High-grade assays continue at Gunung Rosa

02/08/2012 | 07:22pm
8 February 2012 High-grade assays continue at Gunung Rosa Highlights

? New assay results from drilling at Gunung Rosa from the first stage due diligence program demonstrate persistence of high-grade mineralisation.

? Initial 6-hole program has been extended to 13 holes.

? New Intersections include:

? GRD006 1.40m @ 4.22 g/t Au 6.9 g/t Ag, 0.51% Zn

? GRD007 4.60m @ 9.95 g/t Au, 16.8 g/t Ag, 3.49% Zn, 1.40% Pb Including 2.30m @ 17.02 g/t Au, 27.7 g/t Ag, 4.75% Zn and 2.60% Pb Including 1.50m @ 23.05 g/t Au, 35.0 g/t Ag, 4.66% Zn and 3.09% Pb Including 0.80m @ 23.80 g/t Au, 40.5 g/t Ag, 8.17% Zn and 5.56% Pb

? GRD008 3.40m @ 2.25 g/t Au, 4.22 g/t Ag, 0.40% Zn Including 2.40m @ 3.10 g/t Au, 4.7 g/t Ag, 0.31% Zn Including 0.70m @ 6.02 g/t Au, 9.2 g/t Ag, 0.64% Zn Including 1.40m @ 4.77 g/t Au, 7.4 g/t Ag, 0.46% Zn

? GRD009 9.80m @ 7.43 g/t Au, 18.2 g/t Ag, 0.62% Cu, 4.43% Zn Including 7.0m @ 9.86 g/t Au, 23.3 g/t Ag, 0.82% Cu, 6.40% Zn Including 3.2m @ 18.04 g/t Au, 37.20 g/t Ag, 0.90% Cu, 7.63% Zn

Including 1.3m @ 33.64 g/t Au, 57.9 g/t Ag, 0.82% Cu, 11.82% Zn

Paramount Mining Corporation Limited (ASX:PCP, "Paramount", "Company") is pleased to announce assay results from diamond drill-holes GRD006, GRD007, GRD008 and GRD009 from its extended due diligence drilling program at its Gunung Rosa gold-silver project in West Java Province, Indonesia, first announced to the ASX on 8 September 2011. The results continue to build on the very encouraging results from its previous five diamond drill-holes (GRD001 to GRD005) disclosed in the Company's 12
September and 13 October 2011 announcements and are consistent the grade and intersection widths determined from 63 historic drill holes and underground development previously announced to the ASX.
Hole GRD006 further tested the vein system at Cap Palu in the north while holes GRD007 and GRD008 tested the base metal-rich Cibitung section at the southern end of the 900 metre main vein system. Hole
GRD009, drilled through the central Cisudi section of the vein system, is the first of a series to test the vein system persistence to depth. (Refer Figure 2 for hole locations). The drilling program has been extended from an initial 6 holes to a 13-hole program. All holes have now been logged and assayed and results for the remaining holes will be released as compilation of the information is completed.
Paramount's Chairman, Mr. Mo Munshi commented, "What we continue to see in these results is confirmation of the recognised gold and base metal mineralisation at Gunung Rosa, however perhaps more significant is the much wider than anticipated intersection widths achieved in some sections of the vein system giving scope for increased resources over that previously recognised. The results continue to support our expectation for an early initiation of trial mining to firm up full scale mining options and installation of a pilot plant for large scale beneficiation testing of ores following satisfactory results from metallurgical testing of bulk samples being collected from existing underground development".

About Paramount

Paramount is an Australian mineral resource exploration and development company focussing on precious and base metal deposits in Asia, and in particular Indonesia. The Gunung Rosa project is Paramount's flagship project and the company will hold 72.25% interest in the project.

About the Gunung Rosa Gold-Silver Project

The 2,475 hectare Gunung Rosa exploitation licence (IUP) is located 125 kilometres south east of Jakarta, in West Java Province, Indonesia (Figure 1). It is accessible by sealed road and serviced by State grid electricity. The most prominent mineralised vein zone contained within the licence is a steeply dipping high grade gold-silver and base metal mesothermal vein system in excess of 900 metres in strike length which is open along strike and to depth.
There a numerous other occurrences of vein mineralisation of similar style recognised within the IUP licence within a 3 kilometre radius about Cap Palu, the original mine site, and these have been mapped and sampled by Paramount geological staff as part of a licence wide geological mapping project. Results
from this program were released to the ASX on 8 November 2011.

Figure 1: Map showing location of Gunung Rosa in West Java in relation to major cities and other significant mineral occurrences.

Datum: WGS84 Zone 48 South

Drill Hole Location Plan Showing

Relation of Veins and Development

Figure 2: Plan showing location of drill holes GRD006, GRD007, GRD008 and GRD009. (Refer to Company's 12

September 2011 announcement for earlier results).

