Generating Cash Flow from Toll Milling and Small Scale Mining

Generating Cash Flow from Toll
Milling and Small Scale Mining
DoréBar from el Limon,
Colombia, 15/09/2015
1

Legal Disclaimer and Statement by Qualified Persons
Some statements herein contain forward-looking information. These statements include, but are not limited to, statements with respect to the expected benefits from
having a management team seeking to aggressively grow the Company into a mid tier gold producer through acquisitions and development of existing assets, the
completion of the acquisition of a significant interest in the Ojas Negros Project and the development potential of the Company's properties. These statements
address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which maycause the actual results,
performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors
and assumptions include, among others, the effects of general economic conditions, the price of gold, silver, copper and other metals, changing foreign exchange
rates and actions by government authorities, uncertainties associated with legal proceedings and negotiations and misjudgements in the course of preparing
forward-looking information. In addition, there are known and unknown risk factors which could cause the Company’s actual results, performance or achievements to
differ materially from any future results, performance or achievements expressed or implied by the forward-looking statements. Known risk factors include risks
associated with the ability obtain any necessary approvals, waivers, consents and other requirements necessary or desirable to permit or facilitate the development
of the Company’s properties, the risk that any applicable conditions of the acquisition of an interest in Para Resources Projects may not be satisfied, risks associated
with project development; the need for additional financing; operational risks associated with mining and mineral processing; fluctuations in metal prices; title matters;
environmental liability claims and insurance; reliance on key personnel; the potential for conflicts of interest among certain officers, directors or promoters of the
Company with certain other projects; currency fluctuations; competition; dilution; the volatility of the Company’s common share price and volume; tax consequences;
and other risks and uncertainties. Forward-looking statements are made based on management's beliefs, estimates and opinions on the date that statements are
made and the Company undertakes no obligation to update forward-looking statements if these beliefs, estimates and opinions or other circumstances should
change, except as required by law.
Each recipient of this document accepts that no representation or warranty is made concerning the information herein nor is any liability accepted in respect thereof
by Para Resources , or any other shareholder (present or future), or Director, Officer, advisor, or by any of their respective affiliates; Company Copyright clauses are
valid in this case. Content and slides from this presentation are not allowed to be copied or distributed otherwise, without the written consent of the Company.
Mr. Paulo Andrade, P. Geo., qualified person under National Instrument 43-101, VP & Country Manager for Para Resources Inc., has reviewed and approved the
scientific and technical information in this presentation pertaining to the Angelim Property, Brazil.
Mr. David Bikerman, MAIG, qualified person under National Instrument 43-101, Independent Consultant to Para Resources Inc., has reviewed and approved the
scientific and technical information in this presentation pertaining to the El Limon Property, Colombia.
2

PARA RESOURCES INC
• Para Resources Inc. (“Para”), (TSXV:PBR): is a Junior Mining and Toll Milling company
• Controls the El Limon Gold Mine in Zaragoza, Colombia
• Currently undergoing a mill upgrade to increase mill capacity to 200 TPD in order to process
ore delivered by small local miners
• El Limon is capable to produce 25,000 ounces of Au in 2016 which could generate $6-7
million of cash flow. The potential quantity and grade is conceptual in nature, there has
been insufficient exploration to define a mineral resource or reserve. It is uncertain if further
exploration will result in the delineation of a mineral resource or reserve.
• Para also owns a property in Brazil where permits to mine the surface material have been
applied for.
• Subject to due diligence Para will use a portion of the projected cash flow from potential
small scale mining properties to finance an exploration program in the hard rock
• The Company has a market capitalization of $4 million
3

