Resource World Magazine

MINI NG Paramount Gold & Silver, a company to watch by Vanessa MacLean With a name that makes the property sound like scarcely more than an underdog, the Sleeper Gold Project operated by Paramount Gold & Silver [PZG-TSX, NYSE MKT] couldn't be more misnamed. The project, an advanced-stage precious metals venture in Nevada, has recently released drill results highlighting 1.04 g/t gold (Au) and 13.1 g/t silver (Ag) over 161.5 metres, including 6.01 g/t gold and 96.3 g/t silver over 10.7 metres. Sleeper is located 25 miles from the town of Winnemucca, in Humboldt County, Nevada. It was acquired by Paramount in 2010 incorporating both the original Sleeper high-grade open pit mine as well as stakes and purchased lands totalling 2,570 claims covering 47,500 acres. The original mine operated for 10 years and was shut down in the mid 90s when gold prices dropped. The indicated resource is 5.5 million ounces of gold in the ground plus an additional silver credit. The preliminary economic assessment (PEA) reported that the Sleeper Project is expected to have a 17-year mine life producing 17,000 ounces of gold and 263,000 ounces of silver per year. The cap-ex is expected be $340 million with an average operating cost of $767/oz Au equivalent with an IRR of 25% measured at $1,400/oz gold. The company plans on pursuing two goals on the property: to define and exploit undiscovered resources in the vicinity of the original mine and to utilize the mine's extensive data base to find other high-grade deposits. Exploration plans executed in 2012, in pursuit of these goals, included a 65 drill hole program on the original Sleeper Mine waste dumps, development of mineral/ geological models for target areas on the property, interpretation of available geophysical data as well as administration of additional geophysical surveying, an RC drill program and rock sampling on the newly staked claims. 44 www.resourceworld.com Drilling at the Sleeper Gold Projects West Wood Zone, overlooking the pit. Photo courtesy of Paramount Gold & Silver. Paramount is also working on their San Miguel Project in Mexico which is in the vicinity of the Palmarejo Mine, one of the world's highest quality, silver-gold mines, operated by Coeur d'Alene Mines Corp. The area also has six new operating mines and is gaining a lot of investor interest. San Miguel is 100% owned by Paramount and consists of over 40 concessions covering over 142,000 hectares. The company recently released a preliminary economic assessment on the project, which showed that the average grade of the deposit was 3.47 grams per tonne. The mine is expected to have a 14-year mine life, with an initial cap-ex estimated at $230 million. This is an attractive number for a milling operated deposit that is expected to produce 57,000 ounces of gold per year and 3 million ounces of silver. In 2012, Paramount completed a successful drill program on the San Miguel property which has extended the known mineralized zone and uncovered some exceptional gold intercepts and will be used to create an updated NI 43-101 compliant report in 2013. The San Miguel estimated resource now equates to 1.53 million indicated gold equivalent ounces, and 1.60 million inferred gold equivalent ounces. The net present value of Paramount exceeds $707 million, which is more than double the company's current market cap of $290 million, suggesting that the stock, which is currently trading at $2.04/share, is severely undervalued. In a market that is so tough on juniors these days, Paramount appears able to weather the storm. The company has approximately $18 million in cash and equivalents which will carry them through the next two years, placing them in an advantageous position in comparison to many other mineral exploration companies. The two projects, Sleeper and San Miguel are expected to generate substantial additional value for shareholders. n M AY 2 0 1 3

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