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Paramount Gold to Acquire an 80% Interest in over 6,000 Hectares Surrounding Their San Miguel Project in Mexico.

CHIHUAHUA, Mexico -- Paramount Gold Mining Corp. (OTC:PGDP) (FWB:P6G) (WKN:A0HGKQ) announced today that they have signed a letter of intent setting out the terms of an option to acquire an 80% interest in over 6,000 hectares of property from Garibaldi Resources Inc. (TSX VENTURE:GGI). The additional property surrounds Paramount's San Miguel project and adjoins Paramount's Andrea concession to the east of San Miguel.

Paramount's Manager of Exploration in Mexico, Bill Reed, commented: "I am very pleased that we have come to terms on an option to acquire this strategic piece of property that fills the gap in our land position between our San Miguel and Andrea concessions. More importantly, it surrounds much of our San Miguel project where I believe our drill program is proving a substantial precious metal discovery. I am looking forward to working with Garibaldi to explore the potential of these new concessions."

The terms of the formal agreement to be entered into within 60 days provide that Paramount issue Garibaldi 100,000 restricted shares and spend US $300,000 within 18 months to earn a 50% interest, and issue an additional 100,000 shares with a further exploration commitment of US $400,000 within 36 months to earn a 70% interest. Paramount may increase its interest to 80% by making a payment to Garibaldi of US $500,000 or an equivalent amount of Paramount common shares within 48 months from the date of this agreement.

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 Guazapares 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, 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 the Andean Gold Alliance with TeckCominco in South America, 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: (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.
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Publication:Business Wire
Date:Oct 9, 2006
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