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High-Grade Intersections at Gunung Rosa

Highgrade intersections at Gunung Rosa Highlights New assay results received confirm highgrade mineralisation at Gunung Rosa in first stage due diligence drilling program Initial 6hole program now extended to 12 holes Intersections include GRD003 2.55m 1.42 g/t, 1.4 g/t Ag, 0.35% Zn GRD004 3.0m 26.55 g/t Au, 29.60 g/t Ag, 0.29% Zn and 0.68% Cu Including 1.5m 31.95 g/t Au, 38.65 g/t Ag, 0.33% Zn and 0.95% Cu Including 0.75m 41.10 g/t Au, 69.10 g/t Ag, 0.41% Zn and 1.31% Cu GRD005 17.1m 5.82 g/t Au, 23.36 g/t Ag, 5.5 % Zn and 0.49% Cu Including 9.0m 10.59 g/t Au, 37.33 g/t Ag, 8.76% Zn and 0.82% Cu with 1.0m 26.25 g/t Au, 100.45 g/t Ag, 22.95% Zn and 1.65% Cu and with 0.5m 43.20 g/t Au, 108.00 g/t Ag, 21.70% Zn and 1.73% Cu also 3.4m 17.51 g/t Au, 39.79 g/t Ag, 7.07% Zn and 0.93% Cu Including 1.6m 34.80 g/t Au, 62.75 g/t Ag, 8.11% Zn and 1.21% Cu Paramount Mining Corporation Limited (PCP, Paramount, Company) is pleased to announce assay results from diamond drillholes GRD003, GRD004 and GRD005 from the first stage of its due diligence drilling at its Gunung Rosa goldsilver project in West Java Province, Indonesia, announced to the ASX on 8 September 2011. The results build on the very encouraging results from the first two diamond drillholes (GRD001 and GRD002) disclosed in the Companys 12 September 2011 announcement. Hole GRD003 further tested the vein system at Cap Palu and holes GRD004 and GRD005 tested southward into the base metalrich Cisudi section of the vein as shown in Figure 2 below. The drilling program has been extended from an initial 6 holes to a 12hole program.

Holes GRD006, GRD007 and GRD008 have been completed but assay results have not yet been received. Currently hole GRD009, the first of a series to test the vein system persistence to greater depth, is in progress. Paramounts Chairman, Mr. Mo Munshi commented, What we continue to see in these results is confirmation of the recognised gold mineralisation at Cap Palu, the original mine site and in the highgrade goldsilver and base metalrich Cisudi and Cibitung extensions of the recognised 900 metre vein to the south.

The results determined so far give the 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 subject to satisfactory results from our metallurgical testing of bulk samples due to commence shortly. Our approach to this will likely be based on the successful exploitation model adopted by Kingsrose Mining for theirWay Linggo operation in Sumatra and Medusa at their CoO deposit in the Philippines. About the Gunung Rosa GoldSilver Project The 2,475 hectare Gunung Rosa exploitation licence (Production Operation 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 goldsilver and base metal mesothermal vein system in excess of 900 metres in strike length which is open along strike and to depth.

Approximately 63 drill holes have been drilled into the vein and 2,500 metres of underground horizontal and vertical development undertaken by previous explorers and local mining interests. There are numerous other occurrences of vein mineralisation of similar style recognised within a 5 kilometre radius about Cap Palu and these are currently being mapped and sampled by Paramount geological staff as part of a licence wide geological mapping project. Progress results from this program will be released shortly when mapping and geochemical data has been compiled. Summary of Drill Core Geology There are contrasting vein, mineralisation and alteration styles observed between the Cap Palu section of the vein system and that seen in the Cisudi and Cibitung section to the south. The veins are multiphase in character and there are marked differences in the relative abundance of base metals and associated precious metal grades between the two sections and in the character of the vein development within the vein along its strike. Cap Palu section veins tend to be narrower and feather to some extent giving rise to a more diffuse network of veins often with cockade quartz lining the veins within a broad alteration halo but nonetheless with persistent gold grade as demonstrated from previous exploration drilling results shown in earlier releases but of lower overall tenor relative to the CisudiCibitung section (Figures 6 7).

The vein styles and pattern of mineralisation at Cap Palu suggest a more restricted fluid flow despite the widespread alteration and possibly a late quartz fill event in response to late or postmineral deformation. The Cap Palu area is cut by a series of vein offset faults and this complicates the geological interpretation. Understanding the structural setting is significant in terms of approach to a mining strategy and the geotechnical implications of this are being reviewed for the Cap Palu section of the vein. Faulting does not appear to be an issue for sections of the vein away from the Cap Palu area from a mining perspective.

The lowest grade zone at Cap Palu appears to be the location where Century Mining undertook the decline development at the site in 19911992. The southern CisudiCibitung section of the vein zone as seen in holes GRD004 and GRD005 generally carries a significantly higher base and precious metal content with a variable copper content which increases southward toward Cibitung (Figure 9). In some sections however the highest precious metal grades associate with low base metal banded silicapyrite zones somewhat analogous in character to an epithermal vein (Figures 11 12). At Cap Palu base metal content is relatively low and copper, sometimes as massive chalcopyrite in veins with pyrite, is proportionately higher and is also associated with pyrite in wall rock alteration. In the south the veins appear physically more highly constrained by competent massive wall rock intrusives, intrusive breccias, pebble dykes and hydrothermal breccias and likely accounts for the higher grade and well banded nature of the mineralisation within the brittle tensional faults cutting these, (Figures 8 to 10).

In holes GRD004 and GRD005 the veins host distinctive banded chalcedonylow sulphide fill (Figure 12, right) which is absent from the Cap Palu section. The veins in the CisudiCibitung zone also sit within what appears to be a broad halo of an early prevein pyritemarcasite envelope within breccias with or without associated carbonate veins. The extent and ultimate cause of this alteration is yet to be fully assessed and resolved. The range of mineralogical associations observed within the veins will require careful metallurgical optimisation testing to maximise precious metal recovery.

Given the high precious metal values base metal recovery is of lower priority. This test work is to commence shortly. For further information please contact the undersigned on (08) 9328 5600. Mo Munshi Chairman 61 414 549 329 86 139 1017 5192.