Paramount Gold and Silver Corp (Ticker: PZG $1.03) PZG- Recap of Events; Updating Estimates Reflecting 3Q14 results

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1 Company Update United States of America Metals and Mining Bhakti Pavani, , Sales & Trading Price $ Week Range ($ $1.72) Price Target $1.60 Market Cap (mil) $ Shares out (mil) Mo Avg Vol 698,750 Cash per share $0.06 Total Debt (mil) $0.00 Debt/Equity 0% EPS $ Yr Jun 2013A 2014E 2015E Actual Curr Prev Curr Prev YEAR (0.09)A (0.08)E (0.10)E Revenues (millions) $ Yr Jun 2013A 2014E 2015E Actual Curr Prev Curr Prev YEAR 5A 0E 0E Year ended June 30 Paramount Gold and Silver Corp (Ticker: PZG $1.03) Buy PZG- Recap of Events; Updating Estimates Reflecting 3Q14 results Over the past few months, Paramount has provided several updates on its drilling program at its 100% owned San Miguel project in Mexico & Sleeper project in Nevada. On May 1, Paramount announced discovery of a new silver/gold zone, "Sota Del Oro," at San Miguel in Mexico. The new zone, which is located to the south of the richly endowed Guazapares Megastructure (7.5 km long), one of the longest continuously mineralized corridors in the Sierra Madre Metallogenic Belt, adds approximately 2.5 km of prospective strike to the known Guazapares corridor (refer Exhibit 2). A total of 10 holes drilled over a strike length of 450 meters on the zone returned intervals grading up to 12.0 g/t of gold and 3,335 g/t of silver. Of a particular note, was the hole LU-85 which returned interval of 15 meters grading 1.46 g/t of gold and 646 g/t of silver, representing a g/t gold equivalent at a 1 to 60 goldto-silver ratio. Additionally, the drill hole LU-79 intersected many narrow structures and one large intercept of 27.6 meters grading 1.39 g/t of gold and 49.6 g/t of silver, a 2.23 g/t gold equivalent grade. On April 1, Paramount announced assay results from 19 holes drilled by the previous operator on the Company s 100% owned Sleeper Project in Nevada. In 2013, the Company commenced a program of re-logging the ore from 54 holes drilled by the previous operator. The samples & intervals obtained from the holes were never assayed. Instead, the unassayed intervals were entered into the database with no grade or an assumed grade of zero. A total of 1,846 samples were collected (from 40 holes), of which 383 samples (19 holes) reported a weighted average grade of 0.49 g/t of gold and 1.9 g/t of silver. Furthermore, 5% of the samples returned grades over 0.5 g/t of gold and an average of 1.23 g/t and 2.2 g/t of silver. The assayed results from 19 holes with an additional data collected from 33 holes drilled by the Company (from 2012 to date) is expected to add significant resources into the PEA study expected to be completed in June On March 31, Paramount announced 3Q14 results. We have updated our model to reflect the updated cash & debt position. On Feb 25, Paramount announced completion of a 16 hole drilling program on the Don Ese deposit at San Miguel in Mexico. The last two infill holes (DS-044 & DS-045) drilled on the deposit returned high grades of silver and gold. The drill hole DS-044 intersected 18 meters of 4.46 g/t of gold and g/t of silver including a central portion of 3.4 meters grading g/t of gold with 1,873.6 g/t of silver. On the other hand, the drill hole DS-045 intercepted two zones of higher silver and gold grades within the main Don Ese vein including 7.7 meters of 2.31 g/t of gold and Ag g/t of silver and 6.2 meters of 0.65 g/t of gold and g/t of silver. We reiterate our BUY rating on Paramount Gold shares, which are currently trading at a 35.6% discount to our unchanged price target of $1.60. We believe that the recent drilling program completed on the Don Ese deposit should add new resources to the updated PEA study expected to be completed in June Also, we expect the Company to continue to focus on the San Miguel Project, while conserving as much cash as feasible given current economic conditions throughout the mining industry. Please refer to important disclosure information and Regulation Analyst Certification found on pages 5-6 of this report.

