Message #42 From:
Stock News Bot Date: March 16, 2007 02:00:00 AM
PGDP News Exploratory Drilling Program to Commence on the Santos Gold Property in Peru
OTTAWA--(BUSINESS WIRE)--Paramount Gold Mining Corp. (“Paramount”) (OTC:PGDP) (Frankfurt:P6G) (WKN:A0HGKQ) is pleased to announce that they have retained the services of Bradley – MDH to conduct its exploratory drilling program at the Santos property in Peru. This project is under option by Paramount Gold Mining Corp.’s Peruvian subsidiary Cia. Minera Paramount SAC (“CMP”) from Teck Cominco Peru S.A. and is part of the Andean Gold Alliance agreement (AGA) signed with Teck Cominco Limited (“Teck Cominco”) (TSX:TCK.B) in May 2006, for certain exploration properties in Chile, Argentina and Peru.
The 1,500 meter drill program is scheduled to commence on March 19th,, 2007 and should be completed in May 2007. The program will be comprised of 6 holes that will test for gold and silver targeted deposits at 100 to 200 meters below the surface.
Alain Vachon, exploration manager, stated, “We are quite anxious to drill the first holes into this mineralized system as no drilling has ever been done on the property. The property is in close proximity to existing mining operations. The objective of the program is to find the boiling zone which has the potential for deposits of gold and silver.”
The Santos project is comprised of 12 mining concessions totalling 9,300 hectares located in the Department of Ayacucho, which is 400 km SSE of the city of Lima and 60 km NE of the city of Nasca.
Under the terms of the AGA, Paramount and/or its subsidiaries must incur minimum expenditures of US$3,000,000 on the properties over 3 years, with US$1,000,000 in expenditures (including a minimum of 3,000 metres of drilling on 3 properties) per year. In addition, Paramount must issue Teck Cominco 50,000 units a year over the three years. Each unit will include a common share and a 2 year stock purchase warrant that shall be priced at a 30% premium to the 20 day trading average prior to issue.
Upon Paramount vesting in the AGA, CMP may earn a 100% interest in the Santos Property, subject to a retained 2% NSR Royalty and back-in right (as outlined below) to Teck Cominco, by incurring an aggregate expenditure of US$250,000 (including a US$50,000 minimum annual commitment) with respect to Santos.
Teck Cominco may exercise its back-in right on the Santos property at any time up to 60 days after CMP delivers notice that CMP has spent US$3,000,000 on Santos. Teck Cominco may earn a 60% interest by incurring 2 times the expenditures incurred by CMP to a maximum requirement of US$6,000,000. Upon earning back a 60% interest, Teck Cominco shall extinguish the retained NSR Royalty and may elect to earn an additional 10% interest by completing, at its sole cost, a feasibility study on Santos.
About Teck Cominco Limited
Teck Cominco Limited (TSX:TCK.B) is an $18 billion diversified mining company, headquartered in Vancouver, Canada. The company is a leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold and specialty metals.
About Paramount Gold
Paramount Gold is a precious metals exploration company trading on the OTCBB under the symbol PGDP and listed on the Frankfurt stock exchange under the symbol P6G (WKN: A0HGKQ). The Company's objectives are to explore and develop the San Miguel project, located in Chihuahua, Mexico within the Sierra Madre Occidental gold/silver belt and fully develop the potential of the strategic alliance with Teck Cominco for gold exploration in South America. 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).
Quality Control Person
Alain Vachon, P.Eng., Manager of Exploration, South America, is acting as the qualified person and has prepared the content of this news release.
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 commencement of drilling operations, concentration in mineral deposits, delays in testing and evaluation of ore samples, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.
