Paramount Gold and Silver Corp. Provides Update on Business
Combination
(Thomson Reuters ONE) - OTTAWA, ONTARIO--(Marketwire - July 25, 2009) - Paramount Gold andSilver Corp. (NYSE: PZG)(TSX: PZG)(FRANKFURT: P6G)(WKN: A0HGKQ)("Paramount") announces that Silvercorp Metals Inc. ("Silvercorp")has terminated its unsolicited offer to acquire all the outstandingshares of Klondex Mines Ltd. (TSX: KDX)(OTCBB: KLNDF) ("Klondex").Paramount and Klondex have signed a binding letter agreement (the"Letter Agreement") to combine the two companies under a plan ofarrangement, in a transaction valued at approximately C$80 million(the "Transaction"). Pursuant to the Letter Agreement, each Klondexshare will be exchanged for 1.45 Paramount shares, implying apurchase price of C$2.32 per Klondex share and representing a premiumof 33.3% using closing share prices on the TSX on July 17, 2009.The termination of the Silvercorp unsolicited proposal clears the wayfor the creation of powerful North American gold and silverexploration platform that offers substantial value to both Klondexshareholders and Paramount stockholders:- Strong financial position with a combined cash position of overC$10 million and an additional C$32 million upon the exercise ofcurrently outstanding options and warrants on a fully-diluted basis;- Expanded and diversified operations with the potential forsignificant reserve/resource upside at two flagship projects in NorthAmerica, San Miguel (Mexico) and Fire Creek (Nevada);- Expanded resource base of 1.69 million ounces (indicated) and 3.15million ounces (inferred);- Paramount's experienced personnel are poised to aggressivelyexplore and develop the combined company's flagship projects;- Enhanced market presence with a current pro forma marketcapitalization of approximately C$200 million; and- Strategic position and management experience to enhance marketvaluation of the combined entity under Paramount.Both Paramount and Klondex have agreed to obtain support agreementsfrom each of their respective directors and certain of theirshareholders to vote any shares which they control in favor of theTransaction, subject to certain exceptions contained therein. TheTransaction is subject to customary approvals including shareholderapprovals by both companies.FCMI Financial Corp., a corporation controlled by Albert D. Friedbergand Paramount's largest stockholder, has committed to provide aminimum of $5 million and up to a maximum of $15 million to fundfuture development at both the San Miguel and Fire Creek Projects.For further details of the Transaction, please see theParamount/Klondex joint news release dated July 20, 2009, Paramount'sfilings with the United States Securities and Exchange Commission(the "SEC") available on www.sec.gov and the applicable Canadiansecurities regulators available on www.sedar.com and Klondex'sfilings with the applicable Canadian securities regulators availableon www.sedar.com.About Paramount Gold and Silver Corp.Paramount Gold and Silver Corp. is a precious metals explorationcompany listed on the Toronto Stock Exchange and the NYSE Amex underthe symbol "PZG", and listed on the Deutsche Borse under the symbol(WKN: A0HGKQ).Paramount holds a 100% interest in the San Miguel Project and hascompleted 47,560 meters of diamond drilling on 213 holes and 3,743meters of exploration trenching at San Miguel since the summer of2006. Paramount has recently expanded its land holdings by acquiringa 100% interest in the Temoris Project from Garibaldi Resources; aland package of over 54,000 hectares. Paramount's land package nowincludes most of the ground surrounding Coeur d'Alene Mines (NYSE:CDE) Palmarejo Mine project and is in excess of 140,000 hectares. Formore information, visit www.paramountgold.com. The information onParamount's website is not, and shall not be deemed to be, a part ofthis release or incorporated into any filings with the SEC orCanadian securities regulatory authorities.Additional Information About the Transaction and Where to Find ItIn connection with the Transaction, Paramount expects to file withthe SEC a proxy statement which will be sent to the shareholders ofParamount seeking their approval of the merger. In addition,Paramount may file other relevant documents concerning theTransaction with the SEC. Security holders are urged to read theproxy statement and other relevant documents when they becomeavailable because they will contain important information about theTransaction.Security holders of Paramount may obtain free copies of thesedocuments through the website maintained by the SEC athttp://www.sec.gov. Security holders of Paramount may also