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Paramount Gold Further Progresses the Linda Property, Peru Towards a Drill Ready Stage

Posted on: Wednesday, 14 December 2005, 09:00 CST

Paramount Gold Mining Corp. (OTC:PGDP) and its Peruvian subsidiary, Compania Minera Paramount SAC, have started an Induced Polarization (IP) survey and are pleased to announce initial results from a comprehensive work program underway on the Linda property, located in the Department of Ayacucho, South Peru. Paramount recently signed a Letter of Intent on the Linda property with Minera ABX Exploraciones S.A. ("Minera ABX"), a subsidiary of Barrick Gold Corporation (NYSE:ABX), to acquire a minimum 51% interest in the property by completing 6,000 meters of drilling.

A crew composed of six persons, including two geologists under the guidance of Alain Vachon, are currently completing a detailed geological survey and sampling program within and outside the gold anomalous zones previously delineated by Minera ABX-Horchild-North.

Paramount's target at Linda is a low grade (around 1 g/t Au) bulk tonnage (100 to several 100 million tonnes) disseminated gold deposit, similar in grade to other producers in Peru, such as Newmont's 30 million oz. Yanacocha mine that averages 0.9 g/t Au or Aruntani mine (1.5 M oz Au) with head grades of 1 g/t Au.

In the current program, 90 samples have been collected and the results show 28% with values greater than 300 ppb gold, indicating that the mineralization is associated to NW trending silicified structures coinciding with fold axis affecting the limestone and, some silicified breccia developed at the intersection of these structures with EW trending ones. Each sample was taken as a 1 to 4 meter channel or composite sample over an area of 5 x 5 meters: 10% of the samples have returned values greater than 1 g/t Au with a high of 2.9 g/t Au. Mineralization is composed of oxide (limonite-goethite-hematite), silica and no sulphides are visible.

The current results compare very well with previous work done on the property and move Paramount closer towards its goal, of commencing a drilling program in early 2006. Paramount is currently in the process of preparing all required permits to fulfill this objective.

Commenting on the status of the work program, Mr. Alain Vachon, Manager of Exploration for Paramount Gold, South America, stated, "We are very encouraged with these preliminary results as we now have a better understanding of the nature and the control of the mineralization on Linda. Structural framework, silicification and some decarbonatization are the main factors controlling the oxide-type mineralization. We are doing some geophysics (3-Dimensional IP) covering the mineralized system (1.5 x 1.5 km) in order to identify not only the horizontal extension, but also to investigate the source at depth of these mineralized structures."

About the Linda Property

The property is comprised of six mining concessions totaling 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 was completed in 1999, consisting of eight shallow holes on the property: Four holes cut oxide gold mineralization with a high value of 1.5 g/t Au over 26 m in hole # four.

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. For more information, please visit the Company's web site at: www.paramountgold.com (now available in both English and German).

The quality control program for the 2005 program is under the supervision of Alain Vachon, P.Eng. Geologist and Exploration Manager for Minera Parmount in Peru, a qualified person as defined by Canadian National Instrument 43-101. All samples were crushed, pulverized and assayed at ASL Chemex in Lima, a certified and recognized laboratory for the Canadien Authorities. Gold was analysed via FA neutronic activation finish with a limit of detection of 5 ppb while all other elements were detected via ICP.

Source: Business Wire

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