Increases Para's direct interest in the EL Limon Mine to 61%
VANCOUVER, BC / ACCESSWIRE / January 13, 2016 / Para Resources Inc. (the "Company" or "Para") (PBR.V) (WKN:A14YF1) reports that after completing Phase 1 due diligence on the Ojos Negros property in Mexico it has terminated the binding letter of intent dated April 25, 2015, with Navial Mineria, S.A. de C.V. and Ivonne Alicia Boileve Romero, effective immediately.
The Company also reports that it has signed Letters of Intent to acquire the 33.71% interest in Colombia Milling Limited ("CML") owned by James Randall Martin ("Martin") and the 16.20% interest in CML held by SAEF Exploration Inc. ("SAEF"), increasing the Company's ownership of CML to 100% (the "Transaction"). The acquisition of 100% of the shares of CML will bring Para's total indirect interest in the El Limon Mine to 61.2%.
Pursuant to the terms of the Transaction, Para will acquire Martin's interest in CML in exchange for 13,213,340 units (the "Units") of Para at a deemed price of $0.09 per Unit, each Unit being comprised of one common share of the Company (each a "Share") and one half of one transferable share purchase warrant (the "Warrants"), each whole Warrant entitling Martin to purchase an additional Share for a period of 18 months from the date of issuance at an exercise price of CAD$0.20 per Share. Para will purchase all of the shares owned by SAEF in CML in consideration of a) USD$250,000 cash at closing, and, b) an unsecured note in the amount of USD$170,000, payable six months from the closing date along with accrued interest at a rate of 7% per annum.
The Transaction is subject to several conditions precedent including the approval of the TSX Venture Exchange.
Geoff Hampson, Chairman and CEO of Para Resources, commented:
"This is an important step for the Company's strategy to acquire small scale, cash flowing, producing properties. The previously announced upgrades at the El Limon mine are almost complete with production expected to re-commence in February 2016 at 50 TPD, ramping up to the planned 200 TPD by June 2016. The Company expects the El Limon Mine to produce positive cash flow at the initial planned 50 TPD and to steadily improve as the second mill comes on line in March or April. Para expects to generate sufficient cash flow from its interest in the El Limon Mine to cover all operational and overhead costs in Colombia, Brazil and Canada."
The acquisition of the Martin and SAEF shares of CML is expected to close in February 2016.
El Limon Overview
The El Limon Mine is located in the northwest part of Colombia near the town of Zaragoza, Antioquia, Colombia and is accessible via both paved highways and gravel roads. The El Limon Mine is situated in the wide Zaragoza Gold District which extends south from El Bagre to Segovia and Remedios, all towns with considerable historical alluvium mining and large underground gold mines that have operated for generations. The El Limon claims cover a total area of approximately 277.5 hectares, including 86.4 hectares in RPP No. 12011 and 191.1 hectares in the concession contract No. 620, which is located west of the currently exploited zone. Gold grade at the El Limon Mine ranges from 5 grams of gold per tonne to more than 100 grams of gold per tonne; the expected diluted average gold grade is 7-10 grams per tonne. Extremely high-grade mineralization is common in the narrow-vein underground mines in the region.
It is CML's intention to utilize a portion of any cash generated from mining to drill the El Limon property to expand the number of targeted areas for mining.
Mr. David Bikerman, a Member of the Australian Institute of Geoscientists (MAIG #3558), Mining Engineer, a CP/QP under NI-43-101, has reviewed and approved the scientific and technical information in this press release.
ABOUT PARA RESOURCES:
Para Resources is a gold mining and toll milling company that controls the El Limon Mine in Colombia and owns 100% of the Tucuma property in Brazil. In addition to these properties, Para will continue to take advantage of current market conditions to acquire and develop additional assets that have strong exploration and development potential.
ON BEHALF OF THE BOARD OF DIRECTORS
"C. Geoffrey Hampson"
C. Geoffrey Hampson, Chief Executive Officer and Director
For further information, please contact:
Andrea Laird
Telephone: 604-398-3227
Neither TSX Venture Exchange nor its regulation service provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
All statements, analysis and other information contained in this press release about anticipated future events or results constitute forward-looking statements. Forward-looking statements are often, but not always, identified by the use of words such as "seek", "anticipate", "believe", "plan", "estimate", "expect" and "intend" and statements that an event or result "may", "will", "should", "could" or "might" occur or be achieved and other similar expressions. Forward-looking statements are subject to business and economic risks and uncertainties and other factors that could cause actual results of operations to differ materially from those contained in the forward-looking statements. Forward-looking statements are based on estimates and opinions of management at the date the statements are made and although we believe the estimates reflected in our forward looking statements are reasonable, results may vary and we cannot guarantee future results, levels of activity, performance or achievements. Forward-looking statements in this release include statements regarding the timing of upgrades and production levels at the El Limon Mine and the closing of the Transaction. Factors that could cause such differences include: production levels may not be as anticipated, changes in world commodity markets, equity markets, costs and supply of materials relevant to the mining industry, change in government and changes to regulations affecting the mining industry. In addition to other factors and assumptions which may be identified in this press release, assumptions have been made regarding and are implicit in, among other things, the timely receipt of any required regulatory approvals. The Company does not undertake any obligation to update forward-looking statements even if circumstances or management's estimates or opinions should change except as required by applicable laws. Investors should not place undue reliance on forward-looking statements.
SOURCE: Para Resources Inc.