2 Investment Summary: Paramount is currently trading at a 35.6% discount to our NAV estimate of $1.57 per share, rounded off to $1.60 per share. We derive this NAV utilizing a long-term gold price of $1,200 and a long-term silver price of $20. We currently utilize a discount rate of 12% for the San Miguel project in addition to a 13% discount rate for the Sleeper project, given the slightly higher risks associated with the Sleeper property and the non-producing nature of both assets. Overall, our NAV accounts for Paramount s relatively diverse asset base, coupled with the mining friendly jurisdictions in which the firm operates and a proven management team. Valuation: We currently value the San Miguel property at $130 million, or $0.82 per share. This figure is based on a 12% discount rate for the project, with first production in 2017 and long-term gold and silver prices of $1,200 and $20 per ounce, respectively. We currently value the Sleeper property at $112 million, or $0.70 per share. This figure is based on a 13% discount rate for the project, with first production in 2017 and long-term gold and silver prices of $1,200 and $20 per ounce, respectively. We value the remaining assets of the firm, including net cash, the exploratory assets and other corporate costs at $7 million, or $0.05 per share. This derives our overall NAV of $250 million, or $1.57 per share. We assign a 1.0x multiple on our NAV for a final price target of $1.57 per share rounded off to $1.60 per share. Risks to achievement of target price: Both projects have a relatively long lead-time to first production. Sleeper and San Miguel will take several years to enter production, and given current uncertainty in the financial markets towards mining stocks, the company may face funding issues or a overall lack of investor interest for long lead-time projects. Paramount Gold has several foreign investment risks related to royalties and other geopolitical risks. Paramount Gold could potentially incur royalties, non-renewal of its operating licenses or even face the threat of having its assets nationalized by the Mexican Government if it becomes strapped for cash. We note that we consider this risk to be reasonably remote, especially considering Mexico has been a member of the World Trade Organization ( WTO ) since 1995 and has been open to foreign businesses operating in their respective countries over the past several years. Paramount Gold might face funding issues. The firm currently derives no cash-flow from its exploratory properties. Therefore, management has to either raise funds or sell assets to fund operations. Notably, given current cash levels, we do not expect any imminent cash issues for the firm. The company may be forced into a disadvantageous joint venture or other partnership with a major mining company. Both of Paramount s projects are located in close proximity to larger companies and their respective projects, which may force the firm to enter an agreement with only a minority interest, or a lack of control with one of the larger companies taking over the project due to funding issues in order to enter production. Investors may be unable or unwilling to invest in international stocks. Some investors are unable or unwilling to invest in shares of companies listed and based outside of the United States. Although these companies have strong potential and potentially offset any domestic economic declines, the fact that some investors are unable to invest in Paramount Gold shares due to its international nature remains. Company description: Paramount Gold and Silver Corp. (Paramount) is an exploration stage mining company with projects in northern Nevada and Chihuahua, Mexico. Through its wholly owned Mexican subsidiary, Paramount Gold de Mexico S.A. de C.V., the Company owns a 100% interest in the San Miguel property. The San Miguel Project is located in southwestern Chihuahua in Northern Mexico. The project is about 20 kilometers north of the town of Temoris, adjacent to the village of Guazapares. It is in the Guazapares mining district, which is part of the Sierra Madre Occidental gold-silver belt. The San Miguel project consisted of 17 smaller concessions clustered near Guazapares, Chihuahua with a total area of 427 hectares, plus the much larger Andrea, Gissel and Isabel concessions. Page 2 of 6

