Granada Gold Mine Inc. press release

Paramount Gold Outlines a High Potential Gold-Silver Target at Santos, Peru

2006-09-27

TSXV - TSX Venture Exchange · Gold · Silver · Rubidium · Scandium · Cesium · Neodymium · Gallium · Hafnium · Strontium · Cerium · Rare Earth Elements · Magnet Rare Earth Elements · Canada

LIMA, PERU, September 27 /CNW/ - Paramount Gold Mining Corp. (OTC:PGDP) (FWB:P6G) (WKN:A0HGKQ) is pleased to provide the results of the preliminary exploration work carried out at their Santos project in Peru. This property has been acquired as part of the Andean Gold Alliance partnership signed with Teck Cominco Limited (TSX:TCK.B) in May 2006, for the exploration of 21 properties in Chile, Argentina and Peru.

The Santos project is comprised of 12 mining concessions totaling 9,300 hectares located in the Department of Ayacucho, which is 400 km SSE of the town of Lima and 60 km NE of the town of Nasca.

The Santos project is located at the western boundary of the Antapite-Ares gold-silver belt which hosts several small to medium sized low and high sulphidation Au-Ag deposits. In particular, the Santos project bears several similarities with a group of three producing mines located east of Santos along a main crustal E-W trending structure i.e.; the Chipmo (1.6 M oz Au; 3.3 M tons at 17 g/t Au), the Ares (1.2 M oz Au and 21 M oz Ag; 2 M tons at 22 g/t Au and 11 oz/t Ag) and the Explorador (0.3 M oz Au and 17.5 M oz Ag: 2.2 M tons at 3 g/t Au and 8 oz/t Ag). Santos is located just north of this important lineament along a NNW trending crustal structure. What's impressive is the fact that in these deposits, the length of the outcropping discovery veins (up to 7) is less than 200 meters as opposed to almost 2 km in underground workings. To date, 13 veins having strike length up to 450 meters have been mapped on Santos which supports the great potential of this property. In all of these deposits, gold is free and is associated with iron oxide whereas gold recovery is via heap leaching. In general, these mines are highly profitable as total production costs are below US $100/oz while in situ ore value is greater than US $300 per ton (at actual metal prices).

Alain Vachon, Manager of Exploration for Paramount Gold in South America, commented: "We are very impressed with the results of our preliminary investigation on the Santos project. In this case, it's as important to look for the right analogies with the known mines, than just posting high grade gold/silver values. Having said that, some of the values obtained so far (8.4 g/t Au and 315 g/t Ag) are very substantial. The property lies in the right area and has the right ingredients, which is what we need. The similarities with the known deposits on the large scale (overall geological setting) and the small scale (texture of the vein and mineralization) are stunning. Our focus will be to determine, below the silica lithocap, where the level high grade gold/silver occurs. We really believe that Santos, assuming the base case scenario for grade and size, has the potential to turn into a 1 M plus ounce gold equivalent deposit."

Teck Cominco and Paramount have identified a well developed stockwork system composed of 13 quartz-oxide+/-sulphides veins associated to a silica lithocap and hydrothermal breccias. The veins show banded and/or crustiform textures, large calcite crystal pseudomorhs and several events of quartz silica injection and replacement with clay alteration comprising of sericite, illite and kaolinite and patches of silica-alunite which is typical of a well preserved high level, steam heated, low sulphidation hydrothermal system.

The veins occur within two distinct almost perpendicular systems (ENE and NNW) and have been mapped up to 450 m in length and over 0.5 to 6 m in thickness. Paramount's sampling (131 rock samples) yielded the following results: 1.99 g/t Au and 315 g/t Ag. Teck Cominco took 728 samples (rock, soil and silt) within the limits of the property, which have returned up to 8.4 g/t Au and 120 g/t Ag.

About Teck Cominco Limited

Teck Cominco Limited (TSX:TCK.B) is an $18 billion diversified mining company, headquartered in Vancouver, Canada. The company is a world leader in the production of zinc and metallurgical coal and is also a significant producer of copper, gold and specialty metals.

Paramount Gold Highlights

-- Paramount drills additional silver intersects including 354 g/t (11.4 ounces) over 6.6 meters and 263 g/t (8.5 ounces) over 19.7 meters at San Miguel Project in Mexico.

-- Paramount hits 874 g/t (28 ounces) over 5.2 meters and 553 g/t (17.8 ounces) over 6.5 meters at the San Jose zone, San Miguel project in Mexico.

-- Paramount hits gold in 4 of 5 drill holes at Linda property in Peru.

-- Paramount hits 35.5 g/t gold over 4 meters at the San Luis zone, San Miguel project in Mexico.

-- Paramount recruits key geologists from Barrick Gold.

-- Paramount creates the Andean Gold Alliance with Tech Cominco Limited covering 21 properties in Chile, Peru and Argentina.

-- Paramount closes $1,000,000 financing (at) $4.25 with participation by Teck Cominco Limited for 117,500 shares.

-- Paramount hits 11.3 g/t gold across 25.8 meters at the San Luis zone, San Miguel project in Mexico.

About Paramount Gold

Paramount Gold Mining Corp. is a precious metals exploration and development company. It is management's objective to grow Paramount into a significant gold and precious metals producer by developing the Andean Gold Alliance with Teck Cominco in South America, the San Miguel and Linda projects in Mexico and Peru, and by acquiring other advanced-stage projects and/or producing mines in the most prolific precious metal districts in the world. The Company trades on the OTC market under the symbol "PGDP" and on the Frankfurt Exchange under the symbol "P6G". For more information, please visit the Company's web site at: www.paramountgold.com (now available in the following languages: English, German, French, Spanish, and Mandarin).

Safe Harbor Statement under the Private Securities Litigation Reform Act of 1995: The statements contained herein which are not historical are forward-looking statements that are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in the forward-looking statements, including, but not limited to, certain delays beyond the company's control with respect to market acceptance of new technologies or products, delays in testing and evaluation of products, and other risks detailed from time to time in the Company's filings with the Securities and Exchange Commission.