Paramount Gold and Silver (PZG-T) is bulking up resources down in Mexico.
The company released an updated resource estimate for its wholly-owned San Miguel Project in the country that boosted indicated gold resources by 547% and its silver resources by 240%.
The new estimate outlines indicated resources of 23.9 million tonnes grading 0.83 grams gold and 70 grams silver for 639,000 oz. of gold and 53.6 million oz. silver. Inferred resources of 37.5 million tonnes grading 0.69 grams gold and 38 grams silver for 830,000 oz. gold and 46.2 million oz. silver.
Using the long term gold-to-silver price ratio of 1-to-60, San Miguel has 1.53 million indicated gold equivalent oz. and 1.6 million inferred gold equivalent oz.
The updated was based on data from 139 new core drill holes totaling 37,925 metres completed during 2011 and the first half of 2012.
The resource estimate is composed of seven different zones: Don Ese, San Miguel, Union, San Francisco, San Antonio, La Veronica, and Monte Cristo-Sangre de Cristo.
A big reason why Paramount was able to increase ounces without a parallel increase in tonnage was due to the infill drilling programs hitting continuity higher-grade mineralization. Paramount hadn’t assumed such continuity in its previous inferred resources.
As for comparables, Paramount says investors shouldn’t look far. It says the nearest equivalent property from a geological perspective is the Palmarejo Mine right next door which is owned by Coeur d’Alene Mines (CDM-T, CDE-N).
Paramount continues to explore San Miguel, following up its recent discovery at La San Miguel covers 188 sq. km in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder the mining camp.
Since releasing the update on Sept 5, the company’s shares have climbed 14% to $2.72.
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