Paramount Gold and Silver has reported the results of a preliminary economic assessment (PEA) for its 100%-owned Sleeper gold and silver project in Humboldt county, Nevada. Paramount acquired a 100% interest in the project in 2010, including the original Sleeper high-grade open-pit mine operated by Amax Gold from 1986 to 1996. The PEA was led by Scott E. Wilson Consulting Inc., using resource and geologic information devel-oped by SRK Consulting (Chile) S.A.

The Sleeper PEA proposes development of a large-scale, open-pit mining operation with a heap leach processing plant han-dling both oxide and sulphide material, producing a gold-silver doré. Mining at a rate of 81,000 mt/d would result in a 17-year operation, with average annual pro-duction of 172,000 oz of gold and 263,000 oz of silver. Projected life-of-mine average cash operating costs are $767/oz of equivalent gold recovered.

Start-up capital costs are estimated at $346 million. Sustaining capital costs over the project’s life are estimated at an additional $278 million. Total capital cost contingencies over the project life are esti-mated at an additional $64 million, bring-ing the total life-of-mine capital costs to $688 million. The total cost/oz of equiva-lent gold production (including cash oper-ating costs and total capital and contin-gency costs over the life of the mine) is estimated at $996/oz.

Global combined oxide and sulphide measured and indicated resources at the Sleeper project total 241.5 million mt at average grades of 0.39 g/mt gold and 4.20 g/mt silver, for 3.05 million oz of contained gold and 321.6 million oz of contained sil-ver. Paramount notes that the PEA also incorporates inferred mineral resources.

Paramount has performed scoping level metallurgical testing to provide a basis for estimation of potential process recoveries for oxide, sulphide, and mine dump mate-rial. Three general mining zones were defined on the basis of this testing and his-torical mining performance: the Facilities Zone (an area on the eastern edge of the Sleeper surface excavation); the Sleeper Zone (low-grade continuation of the original Sleeper deposit at depth); and mine dumps from historic Sleeper mining operations.

The process facilities are assumed to be standard cyanide heap leaching with a carbon-in-column and adsorption-desorp-tion recovery plant. The process facilities would produce a doré for direct sale to a regional refinery.

Commenting on the results of the Sleeper PEA, Paramount President and CEO Christopher Crupi said, “This PEA is an important step in the rebirth of what was once a very successful Nevada gold producer. The relatively low estimated start-up capital and unit operating costs and a 17-year life make Sleeper an attrac-tive development option. The exploration potential at Sleeper is highly favorable for expanding the resources available to the open-pit operation envisioned in the PEA. We are now drilling these close-in targets to improve the project while also exploring for a second high-grade Sleeper mine on our large land position.”