3 Exhibit 1: Paramount Gold & Silver NAV Model 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E San Miguel Project Tonnes processed (in '000s) ,477 1,443 1,462 1,463 1,473 1,447 1,402 1,543 1,460 1,464 1, Gold recovery 0% 0% 0% 85% 94% 94% 94% 94% 94% 93% 94% 94% 94% 94% 91% 93% 84% Gold grade (g/t) Annual gold production ('000s oz) % Growth 41% 79% 15% 0% -16% 7% -14% -19% 0% -30% -66% 65% -78% Gold sales prices 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Silver recovery 0% 0% 0% 71% 43% 67% 69% 60% 67% 66% 40% 39% 47% 73% 80% 84% 81% Silver grade Annual silver production ('000s oz) ,893 1,993 2,964 3,504 3,215 3,343 3,465 2,390 2,418 2,611 2,729 1, ,473 % Growth -49% 49% 18% -8% 4% 4% -31% 1% 8% 5% -29% -52% 57% Silver sales price Gold:Silver ratio Gold equivalents Total Gold equivalents ('000s oz) % Growth -18% 66% 16% -3% -9% 6% -21% -12% 3% -16% -47% -16% -24% Total gold cash cost (320) (509) (616) (519) (395) (379) (453) (466) (508) (507) (507) (507) (507) (507) (507) Gross profit (in '000s) 0 67,665 46,657 90, , , , ,419 78,832 69,844 72,185 60,863 32,371 27,129 20,573 CapEx (in '000s) (4,000) (9,000) (180,000) (60,000) (40,000) (30,000) (20,000) (20,000) (20,000) (15,000) (15,000) (15,000) (8,000) (4,000) (55) (30) 13,729 Tax (in '000s) 24% 960 2,160 43,200 (1,840) (1,598) (14,532) (25,083) (24,725) (19,609) (21,701) (15,320) (13,162) (15,404) (13,647) (7,756) (6,504) (8,232) Operating cash flow (3,040) (6,840) (136,800) 5,825 5,059 46,018 79,428 78,294 62,095 68,719 48,512 41,681 48,780 43,216 24,560 20,595 26,069 Cash flow discount rate 12% Present value of opening cash flow (3,813) (7,661) (136,800) 5,201 4,033 32,755 50,478 44,426 31,459 31,085 19,593 15,031 15,706 12,424 6,304 4,720 5,334 Total current cash flow 130,275 Fully diluted shares 159,612 Project NAV per share $ 0.82 Sleeper Project 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E Tonnes processed (in '000s) ,200 29,200 29,200 29,200 29,200 29,190 29,200 29,200 29,200 29,190 29,200 29,250 24,610 29,200 15,900 Gold recovery 0% 0% 0% 65% 63% 81% 77% 67% 74% 73% 71% 86% 77% 87% 82% 75% 57% 75% Gold grade (g/t) Annual gold production ('000s oz) % Growth 35% -20% 8% -6% -7% 2% -5% 7% -4% -7% -1% 3% -9% -24% Gold sales prices 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 Silver recovery % 9% 10% 11% 11% 10% 10% 11% 10% 10% 10% 10% 11% 12% 10% Silver grade (g/t) Annual silver production ('000s oz) % Growth 25% 5% -30% -15% 6% 2% -34% 77% -24% 40% -4% -34% -30% 18% Silver sales price Gold:Silver ratio Gold equivalents Total Gold equivalents ('000s oz) % Growth 34% -19% 7% -6% -7% 2% -6% 9% -4% -6% -1% 2% -10% -24% Total gold cash cost (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) (705) Gross profit (in '000s) 97, , , , ,706 98, ,192 94, ,474 98,196 92,360 91,007 93,066 84,031 64,069 CapEx (in '000s) (1,500) (2,500) (346,000) (35,000) (30,000) (25,000) (25,000) (25,000) (25,000) (25,000) (25,000) (25,000) (25,000) (20,000) (20,000) (20,000) (15,000) (15,000) Tax (in '000s) 24% ,040 (14,898) (24,099) (19,405) (21,116) (19,369) (17,680) (18,046) (16,652) (18,594) (17,567) (17,366) (17,042) (17,536) (16,567) (11,776) Operating cash flow (1,140) (1,900) (262,960) 47,176 76,313 61,450 66,868 61,336 55,986 57,146 52,730 58,880 55,629 54,993 53,965 55,530 52,464 37,292 Cash flow discount rate 13% Present value of opening cash flow (1,456) (2,147) (262,960) 41,749 59,764 42,588 41,011 33,291 26,891 24,291 19,835 19,600 16,388 14,337 12,450 11,337 9,479 5,963 Total current cash flow 112,410 Fully diluted shares 159,612 Project NAV per share $ 0.70 COMBINED 2014E 2015E 2016E 2017E 2018E 2019E 2020E 2021E 2022E 2023E 2024E 2025E 2026E 2027E 2028E 2029E 2030E 2031E Annual gold production Annual silver production ,897 1,998 2,969 3,507 3,218 3,346 3,468 2,392 2,422 2,614 2,733 1, ,475 36,890 Total gold equivalents ,420 PV of cash flow from San Miguel (3,813) (7,661) (136,800) 5,201 4,033 32,755 50,478 44,426 31,459 31,085 19,593 15,031 15,706 12,424 6,304 4,720 5,334 0 PV of cash flow from Sleeper (1,456) (2,147) (262,960) 41,749 59,764 42,588 41,011 33,291 26,891 24,291 19,835 19,600 16,388 14,337 12,450 11,337 9,479 5,963 Total PV of operating cash flow (5,269) (9,808) (399,760) 46,950 63,797 75,342 91,489 77,717 58,351 55,375 39,428 34,631 32,093 26,760 18,754 16,057 14,813 5,963 Current value of cash flows 242,685 Plus cash & equivalents 4,819 Plus exploratory assets 2,532 Less debt 0 7, Total current value 250,036 Common shares 155,731 diluted Warrants 0 Options 5,718 Fully diluted shares 159,612 PZG share price in $ $ 1.03 PZG NAV in US$ $ % discount to NAV NAV Premium for target price 0% Price target $ % discount to rounded PT Page 3 of 6

