Paramount Gold Expands Nevada Land Position Along Sleeper-Sandman Trend

WINNEMUCCA, NEVADA -- (Marketwire) -- 08/23/11 -- Paramount Gold and Silver Corp. (NYSE Amex: PZG)(TSX: PZG)(FRANKFURT: P6G)(WKN: A0HGKQ) ('Paramount') announced today it has entered into an agreement to acquire 606 unpatented lode mining claims (the 'Claims' or the 'Dunes Project') in northwestern Nevada covering a total of 12,520 acres strategically located between Paramount's Sleeper Gold Project and also adjacent to Newmont's Sandman Gold Project which lies just 11 miles south of Sleeper (for location map: http://www.paramountgold.com/_gui/SleeperICNClaimMap.png).

A 100% interest in the Claims is being purchased from ICN Resources Ltd. (TSX VENTURE: ICN) of Vancouver in exchange for 400,000 shares of Paramount restricted common stock. ICN retains a net smelter royalty of 1.5% on the portion of the Claims not subject to other royalties and a net smelter royalty of 0.5% on the portion already subject to a 2.0% royalty held by a third party. Closing of this transaction is subject to regulatory approval.

Paramount's 100% owned 30 square mile Sleeper Gold Project is located off a main highway about 25 miles outside of the town of Winnemucca. Acquired by Paramount in 2010, the project area includes the original Sleeper high-grade open pit mine operated by AMAX Gold from 1986 to 1996, producing 1.7 million ounces of gold and 2.3 million ounces of silver. Paramount believes that the geologic potential at Sleeper was not fully assessed by AMAX Gold and that, based on results to date, there is considerable potential to expand existing gold resources and find additional deposits.

The Dunes Gold Project is adjacent to Newmont's Sandman Gold Project acquired earlier in 2011 by way of its purchase of Fronteer Gold Corporation for $2.3 billion, effectively valuing Fronteer at $538 per ounce of measured and indicated gold resources. Sandman is within trucking distance of Newmont`s Twin Creeks ore processing facilities.

Commenting on the ICN deal, Paramount CEO, Christopher Crupi noted, 'We are very excited by our work at Sleeper where we believe we can generate a valuable Gold resource in an exceptional location. Our aim is to expand our exploration efforts in Nevada where deposits continue to command a premium in the market, concentrating on the areas where we have a clear edge in knowledge. Based on our extensive experience of Sleeper and the outstanding database we have assembled on the district, we believe the Dunes Project represents a highly prospective addition to our Nevada program.'

Sleeper and Sandman are located on the King's River Rift (also known as the Sleeper Trend) where most of the gold is found in Tertiary volcanic rocks overlying older basement units. The mineralized fluids were typically concentrated within extensional structures with a general north-south orientation. These features are evident in numerous zones along the margin of the Slumbering Hills and between Sleeper and Sandman (all within the Claims) where Tertiary volcanic rocks have been recognized in drill cuttings under alluvial cover. Limited drilling of the Dunes Project has returned low anomalous gold values that merit additional exploration work. With this acquisition, Paramount has also increased its large dataset of geophysical surveys and drilling information that will be used to prioritize and define targets for further exploration.

Paramount is currently employing two drill rigs at Sleeper to expand known mineral zones and to recover samples for metallurgical testing. Results from 2010 and early 2011 drilling will be incorporated into an updated NI 43-101 compliant resource model being prepared by SRK (www.srk.com), a recognized international consulting firm, which is scheduled for completion in early September. Tetra Tech (www.TetraTech.com), a leading international mining consulting firm, has been engaged to prepare a NI 43-101 compliant Preliminary Economic Assessment (PEA) of the Sleeper Gold Project for completion in early 2012. Drilling at Sleeper continues and further results are expected shortly. The current work program at Sleeper is consistent with 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. Sleeper is located near low cost production in Nevada, where the infrastructure already exists for early, cost-effective exploitation.

Exploration activities at Sleeper are being conducted by Paramount Gold 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, Winnemucca, Nevada branch.

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, 2010 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.

Contacts:

Paramount Gold and Silver Corp.

Glen Van Treek, VP Exploration

Chris Theodossiou, Investor Relations

866-481-2233