Paramount enters alliance with Mexoro Minerals in Mexico

Paramount Gold and Silver Corp. has signed a Letter of Intent to enter into a strategic alliance with Mexoro Minerals Ltd.

The strategic alliance contemplates both companies combining their mining and exploration expertise including resources such as management, personnel, exploration equipment and mining concessions to maximize shareholder value creating an exciting alignment of interest between the companies.

Both companies operate projects in the Sierra Madre gold-silver belt in Chihuahua, Mexico. The synergy of this transaction will be evident as the companies work together in the Guazapares region.

The companies will also combine Paramount’s recently discovered “Clavo 99″ with Mexoro’s Encino Gordo project for a land package in excess of 1,000 hectares situated immediately east of Coeur d’Alene’s Palmarejo Trogan Project.

In addition, the companies will establish an exploration team to co-develop Paramount’s 86,000 hectare Andrea concession with the neighbouring Mexoro Cieneguita Mine.

Cieneguita was last in production by Glamis Gold Ltd. between 1995 and 1998 prior to its acquisition by Goldcorp Inc.

The agreement calls for Paramount to invest a minimum of $4 million and maximum of $6 million into Mexoro, fixed at a price of $0.50 per unit by June 23, 2008.

Each unit will consist of 1 common share of Mexoro and one half warrant to purchase additional common shares at a price of $0.75 per share exercisable immediately for a period of four years from closing.

Should Paramount subscribe for the maximum, it would receive 12 million shares and 6 million warrants in the offering. The closing price of Mexoro shares quoted on the OTCBB on May 2, 2008 was $0.59 per share.

The Letter of Intent contemplates that Paramount will provide an immediate cash infusion into Mexoro in the amount of $500,000 in the form of a secured convertible debenture bearing interest at a rate of 8% per annum for a term of one year.

Paramount will have the option to convert the debt into units as part of the overall financing. Paramount will retain the first right of refusal on all future financings of Mexoro for a period of four years.