Paramount wakes up Sleeper mine with new resource

Vancouver – Working to revive the past-producing Sleeper gold mine in Nevada, Paramount Gold and Silver (PZG-T, PZG-X) has released a first estimate as to how much gold could be left in the ground.

Encompassing several zones over a 2- by 1.3-km area, Sleeper is estimated to host 172.8 million measured and indicated tonnes grading 0.47 gram gold per tonne and 4.56 grams silver per tonne for 2.6 million contained oz. gold and 25.3 million contained oz. silver. Inferred resources add 81.8 million tonnes grading 0.43 gram gold and 3.12 grams silver for a further 1.1 million oz. gold and 8.2 million oz. silver.

The resource was based on over 4,000 reverse circulation and core drill holes, but does not factor in any drilling since February. Along with regional exploration, the company has targeted more recent drilling on the historic mill tailings, waste dumps and leached ore around the property to assess the contained gold. Amax Gold produced 1.66 million oz. gold and 2.3 million oz. silver from the mine between 1986 and 1996.

The company reports that there are four main types of gold mineralization in the Sleeper deposit, including quartz-pyrite-marcasite stockwork; medium-grade, silica-pyrite-marcasite cemented breccias; high-grade, banded, quartz-adularia-electrum veins; and alluvial gold-silver deposits. The alluvial potential was also excluded from the study.

The project sits in Humboldt County, roughly 42 km northwest of the company’s head office in the town of Winnemucca. Thanks to previous operations, the property already has established water and electricity sources.

Paramount has contracted Tetra Tech to complete a preliminary economic assessment on the project, to be finished in early 2012.

The company secured the Sleeper Gold mine from X-Cal Resources in 2010 by issuing the company 22 million shares in exchange for all outstanding X-Cal stock. Paramount finished its first exploration program in January and launched a second program in May. For 2011 the company plans to spend roughly US$3-million exploring the Sleeper project.

The bulk of the company’s US$15-million budget for the year, however, is being spent on the San Miguel property in northern Mexico. Thanks to several acquisitions over the last few years, Paramount has assembled a 1,430-sq.-km land package in southwestern Chihuahua. The village of Guazapares is immediately adjacent the historic San Luis mine area, last mined in the 1960s, and the village of Batosegachi is less than a km from the exploration area.

The San Miguel project hosts measured and indicated resources of 5.1 million tonnes grading 0.53 gram gold per tonne and 58.9 grams silver per tonne for roughly 88,400 oz gold and 9.7 million oz. silver, plus inferred resources of 51.4 million tonnes grading 0.62 gram gold and 45.2 grams silver for a further 1 million oz. gold and 74.6 million oz. silver.

The main Guazapares structure at San Miguel has a strike length of approximately 8 km and hosts several exploration areas. Within the structural zone are quartz veins, quartz-pyrite veinlet stockworks and silicified hydrothermal breccia bodies, most of which host significant gold, silver, lead and zinc mineralization.  

The company has roughly $16.2 million in cash on hand and 136.1 million shares outstanding.

Paramount’s share price rose 49¢ or 20.5% to $2.88 on the news with 330,000 shares traded. The company has a 52-week share price range between $1.45 and $4.40.