Paramount Gold and Silver Corp. (TSX:PZG) will be getting 400,000 shares of a Vancouver-based junior mining company in lieu of certain payments related to one of Paramount's recently acquired Mexican mining projects.

Ottawa-based Paramount said it has entered into an amendment of its property option agreement on its Morelos project in Chihuahua, Mexico, which is currently under option to Garibaldi Resources Corp. (TSX-V:GGI)

The amendment eliminates certain payments by Garibaldi and extends the due date for its US$2-million balloon payment to Paramount, in exchange for a one-time payment of 400,000 of the former's common shares.

Paramount acquired the Morelos project in March when it took control Magnetic Resources Ltd. and its Mexican subsidiary. At the same time, Paramount bought Garibaldi's option on the Temoris project, which had also been owned by Magnetic Resources.

Garibaldi's shares were worth 13 cents at 10:28 a.m. The company has seen a boost in value over the past few months after sliding to a low of three cents at the end of 2008, when many of the small-cap junior mining companies were being hammered by risk-averse investors amid the global economic turmoil.

Meanwhile, investors reacted favourably to the news, with Paramount's shares gaining eight cents or almost five per cent to $1.75 Friday morning.