Coeur Mining to Acquire Paramount Gold and Silver

Coeur Mining, Inc. ("Coeur" or the "Company")

today announced it has entered into a merger agreement under which Coeur has agreed to acquire all of the outstanding shares of Paramount Gold and Silver Corp. ("Paramount") (NYSE MKT:

) and

in an all-stock transaction valued at $146 million. Immediately prior to completion of the merger, Paramount will spin-off to its existing stockholders a separate, publicly traded company, expected to be named Paramount Nevada Gold Corp. ("SpinCo"), a subsidiary that owns the Sleeper Gold Project and other assets in Nevada. As part of the transaction, Coeur will provide $10 million in cash to SpinCo and receive a 4.9% common share interest. Key Highlights o Paramount's San Miguel Project (which includes the Don Ese deposit) covers over 121,000 hectares (approximately 299,000 acres) surrounding Coeur's Palmarejo mine complex in Chihuahua, Mexico o The Don Ese deposit extends across a shared property boundary onto Coeur's land holdings at Palmarejo and is located approximately 800 meters from Coeur's Guadalupe deposit, which is currently being developed o Don Ese consists of significantly higher grade silver and gold mineralization than Guadalupe, and is not subject to any non-government third-party royalty or stream obligations o Don Ese represents the southeast extension of Coeur's Independencia structure o Coeur plans to develop Don Ese by a 1,000 meter decline adjacent to the existing Guadalupe surface infrastructure at an initial cost next year of approximately $15 million, and anticipates initial production from Don Ese by the end of 2015, ramping up to 2,500 tons per day by the end of 2017 o Palmarejo's 6,000 ton-per-day processing facility is expected to have excess capacity as open pit production ends in 2015 and as mining activities transition to Guadalupe. As part of Coeur's diligence on the Don Ese deposit, Coeur anticipates recovery rates of approximately 80% for silver and 95% for gold from the deposit o Assuming utilization of excess processing facility capacity, Coeur anticipates the combined Don Ese and Guadalupe deposits could produce an average of approximately six million ounces of silver and 110,000 ounces of gold annually over the next eight years o Coeur has identified significant additional exploration potential on other high-grade structures near the shared property boundary o Paramount's San Miguel project also contains several lower grade deposits which could benefit from cost savings associated with Palmarejo's existing infrastructure and provides Coeur stockholders with optionality on any future increases in silver and gold prices Mitchell J. Krebs, Coeur's President and Chief Executive Officer said, "By adding Paramount's San Miguel Project and particularly the Don Ese deposit to the ongoing mining activities at our Guadalupe deposit, Palmarejo will be well-positioned to remain one of the world's top producing silver and gold mines with significantly higher grades and lower costs. Paramount's Mexican assets strengthen the long‐term viability of Palmarejo throughout the price cycle and enhance Coeur's growth profile. We expect the transaction to lower our overall unit costs, improve our free cash flow in the current metal price environment, and provide near-term growth while preserving our liquidity." Under the terms of the merger agreement: * Paramount stockholders will receive: 0.2016 Coeur shares per Paramount share, equal to $0.90 based on Coeur's 20-day volume weighted average price ("VWAP") of $4.47 as of December 16, 2014, representing a premium of 19.8% to Paramount's 20-day VWAP of $0.75; and * Paramount will spin off its non-Mexican assets and liabilities and $10 million in cash (to be provided by Coeur as part of the transaction) to SpinCo, which is anticipated to apply to list its shares on the NYSE MKT or the Toronto Stock Exchange. Paramount stockholders will receive a pro rata share of the 95.1% of SpinCo shares to be distributed to Paramount stockholders. The exchange of Paramount securities for shares of Coeur common stock is anticipated to be a non-recognition transaction for U.S. income tax purposes. Upon closing of the transaction, it is projected that Coeur will issue approximately 32.7 million shares of common stock to Paramount stockholders. Existing Coeur stockholders will own approximately 76% of the combined entity's outstanding shares and Paramount stockholders will own the remaining approximately 24%. In a separate transaction not conditioned on the successful acquisition of Paramount by Coeur, Coeur has paid $5.25 million for a 0.7% net smelter returns royalty from Paramount's San Miguel project. San Miguel Measured and Indicated Mineralized Material Short Tons Grade (oz/t) (000s) Silver Gold Measured – Don Ese 660 7.42 0.083 Measured – All Other 6,234 1.60 0.031 Indicated – Don Ese 3,094 5.99 0.082 Indicated – All Other 37,537 1.17 0.017 M&I Mineralized Material – Don Ese 3,754 6.24 0.082 Total M&I Mineralized Material 47,525 1.62 0.024 Mineralized material effective July 8, 2014 using a cutoff grade for the underground deposits of 90 grams per tonne AgEq (2.63 ounces per short ton), a cutoff grade for heap leach material of 9 grams per tonne AgEq (0.26 ounces per short ton), and a cutoff grade for the open pit deposit of 25 grams per tonne (0.73 ounces per short tonne). Mineralized material is in addition to mineral reserves and does not have demonstrated economic viability. Rounding of tons, as required by reporting guidelines, may result in apparent differences between tons and grade. For details on the estimation of mineralized material and reserves, including key assumptions, parameters and methods used to estimate the mineralized material, investors should refer to the NI 43-101-compliant Technical Report for San Miguel dated and filed by Paramount August 22, 2014 at sedar.com. Palmarejo Reserves and Measured and Indicated Mineralized Material Short Tons Grade (oz/t) (000s) Silver Gold Underground Reserves: Guadalupe 5,964 3.92 0.056 Palmarejo 2,355 3.98 0.073 Open-Pit Reserves: Guadalupe 420 5.21 0.015 Palmarejo 2,497 2.70 0.022 Total Proven and Probable Reserves 11,235 3.71 0.051 Underground M&I Mineralized Material: Guadalupe 2,457 5.81 0.063 Palmarejo 4,160 6.36 0.104 Open-Pit M&I Mineralized Material: Guadalupe 1,648 3.57 0.035 Palmarejo 507 1.42 0.011 La Patria 17,529 0.56 0.028 Total M&I Mineralized Material 26,301 2.17 0.043 Mineral reserves and mineralized material effective December 31, 2013 using metal prices of $25 per silver ounce and $1,450 per gold ounce for mineral reserves and $29 per silver ounce and $1,600 per gold ounce for mineralized material. La Patria was calculated at $33 per silver ounce and $1,700 per gold ounce for mineralized material. Mineralized material is in addition to mineral reserves and does not have demonstrated economic viability. Rounding of tons, as required by reporting guidelines, may result in apparent differences between tons and grade. For details on the estimation of mineralized material and reserves, including key assumptions, parameters and methods used to estimate the mineralized material, investors should refer to the NI 43-101-compliant Technical Report for Palmarejo dated January 1, 2013 and filed by Coeur February 28, 2013 at sedar.com. Conversion Table 1 short ton = 0.907185 metric tons 1 troy ounce = 31.10348 grams Timeline and Approvals Coeur anticipates closing the transaction in the second quarter of 2015. The transaction requires the approval of Coeur and Paramount stockholders and is subject to Mexican antitrust approval and other customary closing conditions. Members of Paramount's Board and management team and certain stockholders, collectively representing approximately 18.2% of Paramount's outstanding shares, have agreed to vote all of their shares of Paramount common stock in favor of the transaction. Advisors Raymond James Ltd. is serving as financial advisor to Coeur on this transaction and Gibson, Dunn & Crutcher LLP and Goodmans LLP are serving as U.S. and Canadian legal advisors, respectively.