Drilling Commences To Find Second Sleeper Mine

WINNEMUCCA, NV - Paramount Gold and Silver Corp. reported that it has completed staking and filing 920 new lode mining claims adjacent to the west, and immediately south, of the Company`s 100%-owned Sleeper Gold Project. The new Mimi claims, totaling 18,400 acres, cover exciting new geophysical targets developed by Paramount in consultation with Jim Wright, a geophysicist with more than 35 years of successful work on Nevada gold projects.  Drilling on the new claims has begun.

The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca.  Acquired by Paramount in 2010, the project area includes the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as staked and purchased lands now totaling 2,570 claims and covering about 47,500 acres which stretch south down trend to Newmont`s Sandman project. This acquisition is consistent with the Company's strategy of district-scale exploration near infrastructure in established mining camps.

Paramount acquired Sleeper to pursue two opportunities:

(1) Potential to define and exploit previously unrecognized resources in the vicinity of the original mine. Paramount expects to release results of an NI 43-101-compliant Preliminary Economic Assessment (PEA) for this opportunity in July, 2012.

(2) Potential to find other high grade deposits similar to Sleeper using the mine`s extensive data base.  Paramount`s exploration emphasis has now shifted to this opportunity.

The new Mimi claims were staked following an intensive review of data assembled from AMAX Mining and Placer Dome sources, Paramount's predecessor at Sleeper (X-Cal Resources) and ICN Resources from whom Paramount purchased the Dunes properties in 2011. Structural and lithological interpretations were made based on a detailed understanding of Sleeper geology, its structural setting and ore controls. Following the staking, Paramount completed a detailed gravity survey to locate favorable rocks, define their approximate depth and identify key structural information. Highly prospective geophysical targets were found along a 17 km. (10 mile) long corridor south of the Sleeper Mine towards the Sandman deposit (see map below). Preliminary surface sampling has found anomalous gold values corresponding to the gravity anomalies. Paramount believes this corridor represents a favorable structural setting with excellent potential for finding a new deposit.

Paramount's CEO Christopher Crupi commented that "the Sleeper stands out as one of the very few Nevada producers to mine out its original reserve without adding to it. We believe that a major opportunity was missed to use the wealth of data from Sleeper and established technologies to find similar deposits in the area. We are very excited to begin drilling the targets on the Mimi claims. We have also started to follow up last year`s success around the Sleeper pit where we plan to drill the Bedrock Casino, recently-discovered PAD zone, South Sleeper and other new targets. Our initial program is for 7,000 meters (23,000 feet) using two rigs."