Paramount reports high-grade gold at San Miguel

Paramount Gold & Silver (PZG-T,

PZG-x) reported a strong intercept from recent drilling at the Clavo 66 deposit, part of its San Miguel project, in Mexico.

While Paramount reported one drill hole that intersected 3.52 metres (true width) grading 11.35 grams gold per tonne, the news failed to save its falling share price.

Paramount shares have been falling in step with much of the junior mining circuit and the broader commodity complex as traders brace for the lower demand that a possible global recession would bring.

In Toronto on the news, Paramount shares were off 27% or 16 to 44 on roughly 78,000 shares traded amidst continuing market turmoil. At presstime, however, its shares were rebounding with the market and were trading higher at 63.

The hole came from the heart of the Clavo 66 deposit and intersected the main mineralized structure at a depth of roughly 80 metres.

Paramount says it confirms the continuity of thick, high-grade gold mineralization at Clavo 66 and backs up its decision to push ahead with a prefeasibility study there.

Paramount’s San Miguel project is located in Mexico’s Sierra Madre. At the beginning of the month, the company announced it had acquired a 100% interest in the project by giving Tara Gold Resources (TRGD-o) roughly $8.7 million worth of its shares.

The deal increased Paramount’s inferred silver and gold resources by 32.6 million oz. silver-equivalent to a total of 108.5 million oz. silver equivalent.