8 November 2011 Gunung Rosa Vein System extended to over 2 kilometres in strike length Highlights Rock chip sample analyses demonstrate high grade gold, silver and base metals which extend the strike length of the main vein system to over 2 kilometres Additional mineralised vein systems located and sampled Geological mapping shows a range of physical and alteration characteristics showing relationship of the mineralised mesothermal system to a porphyry intrusive complex Significant vein and rock chip sample results include: GNR226: 25.7g/t Au; 226g/t Ag; 0.27% Cu; 22.2% Pb; 26% Zn GNR054: 7.07g/t Au; 22g/t Ag; 0.6% Pb; 0.6% Zn GNR055: 6.18g/t Au; 49g/t Ag; 0.3% Pb; 0.3% Zn GNR268: 5.85g/t Au; 28g/t Ag; 0.7% Pb; 0.7% Zn GNR254: 4.18g/t Au; 26g/t Ag; 2.0% Pb; 3.7% Zn GNR170: 1.5m @ 5.51g/t Au; 22g/t Ag; 0.12% Pb; 0.28% Zn GNR279: 3.32g/t Au; 132g/t Ag; 0.25% Cu; 10.7% Pb; 13.5% Zn GNR107: 2.39g/t Au; 58g/t Ag; 3.9% Pb; 10.1% Zn GNR215: 1m @ 2.26g/t Au; 3g/t Ag; 0.7% Pb Diamond drilling continues at Gunung Rosa with ten holes completed Paramount Mining Corporation Limited (ASX:PCP, Paramount, Company ) is pleased to release summary geological plans and analytical results from rock chip sampling of outcrop and old workings located within the Gunung Rosa gold, silver and base metal project in West Java Province, Indonesia. The work was undertaken as part of its due diligence validation program. The high values shown in the rock chip samples away from the main zone of mineralisation support the view that potential mineable resources are likely to exist in other vein systems in the licence. The program is ongoing and new results will be released with they are received. Diamond drilling is continuing along the Cap Palu-Cibitung Zone. Paramount s Chairman, Mr. Mo Munshi commented, The geological mapping and rock chip geochemical results further confirm our belief in the wider potential for significant additional economic gold, silver and base metal mineralisation within the exploitation IUP licence. These results allow us to plan and commence drilling a number of the more promising of these veins, including the extensions to the main Cap Palu to Cibitung vein system currently being drilled by the company. Delineation of other new veins and vein extensions should permit satellite mining operations to be undertaken to increase the overall production rate from within the licence.
Page 2 Geological Mapping Program This release gives some details of geological mapping and geochemical results from sampling completed and compiled to date. The program is ongoing. For personal use only Numerous veins similar in character to the Cap Palu-Cisudi-Cibitung precious and base metal mesothermal mineralisation are recognised within the 2,475 hectare Gunung Rosa exploitation IUP licence. Most lie within a zone extending up to about 1.5 kilometre distance to the east and northeast of the Cap Palu-Cibitung system. Either small scale shallow pitting or short adit development has been undertaken on many of them by local miners in the past. Few have any activity on them today. These have been located, mapped and sampled by Paramount geological staff as part of a licence wide geological mapping project. In addition veins have been located which show little evidence of prospecting. Fresh exposure of country rock is confined to the more deeply eroded and steep sided gullies. Much of the moderate sloping ground is capped by Quaternary-Recent volcanic ash which can locally reach to in excess of 15-20 metres along the margins of the valley systems and these areas are typically used for agricultural purposes (Figure 1). Exposed country rock gives evidence of a deeply eroded intrusive complex environment characterised by massive intrusive andesitic or dioritic porphyritic rocks. These are cut by multiple intrusive breccias and pebble and sand dykes which in turn locally have became the pathway for faults, along which development of the veins and related alteration has occurred (Figure 2). Figure 1: General views of landscape about Cap Palu to Cibitung. (UL) Example of ash cover forming soil profile exposed in old working. (UR) View toward Cap Palu from near Cibitung. Vein lies under ridge line middle distance and extends toward centre left edge of picture (dotted line). It is largely ash covered. Holes GRD004 & GRD005 in valley. Crop is plantation tea. (LL) View to east over drill site GRD007. (LR) View of facilities site at Cap Palu from 1992 development program undertaken by Century Mines & Metals NL. This site will be reused for new development. Access for drilling within tea plantation area has been negotiated.
For personal use only Page 3 Figure 2: Examples of rock exposure. (UL-R) Fault hosting alteration and mineralisation in intrusive rocks exposed in upper slopes of deeply incised eastern side of IUP northeast of Cap Palu. (CL-R) Example of silica-clay-pyrite altered pebble dykes cutting altered intrusive. (LL-R) Intrusive breccias with pebble and sand dykes cutting breccias in drainage line bottom of deeply incised valleys. These features are typical of intrusive porphyry environments and are consistent with the inferred erosional depth of Gunung Rosa along the southern coastal belt of Java.
