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News Release

Drilling At Paramount Gold And Silver`s San Miguel Project Continues To Confirm And Extend High Grade Zones

Winnemucca, Nevada - October 12, 2011 -Paramount Gold and Silver Corp. (NYSE/TSX: PZG) (Frankfurt: WKN: A0HGKQ) ("Paramount") announced today new assay results from ongoing drilling at its 100%-owned San Miguel Project in northern Mexico continue to expand and upgrade the project`s resources. †Assays from five additional drill holes on the San Miguel Vein target have generated some of the best intercepts to date including 10.6 meters grading 7.9 g/T of gold and 18.0 g/T of silver.

In the current program, Paramount has dedicated one core drilling rig to delineation drilling of the two kilometer long San Miguel Vein.† Results presented here, together with results announced last month (see September 27 news release), continue to demonstrate both strike and dip continuity of the high-grade San Miguel Vein.

Christopher Crupi, Paramount`s CEO, commented that "drilling on the San Miguel Project continues to confirm the extraordinary size and robustness of the mineralizing systems in this mining district. †It is gratifying to see our high success rate on targets like the San Miguel Vein as we have progressively learned more about the geology.† Reflecting this success, we are adding an additional drill to the current program, bringing the total to three."

Results from the most recent holes are:

Hole # Area Total Length From To Width Au g/t Ag g/t
SM-11-075 San Miguel 182.80 39.60 46.45 6.85 0.03 178.8
47.95 51.15 3.20 0.01 70.1
72.30 77.60 5.30 0.02 138.3
84.05 92.05 8.00 0.27 369.9
94.05 115.90 21.85 2.47 196.3
including 103.50 115.90 12.40 4.11 79.1
SM-11-077 San Miguel 181.95 112.30 120.05 7.75 0.13 98.6
130.30 144.70 14.40 2.40 661.6
including 138.25 143.90 5.65 4.71 930.6
SM-11-078 San Miguel 286.50 208.00 211.95 3.95 0.41 7.6
213.50 224.20 10.70 0.95 22.4
including 220.15 224.20 4.05 1.86 27.0
SM-11-081 San Miguel 189.90 122.75 132.30 9.55 0.85 17.6
134.40 138.90 4.50 0.66 19.2
SM-11-082 San Miguel 210.25 143.30 153.90 10.60 7.90 18.0
including 149.20 152.95 3.75 13.10 20.7

See updated map of San Miguel

The orientation of these drill holes was designed to intercept the structural feature at right angles so as to provide a close approximation to true width.

Paramount Gold is currently employing two core drilling rigs on the San Miguel Project and is mobilizing a third core drilling rig to accelerate the program.† The objective of this program is to expand mineralization within known target zones and upgrade the classification of current resources. †

On the San Miguel Vein, 21 drill holes have been completed to date totaling 5,580 meters. †Results have been released for 14 holes including the five noted above. †Assays are pending for seven more holes. †An additional 11 drill holes totaling 3,200 meters are planned for this target.† Results from this program are expected to significantly increase the indicated resource contained in the San Miguel Vein.

Drilling also continues on the Don Ese target to increase the size and classification of its high grade resource. †Results from this target are expected shortly. †A third core rig is being mobilized to continue drilling on the shallow, high grade silver zone recently found at San Antonio which has continued to blossom out in recent drilling. (See press release of September 27, 2011).

Paramount expects to report updated resource estimations for the San Jose, San Luis, La Union, and San Antonio targets by year end 2011. †At that point, Mine Development Associates (MDA, of Reno, Nevada will have completed resource estimates for all of the precious metal deposits on the San Miguel Project.† In early 2012, results from 2011 drilling will be incorporated into updated resource estimates for the San Miguel Vein, San Francisco and Don Ese deposits. †These maturing resource estimates will be used to prepare a Preliminary Economic Assessment (PEA) on the San Miguel Project in the coming year.

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 also scheduled for completion in 2012 to define a development path and economic valuation for each project.

The San Miguel Project 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.† The current work program at San Miguel 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. 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 Nevadaís largest new undeveloped gold resources, containing an in situ measured and indicated resource of 2.6 million ounces of gold and 25.3 million ounces of silver and an additional inferred resource of 1.1 million ounces of gold and 8.2 million ounces of silver (see table at

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 during 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, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

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. 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. Paramountís 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 Paramountís 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