Paramount Gold and Silver (PZG.TO; NYSEMKT:PZG) announced a few weeks ago the results of the final two holes it drilled at the Don Ese target at its San Miguel project in Mexico. Of interest is an intercept of 18 meters at 4.46g/t gold and almost 14 ounces per tonne of silver and another hole intersected 7.7 meters of 2.21g/t gold and almost 4 ounces per tonne of silver. According to the company, these intercepts will very likely increase the average grade at Don Ese and as these holes were infill-holes drilled in the existing resource block model.
A grade increase at Don Ese could have important consequences for the San Miguel project as a whole as the economics of the project might be enhanced. The PEA which was released last year envisaged a 14 year mine life wherein approximately 1.6 million gold-equivalent ounces would be produced.
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Disclosure: The author holds no position in Paramount Gold and Silver. Please see our disclaimer for current positions.
