pjo: 7.9 mill warrants to be issued

Tue Mar 28, 2006
Palmarejo Silver and Gold Corporation Announces $60 Million Special Warrant Offering

----------------------------------------

Palmarejo Silver and Gold Corporation is pleased to announce that it has entered into an agreement with Sprott Securities Inc. on behalf of a syndicate of underwriters pursuant to which the underwriters have agreed to purchase 6,315,790 special warrants on an underwritten private placement basis, at a price of $9.50 per special warrant for aggregate proceeds to Palmarejo of $60 million. The underwriters have the option to purchase an additional 1,578,947 special warrants at the issue price at any time prior to the closing date for additional gross proceeds of $15.0 million. Each special warrant will entitle the holder to acquire one common share and one-half of one share purchase warrant. Each whole share purchase warrant will be exercisable at a price of $12.50 for a period of 18 months. In the event that Palmarejo fails to obtain receipts for a final prospectus within 60 days of the closing date, each special warrant will entitle the holder to acquire 1.04 common shares and 0.52 share purchase warrants. The offering is scheduled to close on or about April 18th, 2006 and is subject to certain conditions including, but not limited to, satisfactory due diligence and the receipt of all necessary approvals including the approval of the TSX.V.

The securities offered have not been registered under the U.S. Securities Act of 1933, as amended, and may not be offered or sold in the United States absent registration or an application exemption from the registration requirements. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any State in which such offer, solicitation or sale would be unlawful.

NOT FOR DISTRIBUTION TO U.S. NEWS WIRE SERVICES OR FOR DISSEMINATION IN THE U.S.

For more information about the Company's projects, please refer to the NI 43-101 Technical Report dated October 20, 2005 available on SEDAR (www.sedar.com) or via the Company's website at (www.palmarejogold.com).

For further information please contact:

Palmarejo Silver and Gold Corporation
James Crombie
President & CEO
Telephone: (450) 677-2253
Facsimile: (450) 677-2601
Email: [email protected]

Gerri Paxton
Manager, Investor Relations
Telephone: (450) 677-2054
Facsimile: (450) 677-2601
Email: [email protected]
Website: www.palmarejogold.com

The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release
++++++++++++++++++++++++++++++++

Comment:
About 7.9 mill warrants to be issued at CAN$ 75 mill total (before costs). One can assume that ordering/payment for infrastructure (mine and plant) will need to be done early. My calculations have already taken this into account/.

PJO/BSG is on the ball; they don't want to get caught with not having the gear in time. Hopefully they ordered much earlier.

Gerry