Paramount Gold Begins Drill Program to Upgrade and Expand 32.9 Million Ounce Silver Equivalent Resource on the La Blanca Zone, San Miguel Project, Mexico.

CHIHUAHUA, Mexico -- Paramount Gold Mining Corp. (OTC:PGDP)(FWB:P6G) is pleased to announce the signing of a drilling contract with Layne de Mexico, to drill a minimum of 1500 meters of core at its San Miguel Project in SW Chihuahua beginning this week.

Bill Reed, Manager of Exploration in Mexico stated, "It is exciting to start drill testing the La Blanca silver deposit. Prior drilling in the early 1990's identified a resource of more than 32 million ounces of silver running nearly 5 ounces per tonne, and there is very good potential to dramatically expand this resource at La Blanca in the near future. We have sampled other widely spaced outcrops and old mine working in the adjacent Montecristo II area where an additional silver resource can quickly be added. I am optimistic that we will be able to identify a larger, surface mineable silver resource with good grade."

The first holes in this Phase 1 drill program are planned in the La Blanca area which is only one of several silver/gold zones that Paramount has identified at San Miguel. In 1993, War Eagle Mining announced 6 million tonnes averaging 4.7 ounces silver and 0.013 ounces (32.9 million ounces of silver equivalent) in an E-W striking zone 100 meters wide and 250 meters long that has become known as the La Blanca silver deposit. The deposit was outlined by more than 50 reverse circulation holes drilled to depths of between 100 and 150 meters under shallow overburden that covers the mineralized rock.

The first three core holes will twin reverse circulation holes drilled by War Eagle, and then another five to seven 100 to 150 meter deep drill holes are planed to further substantiate and upgrade the silver resource at La Blanca. When Phase 1 drilling is completed at La Blanca, the drill will be moved to the Montecristo II concession located about 1 kilometer to the NW where it will test two adjacent and parallel mineralized structures. One of these structures averaged 224 grams silver and 0.03 grams gold per metric tonne over a width of 14 meters, and the other 163 grams silver and 0.10 ounces gold per metric tonne over a width of 7.4 meters.

Ongoing Trenching Program

Two trenches were recently excavated, mapped and sampled at the east end of the La Blanca silver deposit. The trenches, one 54 and the other 68 meters in length, crosscut the mineralized zone. The 86 rock chip samples cut from these trenches have been submitted to ALS Chemex Labs for assay. Two more trenches are currently being excavated. Exposed in the trenches are several strongly altered dikes up to 20 meters in width that have intruded chloritized andesite that contains up to 5% pyrite. The dikes are strongly argillized and in places silicified, and contain between 1 and 4% pyrite and several percent of a grey metallic sulfide that may be argentite. These dikes are thought to host silver-gold mineralization and strike to the NE with a 60 degree SE dip. Trenching was not originally planned at La Blanca as the old drill logs indicated that the average depth of soil cover was +4 meters. Several test pits were excavated, and it was found that the overburden is only 1 to 2.5 meters in thickness, so the trenches were extended to better expose bedrock. This in turn has aided in the design of the drill program and also adds confidence that the silver resource is open at depth and to the south.

About San Miguel

San Miguel is currently comprised of 16 concessions covering an estimated 6 kms strike of silver and gold mineralization. It is located in Chihuahua, Mexico and lies in the Temoris mining district, part of the gold-silver belt of the Sierra Madre Occidental. Paramount signed an agreement in August 2005 with Amermin S.A. de CV, a subsidiary of Tara Gold Resources Corp., to acquire a 70% interest in the San Miguel project.

About Paramount Gold

Paramount Gold Mining Corp. is a precious metals exploration and development company. It is management's objective to grow Paramount into a significant gold and precious metals producer by developing the San Miguel and Linda projects in Mexico and Peru, and by acquiring other advanced-stage projects and/or producing mines in the most prolific precious metal districts in the world. The Company trades on the OTC market under the symbol "PGDP" and on the Frankfurt Exchange under the symbol "P6G". For more information, please visit the Company's web site at: www.paramountgold.com (now available in the following languages: English, German, French, Spanish, and Mandarin).

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.