4 Exhibit 2: Highlighted in the map is the new zone Sota De Oro Page 4 of 6

5 Important Research Disclosures Distribution of Ratings/IB Services Euro Pacific Capital IB Serv./Past 12 Mos. Rating Count Percent Count Percent BUY [BUY] SPECULATIVE BUY [SB] HOLD [NEUTRAL] SELL [SELL] NOT RATED [NR] Disclosures Euro Pacific expects to receive or intends to seek compensation for investment banking services from all companies under research coverage within the next three months. Euro Pacific or its officers, employees or affiliates may execute transactions in securities mentioned in this report that may not be consistent with the report s conclusions. Regulation Analyst Certification ("Reg AC") Bhakti Pavani, The views expressed in this report (which include the actual rating assigned to the company as well as the analytical substance and tone of the report) accurately reflect the personal views of the analyst(s) covering the subject securities. An analyst's sector is the universe of companies for which the analyst provides research coverage. Accordingly, the rating assigned to a particular stock represents solely the analyst's view of how that stock will perform over the next 12 months relative to the analyst's sector average. No part of the compensation of the analyst preparing this report was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed by such analyst in this report. Ratings Buy: Expected to materially outperform sector average over 12 months and indicates total return of at least 10% over the next 12 months. Neutral: Returns expected to be in line with sector average over 12 months and indicates total return between negative 10% and 10% over the next 12 months. Sell: Returns expected to be materially below sector average over 12 months and indicates total price decline of at least 10% over the next 12 months. Page 5 of 6

6 Speculative Buy: Expected to materially outperform sector average over 12 months and indicates total return of at least 25% if certain factors materialize, with potential for high return volatility and greater than average risk for lower or negative total annual returns over this time period. Volatility Index 1 (Low): Little to no sharp movement in stock price in a 12 month period 2 (Low to medium): Modest changes in stock price in a 12 month period 3 (Medium): Average fluctuation in stock price in a 12 month period 4 (Medium to High): Higher than average changes in stock price in a 12 month period 5 (High): Extremely sharp movements in stock price in a 12 month period All financial information is taken from company disclosures and presentations (including Form 10Q, 10K and 8K filings and other public announcements), unless otherwise noted. Any prices or quotations contained herein are indicative only and are not a commitment by Euro Pacific to trade at any price. Euro Pacific may trade as principal in instruments mentioned herein. This commentary is therefore not independent from the proprietary interests of Euro Pacific, which interests may conflict with your interests. Opinions expressed herein may differ from the opinions expressed by other divisions and/or business units of Euro Pacific. The Firm does not undertake any obligation to update this material. This material is current as of the indicated date and as of the time it was sent to you. This material was prepared from information believed to be reliable, but Euro Pacific makes no representations or warranties as to its accuracy or completeness. This communication and the information contained herein is neither an offer to buy or sell nor a solicitation of an offer to buy or sell any security or instrument or to participate in any particular trading strategy. This report should not be used as a complete analysis of the company, industry or security discussed in the report. Additional information is available upon request. Any opinions or estimates in this report are subject to change without notice. An investment in the stock may involve risks and uncertainties that could cause actual results to differ materially from the forward-looking statements. Additionally, an investment in the stock may involve a high degree of risk and may not be suitable for all investors. No part of this report may be reproduced without the express written permission of Euro Pacific Capital. Copyright Member FINRA/SIPC. Page 6 of 6