Issue link: http://resourceworld.uberflip.com/i/612354
24 www.resourceworld.com d e c e m b e r / j a n u a r y 2 0 1 6 b r o k e r ' s p i c k s S h a y n e N y q u v e s t Para resources inc. [PBR-TSXV] currently controls the El Limon gold mine in Zaragosa Colombia, a small, 20 tonne-per-day opera- tion, as well as a promising project currently awaiting mining permits in Brazil as well as other projects in the pipeline. In this challenging resource market, Para has leveraged itself as a two-tiered invest- ment: On the first tier, Toll Mining and Milling should provide the company with cash flow to avoid significant shareholder dilution: On the second tier, promising early-stage projects exhibit significant pro- duction and or expansion potential. In an effort to expand production at El Limon, Para Resources has invested US $1 million and is raising an additional CDN $4 million to upgrade the mill to process up to 200 tonnes per day. Recent ore mined from the El Limon underground mine has been showing grades significantly higher than forecast at approximately 100 grams/tonne gold. The new excess capacity of the mill is expected to be filled by sourcing from 57 small-scale local miners in the Zargosa area. Para has already arranged contracts with some of these miners and intends to pay them 42.5% of the assayed gold in delivered ore based on the current price of gold. If all goes according to plan, Para Resources expects that El Limon should produce 25,000 oz of gold in 2016 generat- ing about $7 million in cash flow. Some of the money raised in the upcoming financing will go to retire debt, complete the mill upgrade and towards advancing trial mining programs on its Tucuma Project in Brazil. Para has been using strict criteria to identify and acquire properties of merit; specifically the company has only consid- ered projects that host at surface, free gold mineralization that can be brought into production within 18 months for minimal capex (less than $3 million). Anticipated production costs must also fall under US $700 per ounce gold. It was with these crite- ria in mind that Para acquired the El Limon and Tucuma (in Para State Brazil) Projects. At Tucuma, Para Resources has discov- ered an extensive gold mineralized vein system it calls the Angelim target. This vein is about 10 metres wide and drill- ing indicates it extends to a depth of at least 150 metres. The company is focused on getting a mining license in an effort to quickly mine the top 20 metres of soft mineralized saprolite (thoroughly decom- posed and porus rock formed by in-place geochemical weathering) as part of its small-scale mining program. At the moment Para Resources has 32.4 million shares outstanding and 73% of this is held by management and insiders. The market capitalization of the company is just $4 million. I like the fact that the company has positioned itself to take advantage of a number of low cost, cash flow opportunities which will minimize shareholder dilution moving forward. In addition, Para Resources is literally just scratching the surface on its properties. I believe there is excellent potential for large discovery as the company digs deeper. n Shayne NyQuvest is an Investment Advisor with Mackie Research Capital Corporation (MRCC) This article was prepared, in part, under contract by Thomas Schuster. The opin- ions, estimates and projections herein are those of the author and may not reflect that of MRCC. The information and opinions contained herein have been compiled and derived from sources believed to be reliable, but no representation or warranty, expressed or implied, is made as to their accuracy or completeness. The issuer(s) mentioned in this report may not be suitable for all investors. Please consult an investment pro- fessional for advice regarding your particular circumstance. Neither the author nor MRCC accepts liability whatsoever for any loss aris- ing from any use of this report or its contents. Information may be available to MRCC which is not reflected herein. This report is not to be construed as an offer to sell or a solicitation for an offer to buy any securities. The information contained in this article is not intended to con- stitute a research report. Shayne Nyquvest is the beneficial owner of Para Resources shares. Para looks at toll mining to help weather market doldrums 2014 RECIPIENT OF THE " David Barr Award for Leadership and Innovation in Mineral Exploration Health and Safety" "Safe Day Everyday Gold Award" 1.888.228.1234 • www.geotechdrilling.com