Perth, Mar 10, 2008 AEST (ABN Newswire) - A clear white diamond from a sample associated with an anomalous feature that may represent its volcanic source has been recovered by Paramount Mining Corporation (ASX: PCP) from its Wood River Project in Western Australia's Kimberley Region.

The diamond is octahedral in shape and measures over 0.5 mm in diameter. This is the first diamond recovered in Western Australia by Paramount.

"The diamond is associated with a clearly defined anomalous feature, located in the headwater area of the small creek we sampled. This is a very exciting result, showing we are on the right track," Paramount’s Chief Executive Officer, Ms Maureen Muggeridge, said today. "We already have a key target to investigate in a closely confined target area. Pandanus palms and relatively large trees occur within the anomalous area, showing presence of water which is possibly also indicative that the rock beneath the soil will be different to the sandstone that dominates the region."

"The sample was collected from a creek flowing alongside the prominent anomaly which forms an embayment in low sandstone hills. The anomalous area has a diameter of approximately 300 metres," Ms Muggeridge said. "Sandstone layers exposed in the creek bed are strongly warped, indicating a local geological disturbance which could be related to the emplacement of volcanic rock, such as kimberlite."

Previous explorers recovered two diamonds, also greater that 0.5 millimetres in diameter, on the same short creek near its confluence with Blackfellow Creek, approximately 4 kilometres downstream from Paramount's positive site.

In October last year, Paramount completed a sampling programme in which 55 hand-dug samples, weighing around 4 tonnes in total, were collected from the Wood River and Escape Creek Projects located in the central Kimberley Region of Western Australia, a classic tectonic setting for kimberlite, the principal source rock of diamonds.

Approximately one third of the samples have so far been been analysed for indicator minerals and diamonds at Independent Diamond Laboratories in Perth.

Both project areas contain catchments with several small tributaries showing anomalous mineralogy from exploration by earlier explorers, indicative of the presence of kimberlites. It is these catchments that are expected to contain the kimberlitic host rocks that have shed the minerals of interest. The project areas lie approximately 180 kilometres west of the Argyle Diamond Mine.

Because of the remote location of the project areas, a helicopter was required for access to sample sites. Samples were excavated entirely by hand, using large picks, shovels and a variety of small implements to prise gravel out of river trap sites. Intensive sampling was carried out in river systems known to contain indicator minerals and diamonds from earlier sampling, with the objective of picking up these trails and following them to their source rocks. Elsewhere in the Kimberley Region significant discoveries, such as the Argyle Diamond Mine and the diamondiferous Aries kimberlite pipe, have been made by following indicator and diamond trails very similar to these ones.

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, Managing Director 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.

About Paramount Mining Corporation Limited

Paramount Mining Corporation Limited (Paramount) is engaged in the acquisition and development of interests in diamond exploration properties within Western Australia, Ghana and South Africa. The Company's projects in Ghana include Osenase project and Ochinso Project. In South Africa the Company in agreement with Rox Resources Limited acquired twelve projects with granted tenure, including two alluvial diamond projects and other ground containing poorly tested diamondiferous kimberlites, including the Z1 pipe up to five hectares in area, acquired through De Beers. In Australia the Company carries on its operations on Ullawarra project and Ellendale tenements.



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