Paramount Gold and Silver Corp. (NYSE
MKT:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") today
reported additional positive results from two core holes recently
drilled to test the depth extension of the Don Ese vein structure
on its 100%-owned San Miguel Project in northern Mexico.
The Don Ese vein strikes north-northwest directly towards the
nearby Palmarejo Mine owned by Coeur Mining, Inc. and appears to be
an extension of the structure which hosts this highly successful
gold-silver producer and its satellite Guadalupe mine, which is
less than 1,000 meters from Don Ese. 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 the Palmarejo and Guadalupe mines. The Don Ese mineralized
vein has been traced by core drilling for nearly 1,000 meters along
strike and remains open down dip.
DS-13-033 and DS-13-034 were drilled to test the North and
Central parts of the Don Ese vein at depth. Results confirm that
high-grade mineralization continues and the lower limit of the Don
Ese deposit remains unknown. To date, five new holes have been
drilled into this target; the data from these holes was not
included in the most recent resource estimation which was used in
the Preliminary Economic Assessment (PEA) completed earlier this
year (see Feb. 28, 2013 news release). The most recent resource
estimation, prepared by Mine Development Associates (MDA,
www.mda.com) of Reno, Nevada in September, 2012, incorporated 650
meters of down dip mineralization for Don Ese. The five holes
drilled subsequently could extend the resource model an additional
130 meters down dip, which would increase the size of the
resource.
The following table reports results from all five holes drilled
into the Don Ese depth extension subsequent to the latest resource
estimation, including holes DS -13-033 and DS-13-034 reported
today.
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Hole # Area Total
Length From To Width Au Ag
(m) (m) (m) (m) g/T g/T
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DS-13-030(i) DON ESE 524.4 433.60 438.40 4.80 0.082 9.95
442.35 492.90 50.55 1.325 150.00
Including 451.55 458.10 6.55 2.469 314.67
Including 467.80 487.15 19.35 2.300 245.80
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DS-13-031(i) DON ESE 683 586.80 591.40 4.60 1.31 21.660
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DS-13-032(i) DON ESE 621.95 515.75 538.25 22.50 3.16 44.340
including 527.10 530.05 2.95 14.180 96.15
including 527.10 527.95 0.85 42.500 186.00
including 535.55 538.25 2.30 6.560 113.97
including 535.95 536.55 0.60 17.000 125.00
541.15 543.90 2.75 0.370 18.78
555.90 556.40 0.50 2.340 13.10
579.45 579.95 0.50 1.068 14.30
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DS-13-033 DON ESE 634.20 522.80 523.35 0.55 1.075 816.00
537.95 538.70 0.75 0.678 136.00
544.30 546.70 2.40 0.694 74.43
552.15 553.15 1.00 1.147 38.10
561.55 563.70 2.15 0.481 23.91
576.55 585.95 9.40 0.562 52.33
Including 580.00 582.35 2.35 1.286 87.53
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DS-13-034 DON ESE 643.20 573.80 592.75 18.95 0.890 111.77
Including 588.10 591.20 3.10 2.400 183.45
607.05 609.40 2.35 1.740 36.67
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(i)Previously reported Drill hole. True widths are expected to
approximate at least 70% of reported intercepts.
Paramount CEO Christopher Crupi commented: "Don Ese continues to
demonstrate excellent grade and continuity at depth and along
strike, making it a very good prospect for underground production
similar to Coeur Mining. Further depth extensions of the resource
should now wait for exploitation which would facilitate drilling
from underground."
A figure is available at the following address:
http://media3.marketwire.com/docs/PZZ_08202013.jpg.
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.
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 20,450,000
----------------------------------------------------------------------------
Total 2,802,000 66,693,000
----------------------------------------------------------------------------
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.
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, estimates of resources
including expected volumes and grades and the economic projections
included in the 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 Christopher Crupi, CEO 866-481-2233
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