Paramount Gold Nevada aims to add resources at Oregon mine

Core sample from Grassy Mountain Gold and Silver Project, Malheur County, Oregon, USA

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Core sample from Grassy Mountain Gold and Silver Project, Malheur County, Oregon, USA

Paramount Gold Nevada Corp. [PZG-NYSE AMERICAN] said Tuesday October 1 that it has begun the first phase of an exploration program at its 100%-owned Grassy Mountain gold project in Oregon. The program will focus on identifying and drilling the highest priority targets with a potential to add additional resources at Grassy.

The announcement comes after Paramount recently announced the results of a positive pre-feasibility study on May 24, 2018.

Paramount President Glen Van Treek recently told Resource World Magazine that he hopes to secure the permits in time to start production before the end of 2021.

“It is a very high-grade project that will be profitable at a low gold price.” Initially, production is expected to come from an underground mine that could be expanded later to include an open pit operation.

Paramount is a spin-out of Coeur Mining Co.’s [CDE-NYSE] $200 million acquisition of Paramount Gold and Silver, which closed in April 2015. With a focus on gold assets in the United States, the company is backed by a shareholder group that includes Seabridge Gold [SEA-TSX] with an 8% interest. Albert Friedberg’s Toronto-based FCMI Financial Corp. is the company’s biggest shareholder with a 20% stake.

The company said the independent NI 43-101 pre-feasibility study (PFS) confirms the robust economics for a proposed underground mining operation at the current gold price. The PFS also provides an updated resource estimate and the project’s first statement of proven and probable reserves.

“The PFS clearly shows that Grassy Mountain is a mine worth building,” said Van Treek. “The results demonstrate a low-cost operation that would deliver exceptional cash-flows over its mine life at the current gold price. The scale and simplicity of the proposed operation is one that we are very confident Paramount can build and manage.”

According to the PFS, Grassy Mountain hosts a measured and indicated resource, containing 1.06 million ounces of gold at 0.034 oz/ton (1.17 g/t), plus 3.3 million ounces of silver at 0.107 oz/ton (3.67 g/t).

Proven and probable reserves stand at 362,000 ounces of gold at 0.21 oz/ton  (7.20 g/t) plus 516,000 ounces of silver at 0.30 oz/ton (10.3 g/t).

That material is sufficient to support annual production of 47,000 ounces of gold and 50,000 ounces of silver for 7.25 years.

Van Treek said the PFS also identifies significant opportunities for improving project economics and finding more ore to extend mine life.

In keeping with that theme, the company said exploration will focus on identifying high priority targets for drilling. The first phase of the program consists of a helicopter mag and radiometric survey over the entire 9,300-acre claim area to map structures and magnetic anomalies. Lines on 50-metre spacing are being flown for a total of 1,100 km.

On Tuesday, Paramount Gold shares rose 3.58% or $0.04 to US$1.16. The 52-week range is $1.64 and $1.01.

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