McFarlane Lake Mining Limited press release

Paramount Gold Reports on Five More Trenches in the San Antonio - Carmen Zone with Assays up to 887 Grams Silver at the San Miguel Project, Mexico

2007-01-02

CSE - Canadian National Stock Exchange · Gold · Copper · Cobalt · Nickel · Arsenic · Canada

CHIHUAHUA, MEXICO, January 2 /CNW/ - Paramount Gold Mining Corp. (OTC:PGDP) (Frankfurt:P6G) (WKN:A0HGKQ) is pleased to release the results of a trenching program in the central part of its San Miguel concession block near Temoris, Chihuahua, Mexico. The five trenches reported are located in the San Antonio - Carmen zone which is adjoining and to the north of the San Luis zone where Paramount reported drill results that included 35.5 g/t gold across 4.0 meters (see news release dated August 1 2006).

Trenches nine through thirteen span approximately 175 meters along strike on the San Antonio - Carmen zone. Trench ZSA-09 starts approximately 50 meters north from trench ZSA-08 (88.4 meters averaging 50.2 g/t silver, including 1.0 meters of 1,300 g/t silver). Trench ZSA-10 is approximately 90 meters north of ZSA-09. Trenches ZSA-11 and ZSA-13 continue across strike to the west of ZSA-10 with approximately 50 meters between them. Trench ZSA-12 is approximately 70 meters north of ZSA-10.

Paramount's Manager of Exploration in Mexico, Bill Reed, commented: "The trenching results at San Antonio compare very well with earlier trenches in the San Luis, San Jose and La Union zones. These recently completed trenches in the San Antonio - Carmen zone have exposed a series of sub-parallel en echelon veins that extend 175 meters to the north of those previously reported trenching results with a width of more than 200 meters. This confirms our prior observation that this mineralized system is strengthening to the north. We will continue drilling this zone immediately after the start of the New Year."

The highlights of the trenching include:

ZSA-09 - 61.9 meters averaging 79.0 g/t Ag, including 2.1 meters of 625 g/t Ag with 1.24% lead, and 1.0 meters of 887 g/t Ag with 5.59% lead.

ZSA-10 - 36.5 meters averaging 56.3 g/t Ag, including 17.5 meters of 87 g/t Ag.

ZSA-12 - 30.0 meters averaging 87.7 g/t Ag, including 3.0 meters of 422 g/t Ag, and 7.0 meters of 195 g/t Ag with 1.6% zinc.

ZSA-13 - 1.0 meters 62.0 g/t Ag and 0.79% lead.

The trenches are excavated to a depth of 2-3 meters and extend from west to east across the quartz veins and stockwork quartz veins that host silver and gold mineralization in the Guazapares mining district. The trenches were cut through thin overburden to better define drill targets and spaced approximately 50 to 75 meters apart. The geology of the trenches is mapped in detail and continuous rock chip samples of no more than one meter in length are collected from the trench walls.

Drill holes have been completed on the San Antonio zone based on the trench assays listed below and the drill will continue to move north along the mineralized zone as defined by the trenches.

Area Trench From To Interval Au Ag AuE Pb Zn (m) (m) (m) (g/t) (g/t) (g/t) (%) (%) San Antonio ZSA-09 10.10 44.20 34.10 0.00 58.00 0.97 44.20 46.30 2.10 0.00 625.00 10.42 1.24 0.20 46.30 63.00 16.70 0.00 25.00 0.41 63.00 64.00 1.00 0.00 887.00 14.78 5.59 0.17 64.00 72.00 8.00 0.00 39.00 0.65

Average 10.10 72.00 61.90 0.00 79.00 1.32 0.21 0.17

San Antonio ZSA-10 25.00 44.00 19.00 0.00 28.00 0.47 0.08 0.15 44.00 61.50 17.50 0.00 87.00 1.46 0.10 0.16 Average 25.00 61.50 36.50 0.00 56.30 0.94 0.09 0.15

