Paramount Defines Multi-Million Oz Resource at Sleeper, Nevada
Paramount Gold and Silver Corp. has released the results of a new NI 43-101-compliant resource estimate on its 100-per-cent-owned Sleeper gold project prepared by SRK Consulting, a well-recognized mining consulting firm. The Sleeper gold project is located off a main highway about 25 miles from the town of Winnemucca, Nev. Acquired by Paramount in 2010, the 45-square-mile project area includes the original Sleeper high-grade open-pit mine operated by Amax Gold from 1986 to 1996 as well as newly purchased claims (Paramount press release of Aug. 23, 2011) stretching south, downtrend to Newmont’s Sandman project.
The SRK resource estimate includes oxide and sulphide materials as well as a small amount of in-place mineralization described as alluvial. SRK estimates an in situ measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver, and an additional inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver using a cut-off grade of 0.20 gram of gold per tonne (g/t) for oxide and alluvial material, and 0.25 gram per tonne (g/t) for sulphide material. These cut-off grades were determined using a gold price of $1,100 per ounce, and recoveries of 85 per cent for sulphides and 70 per cent for oxides. An attached table summarizes SRK’s resource estimate.
SLEEPER RESOURCES
Measured
Material Cut-off
Au g/t Tonnes Au g/t Ag g/t Au oz Ag oz
Oxide 0.20 31,960,502 0.39 4.23 397,669 4,346,620
Sulphide 0.25 91,074,631 0.54 5.06 1,569,495 14,816,501
Total 123,035,133 0.50 4.84 1,967,164 19,163,121
Indicated
Material Cut-off Au
g/t Tonnes Au g/t Ag g/t Au oz Ag oz
Oxide 0.20 10,829,438 0.33 4.12 114,203 1,434,501
Sulphide 0.25 38,898,882 0.44 3.79 544,032 4,739,953
Total 49,728,320 0.41 3.86 658,235 6,174,454
Measured and indicated
Material Cut-off Au
g/t Tonnes Au g/t Ag g/t Au oz Ag oz
Oxide 0.20 42,789,940 0.37 4.20 511,872 5,781,121
Sulphide 0.25 129,973,513 0.51 4.68 2,113,527 19,556,454
Total 172,763,453 0.47 4.56 2,625,399 25,337,575
Inferred
Material Cut-off Au
g/t Tonnes Au g/t Ag g/t Au oz Ag oz
Alluvial 0.20 151,675 2.03 - 9,890 -
Oxide 0.20 13,191,635 0.32 3.42 136,145 1,450,516
Sulphide 0.25 68,410,857 0.44 3.07 974,376 6,752,446
Total 81,754,167 0.43 3.12 1,120,410 8,202,962
The resources are located in the West Wood, Facilities, Wood, Office and Sleeper zones encompassing a mineralized area over 2.0 kilometres long by 1.3 kilometres wide. The resource calculation does not incorporate potential above-ground inventory including mill tailings, waste dumps and leached ore which are the subject of continuing analysis. Also excluded are the results from drilling conducted after February, 2011. An updated resource estimate for Sleeper is scheduled for next year to incorporate data on the surface inventory and more recent drilling results.
Tetra Tech, a leading international mining consulting firm, has been engaged to prepare an NI 43-101-compliant preliminary economic assessment (PEA) of the Sleeper gold project for completion in early 2012. The current work program at Sleeper is consistent with Paramount’s strategy of expanding and upgrading known, large-scale precious metal occurrences in established mining camps, defining their economic potential and then partnering them with nearby producers. As a former high-grade gold producer, Sleeper is ideally located near established, low-cost production in Nevada, where the infrastructure already exists for early, cost-effective exploitation.
The Sleeper database used for SRK’s resource estimate includes more than 4,000 reverse circulation and core drill holes, as well as historical surface mapping and interpretations, to create a comprehensive lithological and structural model over the entire deposit. Additionally, data from more than 378,000 blast holes, collected while the project was in operation, were utilized to define trends, orientations and inclinations for the principal mineral zones. SRK employed Vulcan Software to vary the block sizes to as small as 2.5 by 2.5 by 2.5 metres to better control the limits of high-grade zones and avoid overestimation. Multiple search distances and orientation parameters were used for various grades and previously defined zones. Higher-grade zones were estimated using ordinary kriging (OK) with maximum search distances of 10 metres with an average of seven metres. Medium- and low-grade zones were also estimated with ordinary kriging using average maximum search distances of 48 metres for all domains, with the result that most of the resource falls within the measured and indicated category. Longer search distances were used for inferred material.
Christopher Crupi, chief executive officer of Paramount Gold, commented: “Sleeper is emerging as one of Nevada’s largest undeveloped gold resources. Its location, size and style of mineralization suggest that Sleeper could sustain a low-cost mining operation. Our next step is to complete a PEA within the first quarter of 2012 to establish the economic parameters for a mining operation. If the PEA is successful, we will move immediately toward a preliminary feasibility study which will enable us to report reserves. At the same time as we push ahead with the existing resource, we will focus on a series of promising new exploration targets which have emerged from the data.”
