The companies will also combine Paramount’s recently discovered Clavo 99 prospect 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. In addition, the companies will establish an exploration team to codevelop Paramount’s 86,000-hectare Andrea concession with the neighboring Mexoro Cieneguita mine. Cieneguita was operated by Glamis Gold between 1995 and 1998 prior to its acquisition by Goldcorp Inc.

The agreement calls for Paramount to invest a minimum of $4 million and maximum of $6 million into Mexoro. Paramount has already contributed a cash infusion to Mexoro in the amount of $500,000 in the form of a secured convertible debenture bearing interest 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 CEO, 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. Ayub may also be appointed to the board of directors of Paramount and will act as strategic advisor to Paramount.

The companies will form a joint exploration and development management committee with the responsibility of reviewing and planning the exploration programs of both companies.