Paramount Gold and Silver Secures Critical Water Rights for

Paramount Gold and Silver Secures Critical Water Rights for Its
100%-Own San Miguel Project in Mexico 
WINNEMUCCA, NEVADA -- (Marketwire) -- 11/01/12 -- Paramount Gold and
Silver Corp. (NYSE MKT:PZG)(NYSE
Amex:PZG)(TSX:PZG)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") today
announced it has received final confirmation from CONAGUA, a division
of SERMANAT, Mexico's Environmental and Natural Resources Ministry,
granting Paramount permanent rights to 995,000 cubic meters of water
per year for its San Miguel Project, equivalent to 31.6 liters per
second. Paramount conducted pumping tests to determine that this
extraction rate would not affect phreatic levels in the surrounding
Paramount believes that these new water rights should be sufficient
to support the processing required for either a milling/flotation or
milling/cyanide leaching scenario of up to 5,500 tonnes of ore per
day which is comparable in size to the neighboring Palmarejo mine
owned by Coeur d`Alene Mines Corporation. Recent metallurgical test
work conducted by McClelland Laboratories
( of Reno, Nevada proposed that
milling/flotation and milling/cyanide leaching processes were likely
the most economic alternatives for San Miguel mineralization (see
news release of October 22, 2012). 
Preliminary water needs will be defined during the Preliminary
Economic Assessment (PEA) of the San Miguel Project being led by the
Scott E. Wilson consulting group, which is expected to be completed
in December, 2012. Paramount is developing an exploration program to
define additional water resources for the area to ensure that there
are sufficient supplies for a larger operation or to support
alternative extraction processes currently being evaluated by
Paramount's consultants. 
Paramount CEO, Christopher Crupi commented that "we are continuing to
de-risk San Miguel step-by-step to ensure that we can answer all the
key questions which would be asked by a prospective partner or
acquirer. Water rights are a very important asset required for an
eventual production decision and we have acted preemptively to ensure
that these rights are available to the project in sufficient
quantities for a sizeable operation." 
About Paramount  
Paramount 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
The 100%-owned 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 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.  

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               60,693,000

Cautionary Note to U.S. Investors Regarding 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
future exploration work at the San Miguel Project and the expected
results of this work, estimates of resources including expected
volumes and grades, the anticipated completion of a PEA and estimates
as to both the needs and availability of water for a mining project
which could be constructed at San Miguel. 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. 
Paramount Gold and Silver Corp.
Christopher Crupi, CEO
Chris Theodossiou, Investor Relations
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