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Paramount Gold Hits Gold Target in Four of Five Drill Holes at Linda Property in Peru

Posted on: Wednesday, 9 August 2006, 18:00 CDT

Paramount Gold Mining Corp. (OTC:PGDP)(FWB:P6G) and its Peruvian subsidiary, Compania Minera Paramount SAC, are pleased to disclose the results of its first round of drilling on the Linda property, located in the Department of Ayacucho, South Peru. In October 2005, Paramount signed an agreement with Minera ABX Exploraciones S.A., a subsidiary of Barrick Gold Corporation (NYSE:ABX), to acquire a minimum of 51% interest in the property by completing 6,000 meters of drilling over a two year period.

Paramount recently completed five holes totalling 1,139 metres in order to test a geochemical anomaly measuring 700 m x 500 m where the arithmetic average of 263 surface samples with gold values greater than 300 ppb Au (0.3 g/t) which equals 0.93 g/t Au. Geophysical work conducted last year had detected a low to moderate high resistivity anomaly superimposed over the geochemical one. Four of the five holes drilled on the property returned grades that are within the range of the target sought by Paramount with the best value being 2.75 g/t Au over 12.70 m in hole LI-06-03. Paramount's target at Linda is a low grade (around 1 g/t Au) bulk tonnage (+100 million tonnes) disseminated gold deposit, comparable in grade to other producers in Peru, such as Newmont's 30 million oz. Yanacocha mine that averages 0.9 g/t Au, Barrick's 7 million oz Alto Chicama mine that averages 1.4 g/t Au and, Aruntani mine (1.5 M oz Au) with head grades of 1 g/t Au.

Alain Vachon, exploration manager for Paramount in South America quoted: "We are very encouraged with the results of the first round of drilling on Linda. The intercept in hole LI-06-03 proves that the mineralized system can generate above usual grades for typical open pit operations. Now we have to focus on features such as alteration and structure that directly control the location of the mineralization. Detailed spectrometer work will be conducted on core and surface samples in order to determine if some zoning of key alteration minerals could be used as vector in order to orientate our next drilling phase. We are also very happy that hole LI-06-05 cut gold mineralization 500 m north west of the known limit of the surface mineralization. Even though the gold zone is low grade and capped by 200 m of barren volcanic rocks, it demonstrated that our geological interpretation was right and that the system is more extensive than originally thought. After having done the spectrometer work, and if the results are positive, some complementary geophysics outside of the actual grid will be proposed along with another round of drilling." Details of the 5 holes are in the table below: Drill Hole Azimuth Dip Length Result (from to: core length) LI-06-01: 045 degrees -45 degrees 250.00 19.70 to 26.05: 6.35m @ 1.22 g/t Au LI-06-02: 045 degrees -45 degrees 201.30 Nil LI-06-03 : 225 degrees -55 degrees 202.35 2.70 to 15.40 : 12.70m @ 2.75 g/t Au LI-06-04 : 045 degrees -50 degrees 236.90 16.45 to 20.50 : 4.05m @ 1.59 g/t Au LI-06-05 : 045 degrees -45 degrees 250.00 225.00 to 247.80 : 22.80m @ 0.25 g/t Au

Gold mineralization is associated to iron oxide (limonite-goethite), jarosite and dark silica alteration within brecciated limestone.

The quality control program for the 2006 drilling campaign is under the supervision of Alain Vachon, P.Eng. Geologist and Exploration Manager for Compania Minera Paramount in Peru, a qualified person as defined by Canadian National Instrument 43-101. Drilling was performed by Bradley-MDH of Lima. HQ core samples were first sawed in two equal parts and then sent to ASL Chemex in Lima, a certified and recognized laboratory for the Canadian Authorities where they were crushed, pulverized and assayed. Gold was analysed via neutronic activation fire assay finish with a limit of detection of 5 ppb.

About the Linda Property

The property is comprised of six mining concessions totalling 4,500 hectares in an area currently being explored by several junior and major companies.

Previous work carried out on the Property led to the discovery of a kilometric low grade gold system within Cretaceous sedimentary rocks including more particularly limestone and calcareous siltstone. In Paramount's view, the system may be suitable for hosting a low grade, large tonnage heap leached deposit.

Previously detailed sampling conducted by ABX and Horschild (chip and channel) was completed over an area covering approximately 1.5 km x 1.0 km. A total of 928 surface samples were been collected, of which 263 (28%) returned gold values greater than 300 ppb (0.3 g/t) Au, including 169 with values greater than 500 (0.5 g/t) and, 59 with values greater than 1000 ppb (1 g/t) Au. Of note, the arithmetic average of these 263 samples stands at 0.93 g/t Au. Paramount believes that this value compares very well with head grades of several large gold mines in Peru. A very limited drill program consisting of eight shallow holes was completed on the property in 1999: four holes cut oxide gold mineralization with a high value of 1.5 g/t Au over 26 m in hole # 4.

About Paramount Gold

Paramount Gold Mining Corp. is a precious metals exploration and development company. It is management's objective to grow Paramount into a significant gold and precious metals producer by developing the San Miguel and Linda projects in Mexico and Peru, and by acquiring other advanced-stage projects and/or producing mines in the most prolific precious metal districts in the world. The Company trades on the OTC market under the symbol "PGDP" and on the Frankfurt Exchange under the symbol "P6G". 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.

Source: Business Wire

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