Nov 8 2010
Paramount Gold (NYSE Amex:PZG)(TSX:PZG)(FRANKFURT:WKN:A0HGKQ) announced today that exploration drilling has confirmed the potential for a significant expansion of resources at the Veronica target at Paramount Gold`s 100% owned San Miguel Project in the Palmarejo District of northwest Mexico.
La Veronica is a vein deposit analogous to Coeur d'Alene`s nearby Palmarejo Mine which has a defined reserve totalling 90.5 million ounces of silver and 1.04 million ounces of gold. La Veronica varies in width from 4 meters to 25 meters and sits within a northwest trending, sheared contact zone between felsic tuff and andesite. Mineralization focused in this sheared contact zone is accompanied by breccia, quartz veins and intrusive rock.
In previous programs, the La Veronica vein system was successfully drill tested at shallow depths over a strike length of 1,800 meters, generating a small initial resource. The target remained open on strike and down dip. New drilling has confirmed part of the down dip and north strike extensions. The potential target size has therefore been increased to 300,000 to 500,000 ounces of gold and 25 million to 30 million ounces of silver. The current drill program has been designed to test this potential for possible inclusion in a new resource estimate.
Although these initial results are believed to approximate true width, additional drilling will be required to fully establish true widths in all intervals. Vertical zonation of silver and gold is common in this target style and these results are therefore being pursued at depth in the current program to determine if higher gold concentrations are present.
Paramount owns a 100% interest in the 188,000 hectare (465,000 acre) San Miguel Project in the Palmarejo District of northwest Mexico, making it the largest claim holder in this rapidly growing precious metals mining camp. Ongoing exploration at San Miguel continues to develop new targets for drill testing. Four new targets are expected to be drilled in the first quarter of 2011. Resource delineation drilling has meanwhile been focused on the San Francisco, Veronica, Monte Cristo, and San Miguel Vein targets. Results from the resource delineation drilling will be incorporated into a new National Instrument 43-101 compliant resource estimate expected in the first quarter of 2011.
Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel under the supervision of Bill Threlkeld, a Qualified Person as defined by National Instrument 43-101. An ongoing and rigorous quality control/quality assurance protocol is being employed during 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, Vancouver, B.C., using fire assay atomic adsorption methods for gold and aqua regia digestion ICP methods for other elements.