A table of significant results returned from holes GRD006 to GRD009 is shown at end of release and summarised in Figures 3-6 below. Figure 7 gives a long section summary of intersections from holes released to date.

Figure 3: Geological cross section for diamond drill-hole GRD006, showing significant assay results.

Figure 4: Geological cross section for diamond drill-hole GRD007, including significant assay results.

Figure 5: Geological cross section for diamond drill-hole GRD008 giving significant assay results.

Figure 6: Geological cross section for diamond drill hole GRD009 giving significant assay results. This hole is the first of a series of holes drilled to test vein persistence at greater depth.

Figure 7: Summary of significant drill hole intersections in current due diligence program.

Summary of Drill Core Geology

The contrasting style of vein, mineralisation and alteration styles observed between the northern Cap Palu and southern Cisudi and Cibitung sections of the vein persist in the new holes to depth. The main difference is in the relative abundance in base metal content to the south and more pyrite and country rock leaching and silicification toward the north. Also seen is a more complex mineralogy toward the south. This is discussed in the previous drill hole release to the ASX on 13 October 2011 and examples are shown in figures in that release.
In the south the veins are physically more highly constrained by competent massive intrusive wall rock, intrusive breccias, pebble dykes and hydrothermal breccias. The deeper and more extensive drilling is showing the "pinch and swell" characteristics typically expected in structures in mesothermal and epithermal base metal systems. The narrowing of the host structure in some cases coincides with significant elevation in grade in other cases perhaps where fluid flow has been restricted grade is lower. This is offset by significant thickening of other vein sections with good grade mineralisation persisting in other drilled locations as seen in the differences in intersections between holes GRD007 to GRD009.
In some cases additional veins have been intersected beyond those known from historic drilling. Paramount has controlled the termination of its holes based on the limits of the significant alteration envelope about the main vein intersection and where sulphide persists within the alteration envelope. This has achieved some significant wider intersections in some holes of good Au grade outside the obvious vein limits and intersection of other veins developed within the same alteration envelope.
Examples of drill core intersections through mineralisation in the holes released here are shown below in
Figures 8-11.

Figure 8: Au bearing vein intercepts in hole GRD006 at Cap Palu hosted in leached and silicified intrusive breccias.

See table following for assay values in interval.

Figure 9: High grade vein intercept in GRD007 (137-144m). Note highly competent wall rock of massive intrusive.

Core recovery is normally in excess of 90%, often >95%. See table below for values.

Figure 10: GRD007 (168 - 171m) Example of minor but in some cases good grade veins out of main mineralised zone.

Figure 11: GRD009 (237 - 243m). High grade intercept hosted in intrusive and hydrothermal breccias within massive intrusive upper photograph; detail in lower photograph. See table below for values.

For further information please contact the undersigned on (08) 9328 5600.

Mo Munshi

Chairman

+61 414 549 329

+86 139 1017 5192

Significant assay results from holes GRD006, GRD007, GRD008 and GRD009 at the Gunung Rosa Project. Collar locations are shown on Figure 2. GRD006: GRD007: GRD008:

From(m)	To(m)	Interval(m)	Au(g/t)	Ag(g/t)	Cu(ppm)	Pb(ppm)	Zn(ppm)
148.50	150.50	2.00	0.77	6.8	1930	3505	20315
149.50	150.50	1.00	0.93	8.4	2330	4750	31800
160.50	162.90	2.40	3.10	4.7	637	1578	3135
161.50	162.90	1.40	4.77	7.4	989	2635	4575
161.50	162.20	0.70	6.02	9.2	1270	3750	6420

GRD009:

Single sample intervals are given in some cases to illustrate rapid change in precious and base metal grades through vein intersections. Samples were collected at natural geological breaks or where significant mineralogical changes occur to assist in interpretation of controls on grade distribution and in determining beneficiation characteristics of the different ore associations present.
Gold assay were undertaken by Intertek, Jakarta using 50g fire assay (Method FA50, Aqua regia finish);
low base metals by ICP-OES (Method IC01); high base metals (>1%, Method GA50).

All Grid Coordinates Use Datum: WGS 84 Zone 48 South

Competent Person Statement

The exploration activities and results contained in this report have been reviewed by Dr. Neil F. Rutherford. Dr Rutherford is a Fellow of the Australian Institute of Geoscientists and is a full time employee of Rutherford Mineral Resource Consultants, mineral industry consultants. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which he is undertaking to qualify as a Competent Person as defined in the December

2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code).

This review and comments by Dr Rutherford incorporated in the release text are based upon field inspection of the Gunung Rosa

Project area, West Java, including the drill core during 2011 along with input from his associates who have worked on the property. All of the significant information reported herein was available to Dr Rutherford and was reviewed for this release. Dr. Neil Rutherford has consented to the inclusion in this report of the matters based on this information in the form and context in which it appears.