00   44.11
SA-11-081    San Antonio      185.30    5.35   10.55    5.20    0.00   19.74
                                       20.50   25.30    4.80    0.00   28.48
                                       38.40   42.70    4.30    0.00   32.85
                                       45.45   62.00   16.55    0.00   41.38
                                       72.60   84.60   12.00    0.00   30.25
                                       91.10   94.20    3.10    0.00   31.06
                                      100.30  105.40    5.10    0.00   18.99
                                      116.45  121.15    4.70    0.01   90.74
                                      122.55  126.65    4.10    0.00   36.25
                                      147.90  157.30    9.40    0.00  115.35
DS-11-019    Don Ese          422.05  369.30  400.85   31.55    1.21   79.00
                           including  382.80  394.90   12.10    2.46  162.56
DS-11-020    Don Ese          551.30  453.15  492.05   38.90    2.26  139.41
                           including  457.95  460.35    2.40    7.09  305.96
                           including  469.15  473.40    4.25    4.51  303.96
                           including  480.80  486.35    5.55    4.73  249.68
                                      500.00  503.60    4.80    0.18   26.64

The orientation of these drill holes was designed to intercept the structural features at right angles so as to provide a close approximation to true width. Deeper drilling at Don Ese may have experienced some deviation in the planned intersections, requiring additional analysis and modeling to determine true widths of structures.

Paramount has commissioned Mine Development Associates (MDA, of Reno, Nevada to update resource estimations on the San Miguel project. MDA is expected to complete modeling and resource estimates for deposits on the La Union Vein structure (San Jose, San Luis and La Union) and the silver-rich San Antonio bulk tonnage zone in December 2011. These are the remaining deposits which were not updated in April 2011. With this update, Paramount will have re-modeled all the San Miguel deposits to current industry standards required for mine planning. The other deposits currently being drilled (San Miguel, San Francisco and Don Ese) will also be re-estimated in early 2012.

Updated models for all of the identified San Miguel deposits will be incorporated into a Preliminary Economic Assessment (PEA) planned for next year which will evaluate mining scenarios, mining rates and process alternatives and define a path to a Preliminary Feasibility Study which would report reserves. In addition, the Company is continuing to explore the potential of its large property position and is prioritizing numerous untested targets.

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, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount Gold

Paramount Gold 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 188,000 hectares (465,000 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, containing an in situ measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver and an additional inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver (see table at

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 San Miguel Project and the expected results of this work. 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, 2011 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.

Paramount Gold and Silver Corp.
Glen Van Treek, VP Exploration
Chris Theodossiou, Investor Relations

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