Paramount Gold and Silver Reports Favorable Gold Recoveries From Bio-Oxidation of High Grade Material From Sleeper Deposit,

Paramount Gold and Silver Reports Favorable Gold Recoveries From Bio-Oxidation 
of High Grade Material From Sleeper Deposit, Nevada 
Only 8 Days of Bio-Oxidation Achieves 91.5 % Average Recovery From
West Wood Area 
WINNEMUCCA, NEVADA -- (Marketwired) -- 01/22/14 -- Paramount Gold and
("Paramount") announced today that a successful preliminary
bio-oxidation test of the high grade sulfide material from the West
Wood area of Paramount's 100%-owned Sleeper Gold Project indicates
that this high grade resource could be included in a revised
Preliminary Economic Assessment (PEA). Resources from West Wood were
not included in the original 2012 PEA because of poor expected
recoveries from the heap leach operation proposed for Sleeper in the
Paramount CEO Christopher Crupi confirmed that the bio-ox test
results "could have a major impact on the economics of the Sleeper
Project. West Wood contains the highest grade material at the
project, is close to the processing facilities and has a favourable
strip ratio. Getting this resource into the economic model has been a
high priority for us since completing the PEA." 
West Wood 
The West Wood area is on the south west side of the Sleeper deposit
and consists of stock work, breccia and disseminated mineralization
of exceptional gold and silver grades. For example, last year's
drilling returned up to 35 meters grading 2.49 g/T of gold and 14.7
g/T of silver. Cyanide leach tests of the sulfide-rich West Wood
mineralization showed poor amenability to heap leaching and this
material was therefore not incorporated in the PEA mine plan. Further
work tested several alternative recovery methods, with the
bio-oxidation process providing the most promising and cost effective
New Bio-Ox Testing 
A bio-oxidation test on West Wood material was supervised by
McClelland Laboratories of Reno, Nevada. The aim was to achieve a
partial oxidation of the sulfides using industry-standard bacteria
and a subsequent cyanide leach. Initial oxidation testing was
conducted on a 45 micron crush size for 21 days continuously.
Portions of the sample material were then subjected to cyanide
leaching after 5 days, 7-8 days and 21 days of bio-ox treatment. The
samples tested returned excellent gold recoveries averaging 91.5%
after partial oxidation for just 7-8 days.  
Paramount is now conducting multiple column tests at various crush
sizes to further evaluate gold recoveries and grind size optimization
in a heap leach process. Successful completion of these tests should
allow the West Wood material to be incorporated into the project's
resources and mine plan. An updated NI 43-101 resource estimate is
scheduled for the first quarter of this year. 

               Amenability   Calculated    Oxidation  Oxidation         Au
                      test   Head Grade         Time      state   Recovery
Sample                   #       Au g/T         days          %          %
WWS-13-1          Baseline         3.24            0        0.0       36.1
WWS 13-1             AM-14         3.76            5        1.7       81.3
WWS-13-1              AM-1         3.58            8       53.3       94.3
WWS-13-1              AM-2         3.46           21       79.5       96.0
WWS-13-2          Baseline         1.29            0        0.0       30.2
WWS 13-2             AM-13         1.31            5        2.6       62.1
WWS-13-2              AM-5         1.20            7       60.8       88.7
WWS-13-2              AM-6         1.33           21       78.6       91.1

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%. At lower metal
prices, Sleeper still shows excellent economic performance. At
US$1,200 gold and US$20 silver, the estimated total pre-tax net cash
flow equals US$603 million and the net present value at a 5% discount
rate is a healthy $295 million with an internal rate of return of
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,
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 metallurgical test work and drilling results,
future 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.
Paramount Gold and Silver Corp.
Glen Van Treek
VP Exploration
Paramount Gold and Silver Corp.
Chris Theodossiou
Investor Relations
Press spacebar to pause and continue. Press esc to stop.