Paramount Gold and Silver Corp. Enters Into Strategic Alliance with Mexoro Minerals Ltd. in Mexicoadmin
Paramount Gold and Silver Corp. is pleased to announce that it has signed a Letter of Intent to enter into a strategic alliance with Mexoro Minerals Ltd. The strategic alliance contemplates both companies combining their mining and exploration expertise including resources such as management, personnel, exploration equipment and mining concessions to maximize shareholder value creating an exciting alignment of interest between the companies. Both companies operate projects in the Sierra Madre gold-silver belt in Chihuahua, Mexico. The synergy of this transaction will be evident as the companies work together in the Guazapares region. The combined position in the area creates a large land position allowing opportunities for exploration and development strategies to maximize shareholder value as per figure 1, which may be viewed at http://www.paramountgold.com/projects/san_miguel_maps.asp.
The companies will also combine Paramount’s recently discovered “Clavo 99″ with Mexoro’s Encino Gordo project for a land package in excess of 1,000 hectares situated immediately east of Coeur d’Alene’s Palmarejo Trogan Project. The location map, figure 2, which may be viewed at http://www.paramountgold.com/projects/san_miguel_maps.asp illustrates Paramount’s ‘Clavo 99′ which trends north-northwest into Mexoro’s Encino Gordo project.
In addition, the companies will establish an exploration team to co-develop Paramount’s 86,000 hectare Andrea concession with the neighboring Mexoro Cieneguita Mine. Cieneguita was last in production by Glamis Gold Ltd. between 1995 and 1998 prior to its acquisition by Goldcorp Inc. Please see figure 3, the location map of Paramount’s Andrea Concession and Mexoro’s Cieneguita Mine at http://www.paramountgold.com/projects/san_miguel_maps.asp.
The agreement calls for Paramount to invest a minimum of $4 million and maximum of $6 million into Mexoro, fixed at a price of $0.50 per unit by June 23, 2008. Each unit will consist of 1 common share of Mexoro and one half warrant to purchase additional common shares at a price of $0.75 per share exercisable immediately for a period of four years from closing. Should Paramount subscribe for the maximum, it would receive 12 million shares and 6 million warrants in the offering. The closing price of Mexoro shares quoted on the OTCBB on May 2, 2008 was $0.59 per share. The Letter of Intent contemplates that Paramount will provide an immediate cash infusion into Mexoro in the amount of $500,000 in the form of a secured convertible debenture bearing interest at a rate of 8% per annum for a term of one year. Paramount will have the option to convert the debt into units as part of the overall financing. Paramount will retain the first right of refusal on all future financings of Mexoro for a period of four years.
Christopher Crupi, Paramount’s Chief Executive Officer, will be appointed President of Mexoro upon completion of the financing and Mario Ayub will remain the Chairman of Mexoro. Paramount will have the right to appoint two members to the board of directors of Mexoro. Mr. Ayub may also be appointed to the board of directors of Paramount and will act as strategic advisor to Paramount. Mario Ayub is a chemical engineer and is a specialist in metallurgy. Mr. Ayub has served as President of the Chihuahua Mining Association from 2002- 2005 and from 1998 to 2002 was president of the National Miners Association of Mexico.
The companies will form a joint exploration and development management committee with the responsibility of reviewing and planning the exploration programs of both companies. Charles William (Bill) Reed and Barry Quiroz will remain Vice President of Exploration for Paramount and Mexoro respectively. Barry Quiroz is a geologist and has held a management position with BHP Billiton.
Christopher Crupi commented on the transaction, “Combining our exploration assets with those of Mexoro, particularly our San Miguel concessions in the Guazapares region, will give the companies significant property holdings for exploration in the mineral rich and prolific Sierra Madre gold-silver belt. Together, the companies control over 100,000 hectares within three historic mining districts and the combined exploration teams of over 100 people will be one of the most experienced in Mexico.”
Mario Ayub, President of Mexoro, said “This transaction results in synergies on many levels. Paramount is a well managed and well financed company trading on senior exchanges. The strategic geographical positioning of our properties in relation to Paramount, coupled with our common vision of an aggressive exploration program in this prolific area provides the potential for significant success going forward.”
Paramount Gold is a precious metals mining exploration company presently in the early stages of an extensive exploration program at their San Miguel project in the Guazapares Mining District, part of the Sierra Madre Occidental gold-silver belt of Mexico. Paramount Gold and Silver Corp. is the operator of the San Miguel project.
“Safe-Harbor” Statement: This press release contains forward-looking information within the meaning of Section 21E of the Securities Exchange Act of 1934. All statements that are not statements of historical fact regarding the intent, belief or current expectations of the Company may not be realized. Investors are cautioned that any such forward-looking statements are not guarantees of future performance and involve risks and uncertainties, many of which are beyond the Company’s ability to control, and that actual results may differ materially.
The Toronto Stock Exchange has not reviewed and therefore does not accept responsibility for the adequacy or accuracy of this release.
Contacts: Paramount Gold and Silver Corp. Christopher Crupi CEO
Paramount Gold and Silver Corp. Chris Halkai Corporate Relations 866-481-2233
Mexoro Minerals Ltd. Mario Ayub CEO
Source: Paramount Gold and Silver Corp.