Re: Assignment of Option on the Temoris Concessions to Paramount Gold and Silver Corp.

Exhibit 10.7

PARAMOUNT GOLD AND SILVER CORP.
SUITE 110 – 346 WAVERLY STREET
OTTAWA, ONTARIO  K2P 0W5

February 2, 2009

Garibaldi Resources Corp.

301-788 Beatty Street

Vancouver, British Columbia

V6B 2M1

Attention:  Steve Regoci, President and CEO

Dear Sirs:

This letter agreement (“ Letter Agreement ”) confirms and documents the terms on which Paramount Gold and Silver Corp. (“ PGS ”) will acquire, through its Mexican subsidiary, Paramount Gold de Mexico S.A. de C.V. (“ PGS Mexico” , and collectively with PGS are referred to herein as “ Paramount ”) and Garibaldi Resources Corp. (“ GRC ”) and its Mexican subsidiary, Minera Pender, S.A. de C.V. (“ Minera Pender ”, and collectively with GRC are referred to herein as “ Garibaldi ”), will transfer and assign to Paramount, the option (the “ Option ”) granted by Minera Gama S.A. de C.V. (“ Minera Gama ”) to Garibaldi, pursuant to a mineral property option agreement dated April 18, 2006 between Minera Gama and Garibaldi Granite Corp. (now known as Garibaldi Resources Corp.) as amended by a mineral property amending agreement dated January 22, 2007 (together the “ Option Agreement ”), to earn up to a 100% interest, subject to a 2% net smelter return royalty payable to Minera Gama, in the concessions for mineral exploration located near the Municipalities of Chinipas and Guazapares, in the State of Chihuahua, Mexico as more particularly described on Schedule “A” and Schedule “B” attached hereto (the “ Temoris Concessions ”).

The parties hereto (the “ Parties ”) previously entered into a letter of intent dated October 6, 2006 (the “ First Letter of Intent ”) and a second letter of intent dated June 19, 2008 (the “ Second Letter of Intent ”) pursuant to which Garibaldi has granted Paramount options to earn interests in portions of the Temoris Concessions.  Paramount has paid a total of US$200,000 to Garibaldi pursuant to the Second Letter of Intent (the “ First Payment ”).

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On acceptance of this Letter Agreement by Garibaldi, this Letter Agreement will constitute a binding agreement as between Paramount and Garibaldi on the terms and conditions set forth below.

Assignment

1.

Garibaldi hereby assigns, transfers, grants and sets over absolutely to Paramount, and its successors and assigns all legal and beneficial right, title and interest in and to the Temoris Concessions and the Option Agreement (the “ Assignment ”) effective upon Closing (as defined below).

2.

Garibaldi hereby assigns all data, original assays certificates and reports, drill records and core, reports, hyperspectral survey data and analytical results and interpretations, documentation, maps, geologic interpretations, competitive intelligence, knowledge and the like in regards to the Temoris Concessions in Garialdi’s control and possession and in the control or possession of any of its contractors, employees, consultants or the like.

3.

Paramount hereby assumes all indebtedness, liabilities and obligations of Garibaldi under the Option Agreement and hereby agrees to perform, observe and be bound by all covenants, obligations, terms and conditions contained in the Option Agreement.  Paramount covenants and agrees that upon Closing Paramount will be bound by the terms of the Option Agreement in the same manner and to the same extent as if Paramount had duly executed the Option Agreement.  With respect to the application of the Option Agreement in respect of any period on or after the date of Closing, Paramount shall be deemed, as between Garibaldi and Paramount, to be the named party to the Option Agreement in the place and stead of Garibaldi.

Consideration

4.

As consideration for the Assignment, Paramount will:

(a)

pay to GRC $US100,000 cash (the “ Second Payment ”) within two business days of acceptance by GRC of this Letter Agreement, and

(b)

pay to GRC $US100,0000 cash (the “ Closing Payment ”) upon Closing.

(c)

issue to GRC 6,000,000 shares of common stock in the capital of PGS (the “ Shares ”)

GRC hereby acknowledges receipt of the Payment and acknowledges that the Payment shall be deemed as payment in full of the amount due to GRC under subsection 4(a).

For greater clarity, total cash consideration of $US400,000 includes the First Payment, the Second Payment and the Closing Payment.

Paramount shall prepare the purchase price allocation and deliver it to Garibaldi prior to Closing.

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5.

Garibaldi agrees that in addition to any resale restrictions required by applicable securities laws or the policies of the Toronto Stock Exchange or the NYSE Alternext LLC, the Shares will be subject to the following resale restrictions (the “ Resale Restrictions ”):

(a)

upon Closing, all Shares will be initially subject to Resale Restrictions and may not be traded;

(b)

upon the date that is six months following the date of Closing, 500,000 Shares will be released from the Resale Restrictions; and

(c)

every three months thereafter an additional 500,000 Shares will be released from the Resale Restrictions until all Shares have been released from such Resale Restrictions.

Garibaldi acknowledges that any certificate representing any of the Shares will bear a legend setting out the applicable Resale Restrictions.

The Shares shall also be subject to escrow provisions as set out in an escrow agreement (the “ Escrow Agreement ”) substantially in the form as set out in Schedule “C” hereto.  The escrow agent shall be Jeffrey Klein, Esq. (“the Escrow Agent”) who shall hold the Shares until receipt of confirmation that the transfer of interest in the Temoris option from Minera Pender to PGS Mexico has been accepted and recorded in Mexico and that a satisfactory legal opinion from Mexican legal counsel has been given in this regard at which time the Escrow Agent shall deliver the shares to Garibaldi upon delivery of the Initial Direction in the form as asset out in the Escrow Agreement.

Representations and Warranties of Garibaldi

6.

GRC and Minera Pender hereby jointly and severally represents and warrants to Paramount that:

(a)

GRC is a corporation duly incorporated and organized and validly existing under the laws of the Province of Alberta;

(b)

Minera Pender is a corporation duly incorporated and organized and validly existing under the laws of Mexico, is a wholly owned subsidiary of GRC and is qualified to do business in Mexico;  

(c)

each of GRC and Minera Pender has full corporate power, authority and capacity to enter into this Letter Agreement and to carry out their respective obligations under this Letter Agreement;

(d)

each of GRC and Minera Pender has been duly authorized to enter into, and to carry out their respective obligations under this Letter Agreement and no obligation of GRC or Minera Pender in this Agreement conflicts with or will result in any breach or violation of any term or requirement in:

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(i)

their respective articles or by-laws;

(ii)

any other agreement to which either is a party; or

(iii)

the laws of Ontario or Mexico;

(e)

each of GRC and Minera Pender has duly executed and delivered this Letter Agreement, which binds each of them in accordance with its terms;

(f)

Minera Gama is the registered and beneficial owner of the Temoris Concessions, free and clear of all liens, charges and claims of others, subject to the rights of Garibaldi in the Temoris Concessions ;

(g)

there are no outstanding agreements or options to acquire or purchase the Temoris Concessions or any interest in or any portion thereof and no person, firm or corporation has any proprietary or possessory or royalty interest in the Temoris Concessions other than Minera Gama.

(h)

the Temoris Concessions are properly and accurately described in Schedule &l