Name and Location
San Miguel gold and silver project, Chihuahua, Mexico.

Client
Paramount Gold & Silver Corporation.

Project Description
A preliminary economic assessment (PEA) on the San Miguel project has concluded that the project represents an “unusually robust economic opportunity to develop a low-cost mine in the prolific Sierra Madre belt, in Mexico”.

The PEA proposes a 4 000 t/d mill and agitated cyanide leaching in tanks, fed by openpits and underground mines, resulting in a projected 14-year operation, with a total metal production of 803 000 oz of gold and 43.2-million ounces of silver.

Individual openpit mines will be developed as satellite production operations, with haul trucks transporting the mineralised material to the process site. A main electrical power line and power centre will be developed at the process facility, with individual power lines going to the underground mining operations at Don Ese, San Miguel and La Union.

Each underground mining operation will have separate infrastructure, including offices, a warehouse, an equipment shop, a change house, and a shotcrete and cemented fill plant, as well as an explosives and fuel storage facility.

Underground mines will have separate ventilation and dewatering systems because of their remote location from each other. Access and haul roads will be developed for each mining operation.

Projected life-of-mine average cash operating costs are $512/oz of equivalent gold recovered. The total cost of production, including cash operating costs and total capital and contingency costs over the life of the mine, is estimated at $842/oz of gold equivalent.

San Miguel has an estimated $1.1-billion pretax net cash flow, a $707-million pretax net present value at a 5% discount rate and a highly accretive internal rate of return of 33.2%.

Value
The start-up capital costs, including working capital, are estimated at $243-million.

Duration
The mine is expected to begin production in 2017.

Latest Developments
Paramount plans to conduct a feasibility study in mid-2014.

Key Contracts and Suppliers
Metal Mining Consultants (PEA).

On Budget and on Time?
Not stated.

Contact Details for Project Information
Paramount Gold & Silver Corporation investor relations, Christos Theodossiou, tel +1 866 481 2233 or
email ctheo@paramountgold.com.
Metal Mining Consultants, tel +1 720 348 1646 or fax +1 303 790 1872.