Palisade Research - Thu, Aug 17, 2017

(V.PBR) Para Resources (Mkt Cap: C$28M) Update: Acquires High-Grade, 85,000 Oz./Year Mine

photo of an Arizona mountain range at dusk

Para Resources' recently announced a major acquisition, securing the assets of Mojave Desert Minerals LLC, which include the Gold Road mine, located in Oatman, Arizona, just a stone throws from Northern Vertex's Moss Mine. Gold Road is a fully permitted mine, with past production of over 700,000 ounces of gold averaging 8.8 g/t, operating as recently as 2016.

mine map with a closeup photo

The Gold Road mine is located in one of the most prolific gold mining districts in the Western United States. The project is located on private land and is a fully permitted underground mine with a 500 ton per day cyanide (CIP) mill. Recovery of gold from ore exceeds 92%.

The infrastructure, including the mine, mill and permits are being maintained. The mill is in excellent condition and was operating in July 2016. At closure, the underground workings were open and stable, with permitting in place to resume mining almost immediately. Management expects that less than $150,000 will be needed to get the mill running again, with the majority of funds dedicated to preventative maintenance.

minesite photo

Para is being smart moving forward, on plans on taking the next 3 months to optimize the mine plan. This will include either building a shaft, or simply redoing the decline. While production is economic as is, both options have the goal of further minimizing transportation costs. Concurrently with the mine plan, Para plans on working on a 43-101 compliant resource report.

To pull it all together, Gold Road has significant exploration potential, with the orebody open at depth and along strike. The district has had only minor exploration since the 1940s, and we are excited to see what kind of targets are delineated with modern technology.

We believe the Gold Road mine can ramp up to 85,000 oz./year production at a minimum average grade of 7.5 g/t. This drastically changes Para's production profile, and in turn we bump its price target from C$0.47 to C$0.65, or a 160% gain from current levels.

For our original write-up on Para Resources, please click here.

Palisade Global Investments Limited holds shares of Para Resources. We receive either monetary or securities compensation for our services. We stand to benefit from any volume this write-up may generate. The information contained in such write-ups is not intended as individual investment advice and is not designed to meet your personal financial situation. Information contained in this report is obtained from sources we believe to be reliable, but its accuracy cannot be guaranteed. The opinions expressed in this report are those of Palisade Global Investments and are subject to change without notice. The information in this report may become outdated and there is no obligation to update any such information. Do your own due diligence.

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