Paramount Gold and Silver Corp. (NYSE
Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount")
announced today it has 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 (see news
release of April 11, 2011). 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.
Details of the new resource estimates (shown as of December,
2011) and the most recent estimates for the other deposits are:
----------------------------------------------------------------------------
INDICATED RESOURCES(1,2,3,4)
----------------------------------------------------------------------------
Deposits Cut-off Tonnes Au g/t Au Ounces Ag g/t Ag Ounces Update
----------------------------------------------------------------------------
MDA,
San Miguel 25 g/t April
Vein AgEq 3,916,000 0.68 86,000 56 7,005,000 2011
MDA,
La 25 g/t April
Veroncia AgEq 476,000 0.08 1,000 61 930,000 2011
Monte
Cristo- MDA,
Sangre De April
Cristo 2011
MDA,
April
Don Ese 2011
MDA,
San April
Francisco 2011
----------------------------------------------------------------------------
Total MDA MDA,
April April
2011 4,392,000 0.61 87,000 57 7,935,000 2011
----------------------------------------------------------------------------
25g/t MDA, Dec
La Union AgEq 564,000 0.48 8,800 45 807,000 2011
San 25g/t MDA, Dec
Antonio AgEq 3,049,000 0.03 3,000 72 7,017,000 2011
----------------------------------------------------------------------------
Total MDA
December MDA, Dec
2011 3,613,000 0.10 11,800 68 7,824,000 2011
----------------------------------------------------------------------------
Total San
Miguel 8,005,000 0.38 98,800 62 15,759,000
----------------------------------------------------------------------------
----------------------------------------------------------------------------
INFERRED RESOURCE(1,2,3,4)
----------------------------------------------------------------------------
Area cut-off Tonnes Au g/t Au Ounces Ag g/t Ag Ounces Update
----------------------------------------------------------------------------
MDA,
San Miguel 25 g/t April
Vein AgEq 10,300,000 0.57 188,000 30 9,809,000 2011
MDA,
La 25 g/t April
Veroncia AgEq 3,104,000 0.09 9,000 47 4,658,000 2011
Monte
Cristo- MDA,
Sangre de 25 g/t April
Cristo AgEq 3,520,000 0.13 14,000 40 4,503,000 2011
MDA,
90 g/t April
Don Ese AgEq 1,844,000 2.87 170,000 145 8,587,000 2011
MDA,
San 25 g/t April
Francisco AgEq 15,312,000 0.69 342,000 16 7,842,000 2011
----------------------------------------------------------------------------
Total MDA MDA,
April April
2011 34,080,000 0.66 723,000 32 35,399,000 2011
----------------------------------------------------------------------------
25 g/t MDA, Dec
La Union AgEq 6,270,000 0.73 147,000 45 9,030,000 2011
San 25 g/t MDA, Dec
Antonio AgEq 5,540,000 0.04 7,700 70 12,419,000 2011
----------------------------------------------------------------------------
Total MDA
December MDA, Dec
2011 11,810,000 0.41 154,700 57 21,449,000 2011
----------------------------------------------------------------------------
Total San
Miguel 45,890,000 0.60 877,700 38 56,848,000
----------------------------------------------------------------------------
1 All resources except Don Ese reported using a 25 g/t AgEq, which captures
mineralization potentially available to open-pit extraction.
2 Don Ese resources reported using a cutoff of 90 g/t AgEq, which captures
mineralization potentially mineable by underground methods.
3 Ag equivalent grade = Ag grade + Au grade (i) 60.
4 Rounding may cause apparent discrepancies.
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.
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 news
release. Michael Gustin of MDA, a Qualified Person responsible for
resource estimation, has also reviewed and approved the portions of
this news release that relate to the San Miguel resources. 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 expected to generate substantial additional value for
our shareholders. Engineering studies are also scheduled for
completion in 2012 to define a development path and economic
valuation for each project.
The San Miguel Project consists of 150,000 hectares 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 consistent with
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
http://www.paramountgold.com/Resources/Index.asp).
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.
Contacts: Paramount Gold and Silver Corp. Glen Van Treek, VP
Exploration Chris Theodossiou, Investor Relations 866-481-2233
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