Paramount Gold and Silver Updates Progress on San Miguel and Sleeper Projects

WINNEMUCCA, NEVADA -- (Marketwire) -- 05/31/11 -- Paramount Gold and Silver Corp. (NYSE Amex: PZG)(TSX: PZG)(FRANKFURT: P6G)(WKN: A0HGKQ) ('Paramount Gold') announced today work to complete Preliminary Economic Assessments on its two main projects is progressing on schedule and on budget.

San Miguel Project - Chihuahua, Mexico

The Company has filed a National Instrument 43-101 technical report on SEDAR containing the previously announced resource estimations on five of the San Miguel's nine deposits known to date. As stated in our April 11, 2011 news release, Mine Development Associates ('MDA') of Reno, Nevada updated resource estimates for a portion of the project and produced three-dimensional models of these mineral inventories.

MDA stated in its final report filed Thursday May 26, 2011:'The San Miguel project continues to generate new zones of gold and silver mineralization, and the strike and down-dip extents of many of the existing deposits remain open. Although particularly true for San Francisco and Don Ese, all of the target areas with resources estimated in this study have the potential for additional gold and/or silver mineralization. Significant additional drilling is clearly warranted'.

Paramount Gold intends to conduct a drill program and other geologic work to expand and upgrade the categories of these mineral resources. Additional work is also currently underway on the mineralized areas not included in the April MDA resource estimation and a further update is expected to be completed later this year, resulting in comprehensive resource estimation for the San Miguel project. Paramount will mobilize a second core drill to the project to ensure timely data acquisition.

Paramount Gold will also expand its metallurgical testing program to define an economically viable process for gold and silver recovery of oxide and sulfide-bearing mineralization. As stated on April 27, 2011, recent testing conducted by McClelland Laboratories Inc in Reno returned very positives results for the recovery of precious metals.

Paramount Gold expects to complete a Preliminary Economic Assessment on San Miguel during the first half of 2012

Sleeper Project - Nevada, USA

The Company has recently commissioned SRK, an international consulting firm, to update the National Instrument 43-101 compliant resource estimation of in situ mineralization at the Sleeper Gold Mine project near Winnemucca, Nevada. The resource estimation will include results from historical drill holes, a 2010 program by Paramount Gold, and a drilling campaign that will start in the coming month. Planned drilling will initially focus on the northern part of the Facilities and the West Wood areas to upgrade resource categories and acquire material for metallurgical testing. Mineralized material from the perimeter of the historical deposits will also be incorporated in the project resource inventory.

The Company recently completed a drilling program on the property's three waste dump areas using Boart Longyear sonic drilling technology. This work is part of an ongoing program to test gold and silver mineralization remaining in the waste dumps, and tailings. Materials collected during this drilling program are being assayed and prepared for recovery testing at McClelland Laboratories Inc.

Geophysical and geochemical surveys are being employed on other targets identified on the Sleeper property. This information will be compiled with existing exploration data and incorporated into a three-dimensional geological interpretation, which is currently under construction. Drill testing of these new outlaying targets will proceed after completion of the resource definition drilling at Facilities and West Wood. Paramount Gold intends to complete a Preliminary Economic Assessment for Sleeper in early 2012

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 Sleeper Gold Mine 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