August 22, 2019, Vancouver, B.C. — Para Resources Inc. (the “Company” or “Para”) is pleased to provide an update on operations as follows:
- Gold Road has completed 245 feet of development raise and incline to complete excavation of the new secondary escape route from the lowest levels of the mine as per the Mine Safety Health Administration (MSHA) request. Work continues on lining and landings to finalize this project by the end of August.
- As advised in June 2019, the new surface fan and air doors were installed and commissioned in July, as anticipated.
The work plan for the balance of Q3 2019 includes the completion of the development work accessing the 900-Level by advancing 1,650 ft.
- In July, the 3750 decline to access the 900-level advanced 520 feet, including passing the first sub-level. The vein at 3310 W is 4 ft in width and channel sampling has yielded an average grade of 0.50 ounces per ton (17 g/mt). The 3310E heading vein is also 4 ft in width with an average grade of 0.25 ounces per ton (8.6 g/mt). These preliminary results are better than modeled and are at a width that allows for a conventional shrink stope mining method.
- Additional miners are currently being hired to restart mining on the 100-level and rehabilitate the 800-level.
- These three production faces will be producing by September 2019.
- The 2019 Q4 plan anticipates the re-start of the mill, at full capacity of 500 TPD, by early November with a stockpile in place.
- Additional development work is also planned.
- Management is in discussions with the major shareholders and others to provide financing to bridge the working capital and capex requirements through the prolonged development timeline.
- Manpower at the mine will be ramped up as the development work has opened access to the additional headings.
- The exploration drilling program on the adjacent Tr-Ue vein began in June and was delayed by equipment failures. A new drilling contractor is on-site and the program is expected to be completed by the end of August.
- For current year to date to July, El Limon has produced 1,187 ounces of gold in doré which is a 26% increase of 2018.
- The mine is currently focusing on four main development projects including three new mine mouths.
- Level 9 of El Limon is a development project to deepen the lowest levels of the mine past the El Limon fault. The project to date has rehabilitated 140 meters of existing drift, re-established internal hoisting and all utilities, and advanced 32 meters of development, passing and establishing ground support in the fault zone. 83 meters of waste development remains before drifting and raises begin in the vein for 320 meters of development to establish the first two production stopes.
- Renacer is a new mine mouth for the El Limon Mine. A new mine mouth with concreted metal archways has been established, and development in the main decline has advanced 22 meters with 60 meters remaining, before beginning 440 meters of drifting and raises in the vein for 440 meters to establish the first two production stopes.
- Alacran is a modernization project on a formalized mine with support in engineering, design and supervision from the company. The 70 meters of the existing access incline were straightened by new excavation and 120 meters of drift rehabilitated. The incline is being extended and 15 meters remain. In parallel, construction is almost completed on a truck loadout with the new hoist. Once completed, work will begin on 340 meters of development in the vein to establish the first two production stopes.
- Diamantina is a modernization project on a formalized mine with support in engineering, design and supervision from the company. The mine mouth has been re-established with a concreted metal archway and 95 meters of incline rehabilitation including re-excavation of 15 meters. 50 meters of incline extension remain before drifting and raises begin in the vein for 190 meters of development to establish the first production stope.
Geoff Hampson, Para’s CEO, states, “Mine development plans in both Colombia and Arizona are progressing well and are anticipated to allow the company to achieve full production at both mines by Q1 2020. The delay in the commencement of mining at Gold Road, as necessitated by the reversal of the original MSHA approval, has not changed the economic assessment of the Gold Road mine as published in the NI 43-101 Technical Report and Preliminary Economic Assessment of the Gold Road Mine by RPM Global on May 3, 2016. Recent increases in the price of gold improve projected cash flows but our forecast models continue to show significant cash flow at our base case of $1,250 per ounce”.
The Company’s “NI 43-101 Technical Report, Preliminary Economic Assessment of the Gold Road Mine, Arizona, USA,” dated May 3, 2018, 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 a 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.
A copy of this news release can also be found on our SEDAR profile.