Paramount Gold and Silver Corp. announced today that its first phase of metallurgical testing on the waste dumps at its 100%-owned Sleeper Gold Project in Nevada has been completed and the results confirm average recoveries of 70% of the contained gold and 34% of the silver, as reported earlier. This data clearly supports the potential for economic gold recoveries from the Sleeper waste dumps, said Christopher Crupi, Paramount`s CEO.

Paramount announced earlier this year better than expected sonic drilling results from the waste dumps located at the historic Sleeper Mine (see news release of August 15, 2011). The weighted average gold grade from the drilling program was 0.27 g/T while the silver grade averaged 2.78 g/T. Paramount then initiated bottle roll tests on eight relatively coarse-sized composite samples taken from the nine drill holes (80% of the material was less than 3/4 of an inch in size). These tests were designed and conducted by McClelland Laboratories in Reno, Nevada to emulate heap leach extraction. Gold recoveries were very encouraging, ranging from 49% to 89%, with an average of 70% for a 96 hour test period. Relatively low lime and cyanide consumption were also observed which increases the potential for economic recovery.

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 Given these very positives results, Paramount has:

commenced large diameter (6 inch by 10 foot high) column leach tests on similarly-sized material (80% passing 3/4) from sonic drill samples for a 60 day leach cycle at the McClelland Lab.
initiated a reverse circulation drilling campaign of approximately 60 holes on the three waste dumps to better establish grade and volume in order to qualify them as NI 43-101 compliant resources for inclusion in the ongoing Preliminary Economic Assessment (PEA) scheduled for completion in early 2012 by Tetra Tech (www.TetraTech.com), a leading international mining consulting firm.

Mr. Crupi noted that the operations reports from Amax Gold, the Sleeper Mine`s original operator state that about 66 million tonnes of waste rock were extracted during mining of which an estimated 54 million tonnes were placed on the three dumps. If further drilling confirms our preliminary grade estimate of 0.27 grams of gold per tonne, the waste dumps could make a significant contribution to gold resources and overall project economics.

Paramount recently updated its in situ Sleeper Gold Project resource estimate, reporting a measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver and an inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver. (See press release of September 13, 2011 for details). New, recently-announced drill results are expected to increase the size and confidence of this resource estimate, in addition to any contribution which may come from the waste dumps.

The Sleeper Gold Project is located off a main highway about 25 miles from the town of Winnemucca, Nevada. Acquired by Paramount in 2010, the 49.6 square mile project area includes the original Sleeper high-grade open pit mine operated by Amax Gold from 1986 to 1996 as well as newly purchased claims stretching south down trend to Newmont`s Sandman project.

The current work program at Sleeper 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. As a former gold producer, Sleeper is ideally located near the infrastructure required for early, cost-effective exploitation.

Exploration activities at Sleeper are being conducted by Paramount 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 during the program including blank, duplicate and reference standards in every batch of assays. Samples are being assayed at ALS Chemex, Reno, Nevada using fire assay atomic absorption methods for gold, and aqua regia digestion ICP methods at ALS Chemex Vancouver Canada for other elements.

Paramount also owns 100% of the San Miguel Project which consists of 188,000 hectares (465,000 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. Drilling continues at San Miguel with the aim of upgrading and expanding its multi-million ounce gold and silver resource in the coming months to be followed by completion of a PEA in 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 Sleeper Gold Project and the Dunes Project and the expected results of this work. 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, 2011 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.

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