Adelaide, Apr 26, 2006 (ABN Newswire) - Paramount Mining Corporation Limited (ASX: PCP) today announced a further recovery of diamonds from its breakthrough in testing a hard rock source in West Africa. The number of diamonds now recovered from the site totals 42.

The boost in diamond recoveries followed Paramount's completion of initial test work on 6 cubic metres of weathered rock from a site within the Osenase project in Ghana.

The ASX-listed Paramount earlier this month announced its first recovery of diamonds from hard rock within Osenase. Three contiguous pits in series tested four half metre depth horizons of this rock, with diamonds being recovered at every level. Beneath approximately one metre of overburden, level A is the upper layer, with Level D being the deepest. Diamond counts are summarised below.

 OS/FR Pit Level A Level B Level C Level D Diamonds  Total m3
    7         3      5        4       4       16        2
    8         0      7        2       8       17        2
    9         1      3        2       3        9        2
   TOTAL      4     15        8      15       42        6

Accurate diamond weights are not available, but the total weight is in excess of 1 carat. Diamond measurements fall approximately in the range 1 - 2 millimetres in diameter.

At least two types of diamond-bearing host rock have been recognised within rocks of the Birim catchment, both types being observed by Paramount geologists in the recent work programme. The impression from field inspection is that, from the visual appearance and mode of emplacement of these rocks, there is a strong resemblence to kimberlite, the principal hard rock diamond host for most deposits known around the world. It is stressed that more field investigations and analytical work need to be carried out before a link to kimberlite can be firmly established.

"Though it is early days, confirmation of significant numbers of diamonds in a hard rock source that has analogies with kimberlite opens up exciting possibilities and gives us the strongest incentive to continue with this line of exploration ," Paramount's Chief Executive Officer, Ms Maureen Muggeridge, said today.

The diamonds were recovered applying field methods only. Sample concentrates have been retained for later specialised laboratory treatment to break down the heavility lateritised weathered rock in order to release any additional diamonds that may be present.


FURTHER INFORMATION
Exposures of the productive hard rocks occur both within the Osenase concession and outside the concession to its north, in ground held by others. In the latter case, three separate locations where local mining activity has exposed these rocks were visited by Paramount geologists.

At one of these locations, the diamond host rocks appear to occur in two or more subparallel dykes, and show a brecciated texture overprinted by foliation due to metamorphism. In another area the diamondiferous rock occurs as a pipe-like feature some 50 metres across; the rock in this case has a "holey" appearance, suggestive of a mineral of 3 to 6 millimetres in diameter having been weathered out. This looks very similar to the voids left after the erosion of olivine macrocrysts in weathered and altered kimberlite. The pipe-like feature lacks the foliation observed at the other site, suggesting that either regional metamorphism has been variable in intensity with some areas being protected from its influence, or that the pipe was intruded towards the end of the metamorphic event. Diamond host rock at the third location inspected outside the concession area displays features of both the other two locations, namely foliation and a "holey" texture.

"The weathered material tested in Paramount's first hard rock pits lies on a north-easterly trend linking this occurrence with those we visited further to the north," Paramount's Senior Geologist, Les Field said today. "We believe these rocks represent volcanic events that have brought diamonds to surface from their formation zone in the Earth's mantle at depths of 200 kilometres or so, in the same way that kimberlites do. They are part of an ultramafic rock zone that occurs as a broad belt covering part of the Osenase concession."

The Osenase Reconnaissance Licence area, RL5/12 - the subject of a recent joint venture with Leo Shield Exploration Ghana Limited, a subsidiary of ASX listed Caspian Oil and Gas, in which Paramount is earning an 85% interest - covers 330kmSq within the Birim South and West Akim districts. It lies within the Birim Diamond Field, one of the largest economic alluvial diamond bearing provinces in the world, and which has produced over 100 million carats.

"Paramount plans to undertake a geochemical soil sampling survey to delineate the boundaries of the ultramafic belt, as a first step in narrowing down the targets for diamond testing." Ms Muggeridge said. "More diamonds have also been recovered from selected sites in alluvial material. Details of the completed first stage work programme on the alluvials are soon to be released."

Prepared by: Maureen Muggeridge
Chairman / Chief Executive Officer
The information in this report that relates to Exploration Results, Mineral Resources or Ore Reserves is based on information compiled by Maureen Muggeridge, BSc, FAIG, Chairman and Chief Executive Officer of Paramount Mining Corporation Ltd. Ms Muggeridge is a full-time employee of the company. She has sufficient experience relevant to the style of mineralisation and type of deposits under consideration, and to the activity undertaken, to qualify as a competent person as defined in the 2004 Edition of the "Australasian Code for Reporting of Mineral Resources and Ore Reserves". Maureen Muggeridge consents to the inclusion in the report of the matters based on her information in the form and context in which it appears.