Paramount started earlier this year to drill the untested gaps between deposits along the structural corridor called the Guazapares Megastructure. A 1.3 km gap south from La Union toward Santa Clara, and a 1.2 km gap north of San Antonio toward La Veronica, provided significant opportunity to expand these known deposits (see map below). Preliminary drilling on these gaps has now confirmed continuity of mineralization and encountered numerous intersections of high-grade precious metals.

The holes drilled into the Guazapares gap were designed to be shallow in order to determine if the structure continued, if it was mineralized and its orientation. This first pass program has been an unqualified success. The next step, which is now in progress, is to define zones of higher gold grades by determining their ‘optimum’ elevation within the structure. At the San Miguel Project, Paramount has found that 300 meters or more of vertical continuity on the main structures carry bonanza grades. This elevation varies from one structure to another. The concept of optimum elevation has helped to add high-grade mineralization at La Union, San Miguel Vein and Don Ese. Results from these new holes confirm that high-grade gold and silver can be expected in the previously untested gaps of the Guazapares Megastructure.

Results from the 16 most recent holes are as follows:

These holes were drilled to intercept the structure at right angles. Paramount believes true widths are not less than 80% of reported intercepts.

MDA is integrating a total of 130 new core drill holes (including these 16) totaling 35,447 meters into the updated resource estimate. The new resource estimate will be incorporated into a Preliminary Economic Assessment planned for completion later this year which will evaluate mining scenarios, mining rates and process alternatives while defining a path to a Preliminary Feasibility Study, which would report reserves. Paramount has sent over two tonnes of material representing the different types of San Miguel mineralization to generate composites for metallurgical testing by McClelland Laboratories in Reno, Nevada.

Paramount continues to explore the potential of its large San Miguel property position and is prioritizing numerous untested targets as well as extensions of known deposits, many of which remain open, as it pursues additional resource expansion.

Exploration activities at San Miguel are being conducted by Paramount Gold de Mexico S.A de C.V personnel under the supervision of Glen van Treek, Exploration Vice President of the Company and Bill Threlkeld, a Qualified Person as defined by National Instrument 43-101, who have both reviewed and approved this press release. An ongoing quality control/quality assurance protocol is being employed for the program including blank, duplicate and reference standards in every batch of assays. Cross-check analyses are being conducted at a second external laboratory on 10% of the samples. Samples are being assayed at ALS Chemex, Vancouver, B.C., using fire assay atomic absorption methods for gold and aqua regia digestion ICP methods for other elements.

About Paramount Gold

Paramount Gold is a U.S. based exploration and development company with multi-million ounce advanced stage precious metals projects in Nevada (Sleeper) and northern Mexico (San Miguel). Fully funded exploration programs are now in progress at these two core projects which are expected to generate substantial additional value for our shareholders. Engineering studies are scheduled for completion in 2012 to define a development path and economic valuation for each project.

The 100%-owned San Miguel Project consists of 150,160 hectares (371,053 acres) in the Palmarejo District of northwest Mexico, making Paramount the largest claim holder in this rapidly growing precious metals mining camp. The current work program at San Miguel is part of Paramount’s strategy of expanding and upgrading known, large-scale precious metal occurrences in established mining camps, defining their economic potential and then partnering them with nearby producers. The San Miguel Project is ideally situated near established, low cost production where the infrastructure already exists for early, cost-effective exploitation. Paramount also owns 100% of the Sleeper Gold Project which is emerging as one of Nevada’s largest new undeveloped gold resources (see the global resource table below).

SUMMARY OF ALL PZG NI 43-101 COMPLIANT RESOURCE ESTIMATES:

For a detailed report on these resource estimates, their QPs and methodologies please see the following news releases: April 11, 2011 San Miguel; September 13 2011, Sleeper; December 28 2011, San Miguel.

Cautionary Note to U.S. Investors Concerning Estimates of Indicated and Inferred Resources

This news release uses the terms “measured and indicated resources” and “inferred resources”. We advise U.S. investors that while these terms are defined in, and permitted by, Canadian regulations, these terms are not defined terms under SEC Industry Guide 7 and not normally permitted to be used in reports and registration statements filed with the SEC. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an inferred mineral resource will ever be upgraded to a higher category. Under Canadian rules, estimates of inferred mineral resources may not form the basis of a feasibility study or prefeasibility studies, except in rare cases. The SEC normally only permits issuers to report mineralization that does not constitute SEC Industry Guide 7 compliant “reserves”, as in-place tonnage and grade without reference to unit measures. U.S. investors are cautioned not to assume that any part or all of mineral deposits in this category will ever be converted into reserves. U.S. investors are cautioned not to assume that any part or all of an inferred resource exists or is economically or legally minable

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 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, 2011 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.

A map is available at the following address: http://media3.marketwire.com/docs/pzg0723.jpg