News

May 2, 2019

Para Resources Announces Closing of its Non-brokered Private Placement and a Change to the Mining Plan and Production Planning at Gold Road

Company Also Announces Commencements of Exploration Drilling

May 2, 2019, Vancouver, B.C.— Para Resources Inc. (the “Company” or “Para”) (TSXV – “PBR”) (WKN – “A14YF1”) (OTC – “PRSRF”) is pleased to announce that it has closed the Company’s previously announced non-brokered private placement (the “Offering”).

Pursuant to the Offering, the Company has issued 29,591,788 units of the Company (the “Units”) at a price of C$0.18 per Unit for gross proceeds to the Company of approximately C$5,326,522. Each Unit consists of one common share of Para and one-half of one common share purchase warrant. Each whole warrant will entitle the holder to acquire one common share of the Company at a price of C$0.25 until November 2, 2020. The warrants are subject to an accelerated expiry if the closing trading price of the Company’s shares is greater than 35 cents per share for a period of 10 consecutive trading days. The Company will give notice to the holders of the acceleration event and the warrants will expire 30 days thereafter. All of the securities issued pursuant to the Offering are subject to a four month hold period in accordance with applicable Canadian securities law.

Glenn Walsh and Geoff Hampson, directors of the Company participated in the Offering by purchasing an aggregate of 28,961,788 Units. Accordingly, the Offering constitutes a related-party transaction under Multilateral Instrument 61-101. Because the Company’s shares trade only on the TSX Venture Exchange, the issuance of securities is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101 pursuant to Subsection 5.7(a) of MI 61-101.

The Company also announces that it is developing a new mine plan for the Gold Road Mine.  The first phase of the previous mine development plan included rehabilitation of the existing workings including the haulage road, the underground ventilation system, ground support, dewatering, secondary escapeways, power distribution, and mine infrastructure, all of which have been substantially completed.  The second phase of the plan, which had been accepted and approved by Mine Safety and Health Administration (“MSHA”), included gradually increasing the number of production faces by developing sub-levels simultaneously with mine development.  This plan, as well as the proposed secondary escapeway, had been inspected and approved by MSHA. A new MSHA inspector has made a different interpretation of the regulation which requires a different approach and has resulted in a delay of mining operations. The Company is working together with MSHA to ensure that the updated escapeway plan will meet the requirements.

The Company is taking this opportunity to review the overall mine plan taking into consideration accelerated development work in the near term to increase the number of production faces.  The Company foresees a six to eight-week delay in reaching production goals but does not believe this will cause a significant impact on long-term production guidance.

Ian Harris, Para’s President stated, “While this change to the mine plan delays production, development below the 800 Level will continue to be the highest priority.  We are updating the mine plan while working with MSHA and anticipate that as a result, development will be accelerated in two footwall declines off the 800 Level. Ventilation and escape raises will be established prior to sublevel ore development. The ventilation and escape raises will allow waste development, sublevel ore development, and stoping below the 800 Level. The far west decline and raises will provide ventilation and escape for the development under the “historic” high grade Sharpe Stope (1,000’ strike length) and will establish access to multiple ore faces once completed. Our guidance for Q4 2019 production, when we anticipate declaring Commercial Production, is unchanged”

The Company also announces that the contract drilling company that will do the initial exploration drilling on the adjacent Tr-Ue vein will commence work during the first half of May with assays of core expected in the first half of July 2019.

 

ABOUT PARA RESOURCES:

Para Resources Inc. (“Para”) is a junior gold mining and exploration company. The Company owns two projects that couple areas of highly prospective exploration potential with an existing mining and milling operation that generate cash flow to support an exploration program. Purchasing existing and fully permitted mines and facilities dramatically reduces the exploration risk as the small mining operations are profitable and provide excellent returns as a stand-alone entity. This is a unique approach to developing “world class” assets. In addition, Para is unique in that the Insiders have invested more than $25 million of their own capital and own approximately 70% of the equity.

Para’s management team is seasoned and proven, having discovered, built, managed and sold several different mines over the last 40 years. The Company has two major projects: The Gold Road Mine in Arizona, USA and the El Limon Mine in Zaragoza, Colombia.

On behalf of the Board of Directors

“C. Geoffrey Hampson”

________________________________________

Geoffrey Hampson, Chairman, Chief Executive Officer and Director

For further information, please contact Andrea Laird, telephone: +1-604-259-0302

Cautionary Notes:

This press release contains forward-looking information under Canadian securities legislation.  Forward-looking information. Generally, forward-looking statements can be identified by the use of forward-looking terminology such as “plans”, “expects” or “does not expect”, “is expected”, “budget”, “scheduled”, “estimates”, “forecasts”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might” or “will be taken”, “occur” or “be achieved”.  All information contained in this news release, other than statements of current and historical fact, is forward-looking information. Forward-looking statements are subject to known and unknown risks, uncertainties and other factors that may cause the actual results, level of activity, performance or achievements of Para to be materially different from those expressed or implied by such forward-looking statements, including but not limited to those risks described in Para’s public documents filed on SEDAR from time to time. Forward-looking statements are based on the opinions and estimates of management as of the date such statements are made. Although management of Para has attempted to identify important factors that could cause actual results to differ materially from those contained in forward-looking statements, there may be other factors that cause results not to be as anticipated, estimated or intended. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Para does not undertake to update any forward-looking statements, except in accordance with applicable securities laws. Para’s Readers should also review the risks and uncertainties sections of Para’s annual and interim MD&As.

 

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.