EL LIMON MINE
• In June 2015, Para in partnership with Randy Martin, a proven mining professional who has discovered and
brought several mines into production, acquired the El Limon Mine, located in Zaragoza Colombia.
• The El Limon mine is 100% owned by a Colombian company called Four Points Mining SAS (“Four Points”).
Colombia Milling Limited (“CML”) acquired 61.2% of Four Points. Para owns shares of CML.
• The shares of Four Points and a shareholder ’s loan from Red Rock Resources Plc (“Red Rock”) to Four Points were
acquired from Red Rock, an AIM listed mining company, for USD $5 million. Payment terms were $550,000 in cash
(paid), 1,450,000 over three years plus an NSR until an additional $2,000,000 in royalties are paid.
• El Limon is currently in operation, mining gold underground. The underground deposit has not been fully explored.
The grade of gold mineralization over the last 20 years has been 5 - 100 gpt. (Average: 15+ gpt)
• The original design capacity of the mill and processing plant was 80 TPD. CML has undertaken a $1.7 mm USD
upgrade to the processing plant to increase throughput to 200 TPD. The additional feed material will be sourced
from local small scale miners.
• Local miners are paid 42.5% of the assayed gold in delivered ore based on the current price of gold.
• At similar plants, using an assumed average grade of 10 gpt, processing costs are $241 per recovered ounce.
• Toll Milling practically eliminates the mining risk associated with underground operations.
4

EL LIMON MINE
5

EL LIMON MINE
According to the NI 43-101 report filed with the TSX in
October 2015
• The main structure present in the area is the Otu Fault
that crosses the area from North to South, the control
over the Juan Vara creek is relevant.
• The known vein systems of the region extend up to 2-3
km in length with plunging high-grade ore shoots
central to the vein and surrounded by a lower grade
halo. Vein dips are typically around 30-40°, and
occasionally sub-vertical.
Mr. David Bikerman, MAIG, qualified
person under National Instrument 43-
101, Independent Consultant to Para
Resources Inc., has reviewed and
approved the scientific and technical
information in this presentation
pertaining to the El Limon Property,
Colombia.
• The mineralization of El Limon mine is embedded in the
quartz-feldespathic gneisses. The gold occurs in a milky
quartz vein, to the west of Otu Fault, its approximate
course is N10E/40W, with average thickness of 0.40 m.
These features are very consistent in an extension of
almost 400m on the course and 350m in the dip
direction.
• Typical production grades of the region range 8-12 g/t
Au diluted. However, higher-grade mines also exist,
such as Quintana and El Limon mines at over 15 g/t Au
diluted.
6

EL LIMON MINE
• The existing mineral process at El Limon consists of two-stage
crushing, milling, gravity separation, flotation, cyanidation, Merrill-
Crowe precipitation and smelting. Amalgamation in small ball mills
(cocos) has historically been performed as well. The final product
sold by El Limon is gold/silver doré. Average monthly production
during upgrade has been 250 ounces per month (10% of upgraded
capacity).
• A 2-stage crushing plant is operational on site. The crushing plant
historically operated one shift per day at 10-12 tonnes per hour but
has capacity of 20 tonnes per hour, providing sufficient crushed rock
to feed the mill. The crushing plant consists of a jaw crusher, cone
crusher, vibrating screen and associated belts and bins. A nominal
3/4” product is supplied to the mill. This crushing plant will be
renovated and upgraded to allow a smaller (-1/2”) nominal feed to
the mill.
• A $1.7 million upgrade is underway under the operational control of
Para. The planned upgrades includes the installation of a second ball
mill and other equipment required to increase mill throughput to 200
tpd. The proposed mineral process has not changed. Amalgamation
has been eliminated. Project completion is Q1 2016
• Recent head grades from El Limon mine development workings have
exceeded 100 gpt
7

ENVIRONMENTAL AND SOCIAL BENEFITS
Toll milling has a direct environmental and social benefit to the people of the region as it
eliminates the use of mercury and its health effects while increasing the amount of money
the artisanal miner makes by increasing his net yield.
• The artisanal gold mining sector in Colombia has 200,000 miners officially producing
30 tonnes Au/a.
• Miners crush and amalgamate the whole ore, without previous concentration, and
later burn gold amalgam without any filtering or condensing system, often in the
same building that the family lives in.
• A percentage of the mercury added to small ball mills (cocos) is lost: mostly with
tailings (typically dumped in rivers) and some when amalgam is burned.
• Air mercury levels range from 300 ng Hg/m 3 (background) to 1 million ng
Hg/m 3 (inside gold shops) with 10,000 ng Hg/m 3 being common in residential areas.
• The WHO limit for public exposure is 1,000 ng/m 3 . The total mercury
release/emissions to the Colombian environment can be as high as 150 tonnes/a
giving the country the first position as the world's largest mercury polluter per
capita*
* Global Mercury Project in Colombia for the United Nations.
8