Page 4 For personal use only These features are also seen in core retrieved during the due diligence drilling being undertaken by Paramount and shown in previous releases. In addition to the obvious macro textures observed there are other micro-textural and mineralisation features that have been observed that characterise the mesothermal setting and its ultimate genetic association within a porphyry intrusive complex environment as expressed in outcrop. Some of the features observed are illustrated below in Figures 3 to 5. Figure 3: Sand dykes filling space between jigsaw breccia fragments in intrusive diorite suggestive of expansion producing a stockwork fabric. This is cut by hydrothermal magnetite veinlets seen as fine darker fracture fill. This rock is not strongly altered away from the magnetite veins. Figure 4: Intensely silicified microdiorite with multiple fracture vein-fill sets. The microfractures post date the silicification event and appear to have a paragenesis sequence of earlier hydrothermal magnetite veinlets (M) cut by pyrite (py) filled then sphalerite (sphal) filled veinlets. (Veinlets about 0.5-1mm wide). Figure 5: Altered (L) and unaltered matrix (R) in intrusive breccia in drill core.
Page 5 A summary of geology, interpreted alteration distribution and type is shown in Figure 6. Also shown is the location of old workings, the main vein systems and the drill hole collars and traces of the due diligence holes drilled or in progress by Paramount. The limits of the IUP are shown by the outer box. Figure 6: Summary geology and alteration map of the Gunung Rosa IUP. Volcanic ash cover restricts mapping access in some sections of the licence area.
Page 6 Geochemical Sampling Program The samples reported in this release include a mix of outcrop float, grab, composite chip and channel samples and underground vein composite chip and grab samples. The purpose of the sampling is to determine the general nature, grade and distribution of geochemical anomalism within the various alteration and vein systems throughout the wider area of the IUP such that patterns of geochemical zonation can be determined to enable work to focus on more gold-enriched targets and to aid the search for new targets. The program, which is ongoing, taken along with the geological mapping, can be considered essentially as a reconnaissance phase in its design. It will however assist in definition of vein targets that will be tested by shallow drilling after completion of the current due diligence validation phase along the strike of the Cap Palu to Cibitung vein system. The main area of interest was subject to detailed soil sampling by Chase Corporation in the mid-1990s looking for extension to the main vein system. This work, noted in a Paramount release to the ASX (8 Sept 2011) outlining the history of the project area, entailed deep WACA drilling to sample palaeosoil and bedrock beneath the young volcanic ash cover. Paramount has acquired the soil data results from this program and has used them as part of its geochemical assessment program. Elements Au, Pb, Zn and As were analysed. Figures 7 and 8 show results for gold and lead from the Chase program. Cap Palu to Cibitung zone boxed - no sampling undertaken Figure 7: Gold analysis results from Chase Corporation soil survey imaged and point plotted.
Page 7 Cap Palu to Cibitung zone boxed - no sampling undertaken Figure 8: Lead analysis results from Chase Corporation soil survey imaged and point plotted. Paramount has analysed its rock and drill core samples for a comprehensive suite of elements by ICP- OES in order to determine levels of potentially deleterious elements in the sulphide ores that might affect the beneficiation methods chosen and ore elements recovered during milling and processing. This includes arsenic, selenium, antimony, cadmium, bismuth in addition to the routine determination of copper, lead and zinc as part of the base metal analysis. Results indicate that the more elevated levels of such elements in potential ores is closely related to samples with in excess of 10-15% combined Pb-Zn with highest values confined to samples with combined Pb-Zn values greater than 30%. Arsenic levels determined in ores typically peak to 3000-5000 ppm (0.3-0.5%) associated with fine grained black arsenopyrite-rich mineralisation occurring in silicapyrite vein fill but values are generally less than about 600 ppm in base metal rich samples, typically falling to well below 100 ppm for the poorly mineralised samples. Cadmium is low except in the very high grade zinc intercepts (>20-30%) where it may reach to >2000 ppm; antimony has reported to several hundred ppm but is generally low; selenium and bismuth are at low ppm levels or absent in the ores. The distribution of values determined from rock samples collected during the field mapping program are summarised in Figures 9-13. Highlights are shown in boxes.
Page 8 Figure 7: Gold rock sample results over geology Gunung Rosa IUP.
Page 9 Figure 8: Silver rock sample results over geology Gunung Rosa IUP.
Page 10 Figure 9: Copper rock sample results over geology Gunung Rosa IUP.
Page 11 Figure 10: Lead rock sample results over geology Gunung Rosa IUP.
Page 12 Figure 11: Zinc rock sample results over geology Gunung Rosa IUP.
Grid Coordinates WGS 84 Zone 48 South Analyses were undertaken by Intertek, Jakarta using 50g fire assay (Method FA50, Aqua regia finish); low base metals by ICP-OES (Method IC01); high base metals (>1%, Method GA50). For further information please contact the undersigned on (08) 9328 5600. Mo Munshi Chairman +61 414 549 329 +86 139 1017 5192 Competent Person Statement The exploration activities and results contained in this report have been reviewed by Dr. Neil F. Rutherford. Dr Rutherford is a Fellow of the Australian Institute of Geoscientists and is a full time employee of Rutherford Mineral Resource Consultants, mineral industry consultants. He has sufficient experience which is relevant to the style of mineralisation and types of deposits under consideration, and to the activity which he is undertaking to qualify as a Competent Person as defined in the December 2004 edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves (the JORC Code). This review and comments by Dr Rutherford incorporated in the release text are based upon field inspection of the Gunung Rosa Project area, West Java, including the drill core during 2011 along with input from his associates who have worked on the property. All of the significant information reported herein was available to Dr Rutherford and was reviewed for this release. Dr. Neil Rutherford has consented to the inclusion in this report of the matters based on this information in the form and context in which it appears.