Paramount Gold and Silver Extends High Grade Gold and Silver Values Down Dip on Don Ese Vein at San Miguel Project, Mexico

DS-13-032 reports intercepts up to 42.5 g/T gold and 186 g/T silver within a 22.5 meter wide mineralized zone

Paramount Gold and Silver Corp. (NYSE MKT:PZG)(PZG.TO)(P6G.F)(WKN:A0HGKQ) ("Paramount") today reported that a new drill program designed to test the depth potential of the high grade Don Ese Vein has intersected outstanding gold and silver grades over greater-than-expected widths, indicating that substantial additional resources could be developed below the current resource model.

Drill hole DS-13-030 targeted the Don Ese Vein approximately 100 meters below hole DS-12-025 which was drilled on the same section last year (see section below). DS-13-30 intercepted two structures-- 6.6 meters grading 2.5 grams per tonne (g/T) gold and 315 g/T silver in the hanging wall (8.4 g/T gold equivalent at current metal prices) and a further intercept of 19.4 meters grading 2.3 g/T gold and 246 g/T silver in the footwall (6.9 g/T gold equivalent). These two intercepts lie within a structural zone which is 50.6 meters wide with an average grade of 1.33 g/T gold and 150 g/T silver (4.1 g/T gold equivalent). Hole DS-13-030 is one of the best drilled to date at Don Ese and represents clear evidence of a structure which is widening at depth while continuing to report exceptional precious metal values. See details in the table below.

Drill hole DS-13-032 targeted a 184 meter gap with no drill data along strike between DS-10-001 and DS-10-003 where the resource model reported waste or low grade material. DS-13-032 intersected a wide structural zone of stockwork and massive veins with gold grades up to 42.5 g/T gold and 186 g/T silver. Overall, the mineralized zone in this hole is 22.5 meters wide with an average grade of 3.16 g/T gold and 44.3 g/t silver (4.0 g/T gold equivalent).

A third hole, DS-13-031, is the northern most hole drilled on the Don Ese structure, located close to the property boundary adjoining the Coeur d'Alene ground to the west. DS-13-031 intersected 4.6 meters grading 1.31 g/T gold and 21.6 g/T silver (1.7 g/T gold equivalent), indicating that the Don Ese Vein pinches out as it crosses onto Coeur's Palmarejo Mine property.

Paramount CEO Christopher Crupi commented: "We have thought for some time that the Don Ese Vein would continue to depth and that widths and grades could increase. This new drill hole, along with additional drilling now in progress, demonstrates that the current resource is wide open to an unknown depth which we intend to define and integrate into an updated resource estimate later this year."

These new Don Ese results were not included in the database used for the robust San Miguel Preliminary Economic Assessment (PEA) released on February 28, 2013. Also not included in the PEA were results of recent drilling at the newly discovered La Bavisa vein (see press releases from May 22, 2012 and November 28, 2012), in the vicinity of Don Ese. "The reality is that San Miguel continues to grow quickly, outpacing our engineering work, and we are far from exhausting our list of highly prospective opportunities for resource expansion," Crupi said.

At a gold price of $1500 per ounce and a silver price of $29 per ounce (the 3 year trailing average of gold and silver prices at the end of January 2013), the San Miguel PEA estimated a $1.1 billion pre-tax net cash flow, a $707 million pre-tax net present value at a 5% discount rate and a highly accretive internal rate of return of 33.2%. At recent spot prices of $1600 gold and $33 silver, San Miguel's projected economics improve to $1.3 billion in pre-tax net cash flow, $893 million of net present value at a 5% discount rate and a 39.3% IRR. At recent metal price highs of $1,900 per ounce of gold and $36 for silver, the estimated NPV at a 5% discount rate rises to $1.166 billion with a 48.3% IRR. Note Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA incorporates inferred mineral resources which are considered to be too geologically speculative to have the economic considerations applied to them that would enable them to be categorized as mineral reserves and, as such, do not have demonstrated economic viability. There can be no certainty that the estimates contained in the PEA will be realized.

Additionally Paramount conducted a three drill hole program on La Tinaja a new vein target located south of Temoris town. Although drill holes LT-13-001 to LT-13-003 targeted gold mineralization found at surface drilling did not intersect significant gold and silver mineralization.

NI 43-101 Disclosure

Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel 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 both reviewed and approved this press release. An ongoing quality control/quality assurance protocol is being employed for the program including blank, duplicate and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are being assayed at ALS Chemex and Acme Laboratories, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount

Paramount is a U.S.-based exploration and development company with multi-million ounce advanced stage precious metals projects in northern Mexico (San Miguel) and Nevada (Sleeper). Fully-funded exploration and engineering programs are now in progress at these two core projects which are expected to generate substantial additional value for our shareholders.

The San Miguel Project consists of over 142,000 hectares (over 353,000 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. The San Miguel Project is ideally situated near established, low cost production where the infrastructure already exists for early, cost-effective exploitation. A PEA for San Miguel was completed and announced on February 28, 2013.

The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca. In 2010, Paramount acquired a 100% interest in the project including the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as staked and purchased lands now totaling 2,570 claims and covering about 47,500 acres which stretch south down trend to Newmont's Sandman project. This acquisition is consistent with the Company's strategy of district-scale exploration near infrastructure in established mining camps. A PEA was completed for Sleeper and announced on July 30, 2012.

For details on these resource estimates please see the following news releases: San Miguel Resource Estimate, September 5, 2012; and Sleeper Resource Estimate, July 30, 2012.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources

This news release uses the terms "measured and indicated resources" and "inferred resources". We advise U.S. investors that while these terms are defined in, and permitted by, Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and not normally permitted to be used in reports and registration statements filed with the SEC. "Inferred resources" have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant "reserves", as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable

Safe Harbor for Forward-Looking Statements:

This release and related documents may include "forward-looking statements" including, but not limited to, statements related to the interpretation of drilling results and potential mineralization, future exploration work at the San Miguel Project and the expected results of this work, estimates of resources including expected volumes and grades and the economic projections included in the project's PEA. Forward-looking statements are statements that are not historical fact and are subject to a variety of risks and uncertainties which could cause actual events to differ materially from those reflected in the forward-looking statements including fluctuations in the price of gold, inability to complete drill programs on time and on budget, and future financing ability. Paramount's future expectations, beliefs, goals, plans or prospects constitute forward-looking statements within the meaning of the United States Private Securities Litigation Reform Act of 1995 and other applicable securities laws. Words such as "believes," "plans," "anticipates," "expects," "estimates" and similar expressions should also be considered to be forward-looking statements. There are a number of important factors that could cause actual results or events to differ materially from those indicated by such forward-looking statements, including, but not limited to: uncertainties involving interpretation of drilling results, environmental matters, lack of ability to obtain required permitting, equipment breakdown or disruptions, and the other factors described in Paramount's Annual Report on Form 10-K for the year ended June 30, 2012 and its most recent quarterly reports filed with the SEC.

Except as required by applicable law, Paramount disclaims any intention or obligation to update any forward-looking statements as a result of developments occurring after the date of this document.

Maps are available at the following address: http://media3.marketwire.com/docs/paramountmaps.pdf

Paramount Gold and Silver Corp.
Glen Van Treek
VP Exploration
866-481-2233
Paramount Gold and Silver Corp.
Chris Theodossiou
Investor Relations
866-481-2233