Paramount Gold Reports NI 43-101 Technical Report; A Preliminary Resource Estimate at Their San Miguel Project, Mexico
Friday January 26, 1:00 am ET
CHIHUAHUA, Mexico--(BUSINESS WIRE)--Paramount Gold Mining Corp. (OTC:PGDP - News; Frankfurt:P6G, WKN:A0HGKQ), is pleased to report the results of an NI 43-101 technical report completed on their San Miguel Project near Temoris, Chihuahua, Mexico. The report was completed by Dana Durgin of Delve Consultants LLC., Sparks, Nevada, USA.
The results of the report are based on only 39 of the 53 shallow drill holes completed to date and have only considered higher grade ore as an inferred resource that could potentially be mined by underground methods. The drill holes used to compile this report are widely spaced and primarily test only the upper 100 meters of the vein system. Paramount is confident that they can continue to increase their resource, both down dip and along strike, as well as between the targets tested initially.
Chris Crupi, President and CFO stated: "I am very pleased with the progress our exploration team has made at San Miguel, Mexico. At the time of this report, our exploration expenditures were roughly US$2,500,000 and we identified 38,000,000 ounces of silver equivalent. This gives us a very low finding cost of less than US$0.07 per ounce of silver. I am very confident that we can continue to add substantial silver resources and eventually reserves, at a very low cost, which will dramatically increase shareholder value."
San Miguel - Report Highlights
Mineralization at San Miguel is controlled primarily by the 8-kilometer long, NNW trending Guazapares fault zone. Within this fault zone, which may be up to 300 meters wide, a series of en echelon, and to a lesser extent sub-parallel, quartz veins have developed. Each of these en echelon veins has a strike length of 250 to 400 meters, and an unknown down-dip extent. Drilling at San Miguel at the date of this report includes 47 drill holes irregularly distributed along 2.7 kilometers of this strike length. Six additional holes are in the La Blanca and Montecristo zones to the north, which are not considered here.
Only 39 of these 47 holes were used in the resource calculation. Of the other eight holes, six are in the southern part of La Union, where there was no significant resource identified. The remaining two holes were considered too isolated to include in the calculations. Drilling has not yet been done on a regularly spaced grid. The abundance and spacing of drilling in any given area is insufficient at this time to produce a rigorous resource calculation.
This resource estimate was done manually, using vertical cross sections drawn perpendicular to the strike of the principal vein in each zone. Mineralization is polymetallic with silver, gold, lead and zinc contributing to the dollar value. The boundaries were defined by using current metal prices (Au @ $600/oz, Ag @ $13/oz, Pb @ $0.65/pound, Zn @ $2.00/pound) to calculate a gold-equivalent dollar value. Boundaries were arbitrarily drawn at a $50 metal value cut-off, which was chosen as a simply defined, consistent method to define these boundaries.
The San Miguel resource is only in the early stages of definition, with the bulk of the resource so far relating to the near surface drill results in the San Antonio and El Carman zones where assay results remain incomplete.
The inferred resource is calculated to be 4.8 million metric tones, grading the US dollar equivalent of 246.6 grams of silver per tonne, or 38 million ounces of silver as shown in the table below:
Table 17.6 San Miguel Inferred Resource Summary
Area # holes Tonnes Ag eq Grade Ag eq Oz
La Union 9 675,000 244.6 g/t 5,307,700
San Jose 10 1,010,000 234.5 g/t 7,615,400
San Luis
Below 300 ft 7 155,400 513.6 g/t 2,566,200
Above 300 ft 1 150,000 430.7 g/t 2,076,900
San Antonio(a) 6 1,510,000 236.8 g/t 11,499,200
El Carmen(a) 6 1,300,000 215.3 g/t 9,000,000
Totals 39 4,800,400 246.6 g/t 38,065,400 Ag eq oz
(a) Drilling at San Antonio and El Carmen are ongoing and assay results are incomplete. These figures will be refined in February 2007 when all assay data are complete.
Resource Potential - Report Highlights
Approximately 1800 meters of trenching has been completed in 34 trenches. Most of these exposed excellent mineralization for sampling and geologic mapping. In addition, grid-based rock sampling over a large area in the San Jose zone indicated the presence of zone, of at least 150 by 250 meters that averaged 150 g/t silver. This suggests that Paramount may be able to develop a mineable near surface silver/gold body that may be amenable to heap leaching, in addition to polymetallic mineralization which may be mineable underground. This is not included in the resource noted above.
