June 24, 2019, Vancouver, B.C. — Para Resources Inc. (the “Company” or “Para”) at the request of IIROC is issuing this news release to clarify the disclosure it included in its June 20, 2019 news release. The previous news release omitted to include cautionary language as it relates to the Company’s production plans for its projects that are not supported by a preliminary feasibility or feasibility study, and without first establishing mineral reserves, which could result in higher risk of economic or technical failure. Other information which was contained in the June 20, 2019 news release included disclosure that is not permitted by National Instrument 43-101 Standards of Disclosure for Mineral Projects and is further clarified or retracted as described below.
Gold Road
The Gold Road disclosure in the June 20, 2019 news release that described gold content that had been mined in Q2 is retracted. Such gold content disclosure is not permitted unless an issuer is able to include grade and metal content for each contained metal.
The Gold Road disclosure that referred to production figures (and contained gold) and forecasts for Q3, Q4 and 2020 is retracted as the Company’s work and plans at Gold Road are not supported by a preliminary feasibility or feasibility study. The Company’s “NI 43-101 Technical Report, Preliminary Economic Assessment of the Gold Road Mine, Arizona, USA” dated May 3, 2018 (the “PEA”) is preliminary in nature and includes Inferred Mineral Resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as Mineral Reserves, and there is no certainty that the results included in the PEA will be realized. If the Company were to bring the Gold Road mine into production without first establishing mineral reserves supported by a feasibility study, the Company cautions that this could result in higher risk of economic or technical failure of the operation than if a feasibility study had been prepared demonstrating economic and technical viability. There are no assurances that the Gold Road mine will be found to be economic.
El Limon
The El Limon disclosure in the June 20, 2019 news release that referred to proposed production figures (and contained gold) and any economic analysis of production is retracted. The El Limon disclosure that described contained gold is retracted. Such gold content disclosure is not permitted unless an issuer is able to include grade and metal content for each contained metal as part of a deposit that has been categorized as an inferred, indicated or measured mineral resource or proven or probable mineral reserve as defined by CIM definition standards have been established on the El Limon property. The El Limon project does not have any mineral resources or mineral reserves as categorized by NI 43-101.
The Company’s decision to mine and its work and plans at El Limon are not supported by a preliminary economic assessment, preliminary feasibility study or feasibility study. The technical report entitled “El Limon Project Technical Report Zaragoza, Antioquia, Colombia” dated September 15, 2015 does not satisfy the requirements to be considered a preliminary economic assessment, preliminary feasibility study or feasibility study. If the Company were to bring the El Limon mine into production without first establishing mineral reserves supported by a feasibility study, the Company cautions that this could result in higher risk of economic or technical failure of the operation than if a feasibility study had been prepared demonstrating economic and technical viability. There are no assurances that the El Limon mine will be found to be economic.
The quote from Geoff Hampson, Para’s CEO, is re-stated as follows: “The previous mine plan at Gold Road, which had initially been approved by MSHA, was subsequently rejected by a new inspector. Unfortunately, the changes needed to address the new MSHA issues means that we cannot mine material from the 800 Level until a new secondary escape route is established from the 900 Level. We had anticipated being able to mine from the 800 Level during development phase to the 900 Level which would have offset the development costs. Our new plan, now contemplates the stockpiling of mineralized rock.”
Qualified Person
Paulo Andrade, Professional Geologist (MAIG #6163), VP & Country Manager of Para,is the Qualified Person under NI 43-101 who has reviewed and approved the technical information in this news release.
A copy of this news release can also be found on our SEDAR profile.
