Paramount Gold to Acquire 100% of the Cotaruse Cu-Ag-Au Property in Southern Peru
Thursday February 1, 8:30 am ET
LIMA, Peru--(BUSINESS WIRE)--Paramount Gold Mining Corp. (OTC:PGDP - News; Frankfurt:P6G - News; WKN:A0HGKQ) and its Peruvian subsidiary, Compania Minera Paramount SAC, are pleased to announce that they have signed a Letter of Intent with a private owner to acquire a 100% interest in the Cotaruse property, located in the Department of Apurimac, Southern Peru.
The project consists of a 1,000 hectare mining concession with main infrastructures in place, including highway, electricity and water, which are readily accessible within 5 kms of the center of the property.
Alain Vachon, Manager of Exploration in South America commented, "We are very pleased to acquire the Cotaruse property, which has the potential to host a medium sized bulk tonnage open pit Cu + Ag +/-Au skarn deposit. Surface sampling to date shows average grades of greater than1% copper, 20 g/t Ag and 0.25 g/t Au. The property is ideally situated very close to major infrastructures including electricity and a highway. Helping matters is the fact that the locals in the area are well acquainted with and generally receptive to mining. We are currently conducting legal and technical due diligence that we expect will lead to the signing of a formal agreement in early March, at which point field work will commence."
Paramount Gold's due diligence thus far has identified four distinct mineralized areas on the property that could be forming one single mineralized zone, taking into account the effect of overburden cover and sparse sampling completed to date. Copper mineralization is primarily composed of Cu-oxide, chalcopyrite, malachite, chalcocite and azurite. The mineralization appears to be strongest nearest the granite contact, and weaker to the southwest closer to the core of the fold. Based on a compilation of 129 samples taken in 2004 by the previous owner and 24 samples collected by Paramount, the mineralized zones yielded the following average grades:
Zone 1 - The Northeast Zone; 2.56% Cu, 20 g/t Ag and 0.12 g/t Au
Zone 2 - The Southern Zone ; 1.15% Cu, 9.7 g/t Ag and 0.06 g/t Au
Zone 3 - The South Center Zone; 1.06% Cu, 5.7 g/t Ag and 0.095 g/t Au
Zone 4 - The West Zone; 0.35% Cu, 3.18 g/t Ag and 0.8 g/t Au
Cotaruse is located along the northern edge of the Inflection of Abancay where the volcanic rocks are host to an unprecedented amount of hydrothermal activity and mineralization within the district. The property lies at the north edge of the Selene - Explorador mining camp, which covers a crudely circular area measuring 22 kilometers in diameter. Several Au-Ag low and high sulphidation deposits are currently being mined in this area by Horschild, Orovega and Buenaventura. Considering the multitude of other veins and structures in the camp aside from the aforementioned, the amount of hydrothermal activity and the particular structural setting prevailing in this area, it can be said that the Cotaruse property has a very favorable metallogenical address.
The Cotaruse Project is mainly occupied by limestones of the Ferrobamba formation that form a tight nearly vertical anticline that is dominant across a kilometer in the center of the property. The limestones are intruded by some fresh granodiorite. Alteration is restricted to limestones and is observed as intense dark green diopside-garnet skarn development which is traced over a minimum distance of 1.2 kilometers in length, with widths exceeding 200 meters and between 250 to 400 meters of vertical extent.
In order to acquire a 100% interest, Paramount will pay the owner, Ing Miguel Picasso, an aggregate amount totaling US$3,000,000 and will incur exploration expenditures of US$2,000,000 over a period of 4 years. The first year's payment is US$150,000, followed by payments of US$750,000 in year two, US$800,000 at the end of year three and US$1,300,000 at the end of year four. The owner will also receive a 2.5% NSR of which 1.5% can be bought back at any time by Paramount for a lump sum payment of US$ 2,000,000.
Quality Control Person
Alain Vachon, P.Eng., Manger of Exploration, South America, is acting as the qualified person and has prepared the detail and review with respect to this news release.
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:
Paramount Gold Mining Corp.
Alain Vachon, 011 511 446 9062 (From Canada or US)
Manager of Exploration, South America
OR
Chris Halkai, Corporate Relations, 613-226-9881
Toll-free: 1-866-481-2233
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Source: Paramount Gold Mining Corp.