Ongoing exploration is expected to add to the resources in areas not considered in this estimation. Few of the drill holes have reached more than 120 meters below the surface. Drilling below these depths is expected to add to mineral resources. In precious metal systems like this, such as at nearby Palmarejo, ore shoots are known to persist to depths of 300 meters or more down dip.
In addition, the resources described in this report remain open along strike to the NNW and SSE, as well as down dip. The ongoing San Miguel drilling program has tested only 2.7 kilometers of the 8-kilometer strike length of the system with rather widely spaced holes. Also, the San Miguel vein system in a parallel fault zone two kilometers to the west has excellent silver/gold mineralization at the surface, but has not yet been drilled. Additional drilling is clearly warranted in these highly prospective areas.
Background Comment
Paramount initiated diamond core drilling in April 2006, using Layne de Mexico as the contractor. As of early December 2006, a total of 7233 meters of HQ (2.5 inch core) drilling had been completed in 53 drill holes. All drill, trench and surface samples were analyzed by ALS Chemex.
Most of the intercepts in both trenching and drilling in the La Union South zone had significantly higher than normal zinc and lead values (in the 1-2% zinc range), including one 13.5 meter interval in hole LU-11 containing 2.38 % lead and 7.07% zinc. At today's metal prices, that material has a gross metal value of nearly $300 per ton, without including precious metals. The relative abundance of lead and zinc leads the author to believe that the erosion level in this portion of the Gauzapares district is deeper than the areas further north, such as San Antonio.
The resources defined in this report, are correctly classified as Inferred Resources due to the level of check arraying, the spacing of drill holes, and the preliminary stage of the deposit modeling and estimation process. The classification of these resources as Inferred indicates that the resources have been estimated on the basis of geological evidence and reasonably assumed, not verified, geological and grade continuity. While it cannot be assumed that all of the Inferred Resources noted here will be upgraded to Indicated or Measured Resources, the author believes that improvements in the drill hole spacing, the deposit modeling and the estimation procedures will lead to conversion of at least a significant portion of these resources to higher classifications.
The complete NI 43-101 report can be viewed or downloaded at Paramount's website (www.paramountgold.com) or www.sedar.com.
Qualified Person
The report was written in compliance with disclosure and reporting requirements set forth in the Canadian Securities Administrators' National Instrument 43-101, Companion Policy 43-101CP, and Form 43-101F1. The resource estimate for the San Miguel deposits were prepared by Dana Durgin in December 2006 of Delve Consultants LLC. Mineral Exploration and Development, Sparks, Nevada, USA ; no mineral reserves were estimated. Mr. Durgin (the author) is a qualified person under Canadian Securities Aministrators' National Instrument 43-101 and a member of the American Institute of Professional Geologists (CPG #10364), a Registered Professional Geologist in Wyoming (PG-2886), and a member of the Geological Society of Nevada. The author has independently investigated the data provided to him by Paramount Gold Mining Corp., to the extent deemed necessary in his professional judgment to be able to reasonably rely on this information.
About San Miguel
San Miguel is currently comprised of 16 concessions covering an estimated 6 kms strike of silver and gold mineralization. It is located in Chihuahua, Mexico and lies in the Guazapares mining district, part of the gold-silver belt of the Sierra Madre Occidental. Paramount signed an agreement in August 2005 with Amermin S.A. de CV, a subsidiary of Tara Gold Resources, to acquire a 70% interest in the San Miguel project.
About Paramount Gold
Paramount Gold is a precious metals exploration company listed on the OTCBB under the symbol PGDP and on the Frankfurt stock exchange under the symbol P6G (WKN: A0HGKQ). The Company's objectives are to a) aggressively explore and develop the San Miguel project, located in Chihuahua, Mexico within the Sierra Madre Occidental gold/silver belt; and b) fully develop the potential of the strategic alliance with Teck Cominco for gold exploration in South America. For more information, please visit the Company's web site at: www.paramountgold.com (now available in the following languages: English, German, French, Spanish, and Mandarin).
Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
Contact:
Investor Relations
Skyline Communications, 613-226-9881
Toll-free: 1-866-481-2233
--------------------------------------------------------------------------------
Source: Paramount Gold Mining Corp.