San Antonio ZSA-11 7.00 10.00 3.00 0.00 30.00 0.50 0.10 0.15 19.00 28.00 9.00 0.00 11.00 0.18 0.05 0.11 43.00 63.00 20.00 0.00 13.00 0.21 0.01 0.10

San Antonio ZSA-12 10.00 13.00 3.00 0.00 422.00 7.04 0.20 0.55 33.00 40.00 7.00 0.00 195.00 3.25 0.17 1.60 40.00 56.00 16.00 0.00 12.00 0.20 0.15 0.03 Average 10.00 49.00 30.00 0.00 87.70 1.46 0.06 0.43

San Antonio ZSA-13 24.50 25.50 1.00 0.00 62.00 1.01 0.79 0.08 48.50 61.50 13.00 0.00 8.00 0.14 0.03 0.09

Quality Control Person

C.W. (Bill) Reed, B. Sc. Mineralogy, is acting as qualified person and has prepared the detail and review with respect to this news release.

Recent Paramount Gold Highlights

12/20/06 Appoints new senior mining executive 12/14/06 Extends Zone 800 meters 12/11/06 Strengthens team with addition of COO and independent director 12/06/06 Commissions independent NI-43101 Technical Report to establish first Gold/Silver resource at San Miguel, Mexico 11/08/06 Strike zone extended 500 meters with Polymetallic intersects 10/13/06 Announces Above-Market $1 Million Financing at $2.60 Per Share 10/12/06 Drills 6.7 g/t Gold Equivalent over 17.6 Meters and 4.8 g/t Gold Equivalent over 16.4 Meters at San Miguel 10/10/06 Acquires an 80% Interest in over 6,000 Hectares Surrounding San Miguel Project in Mexico 9/27/06 Outlines a High Potential Gold-Silver Target at Santos, Peru 9/21/06 Drills silver intersects of 354 g/t (11.4 ozs) over 6.6 meters and 263 g/t (8.5ozs) over 19.7 meters at San Miguel. 9/19/06 Trench Results at San Miguel, Mexico, Extend Silver/Gold Zone another 175 Meters 9/14/06 Drills 874 g/t (28 ozs) silver over 5.2 meters and 553 g/t (17.8 ozs) over 6.5 meters at the San Jose zone, San Miguel 8/10/06 Hits gold in 4 of 5 drill holes at Linda property in Peru. 8/2/06 First drill results at San Miguel Project in Mexico include bonanza gold grade of 35.5 g/t gold over 4 meters 6/29/06 Recruits key geologists from Barrick Gold. 6/28/06 Identifies 5 High Priority Properties in Argentina and Chile 5/17/06 Creates the Andean Gold Alliance with Tech Cominco Limited covering 21 properties in Chile, Peru and Argentina. 5/12/06 Closes $1,000,000 financing @ $4.25 with participation by Teck Cominco Limited for 117,500 shares. 5/03/06 Acquires 100,000 Hectares in Sierra Madre Gold-Silver Belt, Between the Guazapares and El Sauzal Mining District, Mexico 2/22/06 Channels 11.3 g/t gold across 25.8 meters at the San Luis zone, San Miguel project in Mexico.

About San Miguel

San Miguel is currently comprised of 16 concessions covering an estimated 6 kms strike of silver and gold mineralization. It is located in Chihuahua, Mexico and lies in the Guazapares mining district, part of the gold-silver belt of the Sierra Madre Occidental. Paramount signed an agreement in August 2005 with Amermin S.A. de CV, a subsidiary of Tara Gold Resources, to acquire a 70% interest in the San Miguel project.

About Paramount Gold

Paramount Gold is a precious metals exploration company listed on the OTCBB under the symbol PGDP and on the Frankfurt stock exchange under the symbol P6G (WKN:A0HGKQ). The Company's objectives are to a) aggressively explore and develop the San Miguel project, located in Chihuahua, Mexico within the Sierra Madre Occidental gold/silver belt; and b) fully develop the potential of the strategic alliance with Teck Cominco for gold exploration in South America. 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.