SRK RESOURCE ESTIMATE AT VARYING CUT-OFF GRADES
Measured oxide material
Cut-off Au g/t Measured
Tonnes Au g/t Ag g/t Au oz Ag oz
0.1 51,140,096 0.3 3.69 493,265 6,067,162
0.2 31,960,502 0.387 4.23 397,669 4,346,620
0.25 23,364,479 0.447 4.5 335,785 3,380,386
0.3 16,930,538 0.513 4.82 279,245 2,623,708
0.4 9,427,511 0.648 5.22 196,413 1,582,214
Indicated oxide material
Cut-off Au g/t Indicated
Tonnes Au g/t Ag g/t Au oz Ag oz
0.1 21,251,557 0.242 3.69 165,350 2,521,244
0.2 10,829,438 0.328 4.12 114,203 1,434,501
0.25 6,704,861 0.393 4.4 84,719 948,506
0.3 4,274,272 0.461 4.59 63,352 630,772
0.4 1,884,221 0.61 4.89 36,954 296,236
Measured and indicated oxide material
Cut-off Au g/t M&I
Tonnes Au g/t Ag g/t Au oz Ag oz
0.1 72,391,653 0.28 3.69 658,615 8,588,406
0.2 42,789,940 0.37 4.20 511,872 5,781,121
0.25 30,069,340 0.43 4.48 420,504 4,328,893
0.3 21,204,810 0.50 4.77 342,597 3,254,480
0.4 11,311,732 0.64 5.17 233,367 1,878,451
Measured sulphide material
Cut-off Au g/t Measured
Tonnes Au g/t Ag g/t Au oz Ag oz
0.2 115,476,605 0.47 4.77 1,744,977 17,709,655
0.25 91,074,631 0.536 5.06 1,569,495 14,816,501
0.3 71,695,288 0.606 5.34 1,396,886 12,309,193
0.4 45,695,936 0.755 5.7 1,109,232 8,374,332
0.5 30,760,064 0.905 5.97 895,022 5,904,176
0.6 21,703,611 1.055 6.22 736,177 4,340,304
Indicated sulphide material
Cut-off Au g/t Indicated
Tonnes Au g/t Ag g/t Au oz Ag oz
0.2 53,645,467 0.377 3.65 650,238 6,295,404
0.25 38,898,882 0.435 3.79 544,032 4,739,953
0.3 27,505,079 0.502 3.84 443,930 3,395,798
0.4 15,044,512 0.633 3.72 306,182 1,799,363
0.5 8,907,105 0.762 3.47 218,217 993,719
0.6 5,473,666 0.898 3.4 158,035 598,349
Measured and indicated sulphide material
Cut-off Au g/t M&I
Tonnes Au g/t Ag g/t Au oz Ag oz
0.2 169,122,072 0.44 4.41 2,395,214 24,005,059
0.25 129,973,513 0.51 4.68 2,113,527 19,556,454
0.3 99,200,367 0.58 4.92 1,840,816 15,704,991
0.4 60,740,448 0.72 5.21 1,415,414 10,173,694
0.5 39,667,169 0.87 5.41 1,113,239 6,897,895
0.6 27,177,277 1.02 5.65 894,212 4,938,653
Inferred oxide material
Cut-off Au g/t Inferred
Tonnes Au g/t Ag g/t Au oz Ag oz
0.1 29,635,200 0.225 3.18 214,382 3,029,931
0.2 13,191,635 0.321 3.42 136,145 1,450,516
0.25 8,053,980 0.384 3.71 99,435 960,688
0.3 4,724,427 0.466 4.06 70,784 616,699
0.4 2,049,919 0.631 3.41 41,588 224,744
Inferred sulphide material
Cut-off Au g/t Inferred
Tonnes Au g/t Ag g/t Au oz Ag oz
0.2 94,874,313 0.382 3.05 1,165,225 9,303,497
0.25 68,410,857 0.443 3.07 974,376 6,752,446
0.3 49,260,219 0.509 3.1 806,143 4,909,709
0.4 26,265,629 0.652 2.81 550,596 2,372,968
0.5 15,105,865 0.806 2.75 391,452 1,335,599
0.6 9,467,172 0.962 2.79 292,815 849,224
Inferred alluvial material
Cut-off Au g/t Inferred
Tonnes Au g/t Ag g/t Au oz Ag oz
0.1 156,140 1.975 9,915
0.2 151,675 2.03 9,890
0.25 150,281 2.045 9,881
0.3 148,215 2.07 9,864
0.4 134,889 2.24 9,715
Exploration activities at Sleeper were conducted by Paramount Gold under the supervision of Glen van Treek, exploration vice-president of the company, and Bill Threlkeld, a qualified person as defined by National Instrument 43-101, who have reviewed and approved this press release. This release was also reviewed and approved by SRK’s George Even, a qualified person responsible for the resource estimation. A continuing quality control/quality assurance protocol was employed during the program including blank, duplicate and reference standards in every batch of assays. Samples were assayed at ALS Chemex, Reno, Nev., using fire-assay atomic absorption methods for gold and aqua regia digestion ICP methods at ALS Chemex Vancouver, Canada, for other elements.
