Paramount Gold and Silver Corp. (NYSE
MKT:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount")
announced today that new core drilling at its 100%-owned Sleeper
Gold Project in Nevada has intercepted gold and silver
mineralization west of the Pad zone and below the old Sleeper Pit.
Paramount recently completed 24 core holes totaling 10,313
meters (33,835 ft.) at Sleeper in a program designed to extend
known resource areas, acquire material for metallurgical testing
and update the resource model. The program focused on the West Wood
area, PAD and Facilities zones which lie adjacent to each other and
south of the Sleeper mine.
PGC-13-034 was drilled from the PAD zone toward the Sleeper Pit
to test the original high-grade Sleeper structure below the deepest
holes drilled by previous operators. PGC-13-034 intercepted
numerous intervals with gold and silver values well above the
average resource grade including several intercepts above 2 g/T of
gold. The most significant intercept of 32 meters averaging 1.47
g/T of gold and 1.9 g/T of silver was found 100 meters directly
below the bottom of the Sleeper Pit. Drill Hole PCG-13-034 is
likely to add to resources but, more importantly, it has also
demonstrated that the original high-grade Sleeper structure remains
open and potentially productive at depth. It appears that this
highly prospective depth extension was not previously found and
exploited due to obstructions which prevented Amax, the mine
operator, from being able to drill the target effectively.
Paramount has commissioned SRK Consulting (www.srk.com) to
update the Sleeper resource estimate to incorporate the data from
44 new drill holes totaling over 15,000 meters (more than 49,000
ft.) completed since the resource estimation used in last year's
Preliminary Economic Assessment (PEA). Core from the most recent
drilling has also been submitted to McClelland Lab in Reno, Nevada
for metallurgical tests designed to improve recoveries,
particularly for the higher grade West Wood zone.
Paramount is developing a comprehensive new geological and
structural model to be used in the updated resource estimation and
to design a new exploration program with two objectives: to improve
the economics of the existing PEA by adding resources at a better
grade and; to discover new higher grade structures similar to the
original Sleeper mine within the large claim block assembled by
Paramount in the trend that runs south from the Sleeper mine to
Newmont's Sandman project.
Detailed intercepts from PGC-13-034 are as follow:
--------------------------------------------------------------------------
Total
Hole # Area Length (m) From (m) To (m) Width (m) Au g/T Ag g/T
--------------------------------------------------------------------------
9.75 23.47 13.7 0.27 2.50
36.58 42.67 6.1 0.17 2.00
47.24 97.54 50.3 0.14 1.50
146.3 158.5 12.2 0.24 1.60
PGC-13-034 Sleeper 498.96 167.64 185.93 18.3 0.44 2.30
190.5 196.6 6.1 0.20 0.90
213.36 222.5 9.1 0.40 0.90
265.18 269.75 4.6 0.30 1.90
275.84 307.85 32.0 1.47 1.90
313.94 321.56 7.6 0.32 1.00
413.92 422.15 8.2 0.39 0.70
--------------------------------------------------------------------------
PGZ-13-034 was drilled at an oblique angle to the mineralized
zone for metallurgical purposes and these intervals are therefore
not true widths. However, the true width of the 32 meter intercept
is estimated to be not less than 25 meters.
Christopher Crupi, Paramount CEO, commented that "we are having
considerable success optimizing the Sleeper PEA. Recent drilling is
likely to expand the resource within the proposed pit while also
increasing the overall resource grade. We are also enriching our
understanding of the Sleeper deposit which should help us to find
analogous structures within our large land position. We are
increasingly confident that the structural setting for the original
Sleeper mine has been repeated on our property and that we will be
able to replicate its size and grade."
A map is available at the following address:
http://media3.marketwire.com/docs/PGC0801.pdf
Sleeper PEA
The PEA prepared by Metal Mining Consultants of Denver, Colorado
(formerly Scott E. Wilson Consulting Inc.), 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.
At a gold price of US$1,384 per ounce and a silver price of
$26.33 per ounce (the 3 year trailing average of gold and silver
prices as at July 3, 2012), the Sleeper base case has a US$1.2
billion pre-tax net cash flow, a US$695 million net present value
at a 5% discount rate and an internal rate of return (IRR) of
26.8%. Cash flows are highly leveraged to the gold and silver
price.
NI 43-101 Disclosure
Exploration activities at Sleeper are being conducted by
Paramount 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, both of whom have reviewed
and approved this press release. An ongoing quality control/quality
assurance protocol is being employed during the program including
blank, duplicate and reference standards in every batch of assays.
Samples are being assayed at ALS Chemex, Reno, Nevada while
multi-element analysis is being performed in Vancouver, Canada.
External check samples are also being conducted at an Inspectorate
Lab in Reno, Nevada.
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 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.
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.
Summary of PZG's Estimated NI 43-101 Compliant Resources
MEASURED AND INDICATED RESOURCES
----------------------------------------------------------------------------
PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
----------------------------------------------------------------------------
San Miguel 23,918,000 0.83 639,000 70.0 53,559,000
----------------------------------------------------------------------------
Sleeper 326,963,000 0.33 3,479,000 3.86 40,606,000
----------------------------------------------------------------------------
Total 4,118,000 94,165,000
----------------------------------------------------------------------------
INFERRED RESOURCES
----------------------------------------------------------------------------
PROJECT Tonnes Au g/T Au Ounces Ag g/T Ag Ounces
----------------------------------------------------------------------------
San Miguel 37,470,000 0.69 830,000 38.00 46,243,000
----------------------------------------------------------------------------
Sleeper 223,624,000 0.27 1,972,000 2.84 20,459,000
----------------------------------------------------------------------------
Total 2,802,000 66,702,000
----------------------------------------------------------------------------
For details on these resource estimates, please see the
following news releases: San Miguel Resource Estimate, September 5,
2012; and Sleeper Resource Estimate, July 30, 2012.
Note: Mineral resources that are not mineral reserves do not
have demonstrated economic viability.
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 Sleeper Gold Project
and the expected results of this work, estimates of resources for
the Sleeper and San Miguel projects including expected volumes and
grades and the economic projections included in the Sleeper
project's PEA. 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, 2012 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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