WINNEMUCCA, NEVADA--(Marketwire - Oct. 22, 2012) - Paramount Gold and Silver Corp. (NYSE MKT:PZG)(NYSE Amex:PZG)(News - Market indicators)(FRANKFURT:P6G)(WKN:A0HGKQ) ("Paramount") announced today that it has received the final results from a large-scale, comprehensive metallurgical test program for its 100%-owned San Miguel Project in northern Mexico. The results predict high recoveries of gold and silver from either a milling/cyanide leach or conventional milling/flotation process. The data will now be evaluated by Scott E. Wilson Consulting for inclusion in their Preliminary Economic Assessment of the San Miguel Project scheduled for the end of this year.

The program was conducted by McClelland Laboratories (http://www.mettest.com/mliindex.htm) of Reno, Nevada using composite samples prepared by ALS Chemex of Chihuahua, Mexico from about two tonnes of drill core supplied by Paramount. McClelland conducted a total of 114 separate metallurgical tests. In 38 trials, coarse samples (P₈₀19_mm) were subjected to cyanide bottle roll tests (BRT) in order to assess the potential for heap leaching. Crushed core rejects were used to generate an additional 76 samples of relatively fine grain material (P₈₀75μm) which were also subjected to cyanide BRT as well as flotation tests. The size of this fine grain material is well within the range considered normal for conventional milling.

Overall, gold recoveries on fine grain samples (P₈₀75μm) grading more than 0.1 g/T Au averaged 94% in cyanide BRT and 82% in flotation tests with modest reagent consumption. Less effective were the cyanide BRT recoveries of gold in coarse material (P₈₀19_mm), indicating that a heap leach process would likely not be effective. Silver recoveries from the fine grained samples grading over 5.0 g/T Ag averaged 74% for cyanide BRT and 79% for flotation tests. Cyanide silver recoveries from coarse material were comparatively low.

Paramount investors can review and download all test results and related charts from our web site (http://paramountgold.com/Projects/SanMiguel_TechnicalReports.asp). Average gold and silver recoveries from the five main areas at San Miguel are as follows:

Paramount CEO, Christopher Crupi commented that "these results indicate that San Miguel can expect excellent recoveries using a standard mill followed by either flotation or whole rock cyanide leaching with relatively low cyanide and lime consumption. McClelland will now proceed with additional cyanide leach tests designed to optimize silver recoveries especially from higher grade material, which could further enhance project economics. The potential of San Miguel continues to surprise us to the upside. These positive metallurgical results are a major step in de-risking the project and moving it towards early production."

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 QP as defined by National Instrument 43-101, who have both reviewed and approved this news release. An ongoing quality control/quality assurance protocol is being employed for exploration work at San Miguel 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, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount Gold

Paramount Gold is a U.S. based exploration and development company with multi-million ounce advanced stage precious metals projects in Nevada (Sleeper) and northern Mexico (San Miguel). Fully funded exploration programs are now in progress at these two core projects which are expected to generate substantial additional value for our shareholders. Engineering studies are scheduled for completion in 2012 to define a development path and economic valuation for each project.

The 100% owned San Miguel Project consists of 150,160 hectares (371,053 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. The current work program at San Miguel is part of 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. The San Miguel Project is ideally situated near established, low cost production where the infrastructure already exists for early, cost-effective exploitation. Paramount also owns 100% of the Sleeper Gold Project which is emerging as one of Nevada's largest new undeveloped gold resources.

SUMMARY OF ALL PZG NI 43-101 COMPLIANT RESOURCE ESTIMATES

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 metallurgical test results and expected recoveries of gold and silver and future metallurgical testing at the San Miguel Project and the expected results of this work, estimates of resources including expected volumes and grades and the anticipated completion of a 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.