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Study values Paramount Gold's underground Grassy Mountain mine at US$87.8M

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Study values Paramount Gold's underground Grassy Mountain mine at US$87.8M

An independent pre-feasibility study on Paramount Gold Nevada Corp.'s proposed Grassy Mountain gold mine in Oregon defined an after-tax net present value of US$87.8 million, at a 5% discount rate, with a 27.6% internal rate of return.

The underground operation is expected to produce an annual average 47,000 ounces of gold and 50,000 ounces of silver for 7.25 years, with total cash operating costs of US$528/oz of gold produced net silver credits.

Total CapEx is estimated at just under US$111 million, comprising US$110 million in initial CapEx and US$988,000 in sustaining CapEx, with a 2.5-year payback period from the start of production.

The base case used metal prices of US$1,300/oz of gold and US$16.75/oz of silver.

The analysis includes an initial reserves estimate and an updated resource estimate. Grassy Mountain hosts proven and probable reserves containing 362,000 ounces of gold and 516,000 ounces of silver within 1.6 million tonnes grading 7.23 g/t of gold and 10.29 g/t of silver.

Reserves are included within measured and indicated resources totaling 28.0 million tonnes grading 1.17 g/t of gold and 3.67 g/t of silver, representing 1.1 million ounces of gold and 3.3 million ounces of silver.

Inferred resources are estimated to contain 42,000 ounces of gold and 125,000 ounces of silver within 960,000 tonnes grading 1.37 g/t of gold and 4.08 g/t of silver.

Paramount Gold will continue to work on permitting for the development, aiming to submit a consolidated permit application by the fourth quarter.