obtainfree copies of these documents by directing a request by telephone ormail to Paramount Gold and Silver Corp., 346 Waverley Street, Suite100, Ottawa, Ontario Canada K2P OW5 (telephone: (613) 226-9881) or byaccessing these documents at Paramount's website:www.paramountgold.com under "Investors". The information onParamount's website is not, and shall not be deemed to be, a part ofthis release or incorporated into other filings made with the SEC orCanadian securities regulatory authorities.Paramount and its directors, executive officers and members ofmanagement may be deemed to be participants in the solicitation ofproxies from the stockholders of Paramount in connection with theTransaction. Information about the directors and executive officersof Paramount is set forth in the proxy statement for its 2009 annualmeeting of shareholders filed with the SEC on January 8, 2009 and inits Form 8-K filed with the SEC on March 23, 2009. Informationregarding the interests of these participants and other persons whomay be deemed participants in the Transaction may be obtained byreading the proxy statement regarding the Transaction when it becomesavailable.Cautionary Note to U.S. Investors Concerning Estimates of Indicatedand Inferred Resources: This press release uses the terms "indicatedresources" and "inferred resources". We advise U.S. investors thatwhile these terms are defined in and permitted by Canadianregulations, these terms are not defined terms under SEC IndustryGuide 7 and are normally not permitted to be used in reports andregistration statements filed with the SEC. "Inferred resources" havea great amount of uncertainty as to their existence, and greatuncertainty as to their economic and legal feasibility. It cannot beassumed that all or any part of an inferred mineral resource willever be upgraded to a higher category. Under Canadian rules,estimates of inferred mineral resources may not form the basis of afeasibility study or prefeasibility studies, except in rare cases.The SEC normally only permits issuers to report mineralization thatdoes not constitute SEC Industry Guide 7 compliant "reserves" asin-place tonnage and grade, without reference to unit measures. U.S.investors are cautioned not to assume that any part or all of mineraldeposits in this category will ever be converted into reserves. U.S.investors are cautioned not to assume that any part or all of aninferred resource exists or is economically or legally minable.SAFE HARBOR FOR FORWARD-LOOKING STATEMENTSStatements in this document regarding the Transaction, the expectedtimetable for completing the Transaction, benefits and synergies ofthe Transaction, future opportunities for the combined company,expectations regarding the value and benefits of the Transaction andany other statements about Paramount or Klondex managements' futureexpectations, beliefs, goals, plans or prospects constituteforward-looking statements within the meaning of the United StatesPrivate Securities Litigation Reform Act of 1995 and statementscontaining the words "believes," "plans," "anticipates," "expects,"estimates and similar expressions) should also be considered to beforward-looking statements. There are a number of important factorsthat could cause actual results or events to differ materially fromthose indicated by such forward-looking statements, including, butnot limited to: the ability of the parties to consummate theTransaction and satisfy the conditions thereunder; the ability toobtain, and the timing of, the necessary exchange, regulatory andshareholder or stockholder approvals for the Transaction; the impactof any actions taken by Silvercorp. or any other party to complicate,delay or prevent the Transaction; the ability to realize theanticipated synergies and benefits from the Transaction and thecombined company; and the other factors described in Paramount'sAnnual Report and Annual Information Form on Form 10-K for the yearended June 30, 2008 and its most recent quarterly reports filed withthe SEC available on www.sec.gov and applicable Canadian securitiesregulators available on www.sedar.com and Klondex's filings with theapplicable Canadian securities regulators available on www.sedar.com.Except as required by applicable law, each of Paramount and Klondexdisclaim any intention or obligation to update any forward-lookingstatements as a result of developments occurring after the date ofthis document.Contacts:Paramount Gold and Silver Corp.Christopher Crupi, CEO866-481-2233 / 613-226-9881This announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 25.07.2009 - 09:57 Uhr
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