Paramount CEO Christopher Crupi commented: "We have thought for some time that the Don Ese Vein would continue to depth and that widths and grades could increase. This new drill hole, along with additional drilling now in progress, demonstrates that the current resource is wide open to an unknown depth which we intend to define and integrate into an updated resource estimate later this year."
These new Don Ese results were not included in the database used for the robust San Miguel Preliminary Economic Assessment (PEA) released on February 28, 2013. Also not included in the PEA were results of recent drilling at the newly discovered La Bavisa vein (see press releases from May 22, 2012 and November 28, 2012), in the vicinity of Don Ese. "The reality is that San Miguel continues to grow quickly, outpacing our engineering work, and we are far from exhausting our list of highly prospective opportunities for resource expansion," Crupi said.
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%. At recent spot prices of $1600 gold and $33 silver, San Miguel's projected economics improve to $1.3 billion in pre-tax net cash flow, $893 million of net present value at a 5% discount rate and a 39.3% IRR. At recent metal price highs of $1,900 per ounce of gold and $36 for silver, the estimated NPV at a 5% discount rate rises to $1.166 billion with a 48.3% IRR. Note Mineral resources that are not mineral reserves do not have demonstrated economic viability. 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.
Additionally Paramount conducted a three drill hole program on La Tinaja a new vein target located south of Temoris town. Although drill holes LT-13-001 to LT-13-003 targeted gold mineralization found at surface drilling did not intersect significant gold and silver mineralization.
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.
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.
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