Toll Milling practically eliminates the Mining Risk:
TOLL MILLING
• Feed material is purchased based on the assayed amount of gold
in the rock delivered by the artisanal miner.
• The El Limon mine is located near Zaragoza, Colombia, a prolific
and historic gold producing area.
• Over 1,000 local artisanal miners within a 150 km circle of El
Limon are mining suitable feed material with a range of diluted
grade greater than 8 gpt (average 10 gpt).
• Rock mined from the El Limon mine will supplement the more
than 200 MT per day of feed material available to be contracted
from among the 57 local mines.
• Environmentally sound way to eliminate mercury used by
artisanal miners.
• El Limon has strong and proven operations management.
• CML management has track record operating other toll mining
operations.
• Similar operations indicate that:
Ø
Ø
Ø
at 10 gpt processing cost is $241 per ounce.
At $1,050 per ounce for gold, total cost of feed material
and processing is $687 per ounce at similar operations.
Toll milling operations breaks even when gold is $500/oz.
Small scale artisanal miners within 150 km of el Limon
9

TOLL MILL CASH FLOW – SIMILAR OPERATION (US$000)
El Limon Proforma Toll Milling (USD 000's)
Month
Yearly
Daily Purchase Rate 200 200
Ore - tonnes 6,000 72,000
Grade - grams/tonne 10.0 10.0
Total Gold Ounces Purchased - Ore & Sands - tonnes 1,929 23,151
Mill Feed - tonnes 6,000 72,000
Average Mill Feed Grade - grams/tonne 10.0 10.0
Mill Recovery - % 92% 92.0%
Net Gold Production - ounces 1,775 21,299
Silver to Gold Production Ratio 0.9 0.9
Net Silver Production - ounces 1,597 19,169
Gold Sales - ounces 1,775 21,299
Revenue per ounce $1,050 $1,050
Revenues $1,863,666 $22,363,987
Mineral Cost - Ore @ 50% using 85% Recovery $860,932 $10,331,190
Cost Per Tonne without Mineral Cost $60.00 $60.00
Credit Silver Sales - $15 per ounce $23,961 $287,537
Total Cost with Mineral $1,220,932 $14,651,190
Operating Cost / Ounce Au $687.88 $687.88
Operating Cost / Tonne $203.49 $203.49
Typical local artisanal mine
Cash Margin $642,733 $7,712,797
Government 3% $55,910 $670,920
Imisa 1% Royalty $18,637 $223,640
Income Before Tax and Depreciation $568,186 $6,818,238
A Qualified Person has not done sufficient work to confirm or validate this cash flow.
“Cocos” use mercury amalgam behind the family house
10

SMALL MINE SELECTION CRITERIA
Para has established criteria for other prospective mining operations. These criteria are:
• Gold Mineralization at surface: Free gold in weathered surface rock. Either in saprolite or
alluvium.
• Low cost, economically viable gravity separation: Processing costs under $600 per ounce.
• Near Term Production: a clear path through quantification, permitting and construction to
see production in less than 2 years
• Low Capex: Total capital to get to production of less than $3 million resulting in payback in
less than 18 months
• Blue Sky Potential: An unknown or poorly quantified resource in the hard rock that can be
proven up through drilling. Drilling and additional exploration costs to be financed by cash
flow generated in mining surface gold.
Ø Angelim, Para State, Brazil meets all criteria
11

ANGELIM PROPERTY, BRAZIL
Mr. Paulo Andrade, P. Geo.,
qualified person under
National Instrument 43-101,
VP & Country Manager for
Para Resources Inc., has
reviewed and approved the
scientific and technical
information in this section
pertaining to the Angelim
Property, near Tucuma, Para
State, Brazil.
12

ANGELIM PROPERTY
• Para has conducted extensive work on the Tucuma property in Para State, Brazil over
the last 3 years.
• Geophysical, geo-chemical, soil sampling, drilling and trenching work has been
conducted.
• Vein system at surface with mineralized saprolite to 20 M + depth.
• Recently filed (2015) report by Paulo Andrade to the Brazilian DMPN standard
indicating a “free” gold resource in the to 20 meters of surface material in Zone 1 (of
four identified) of 55,000 ounces at an average grade of 4.28 gpt. The potential
quantity and grade is conceptual in nature. There has been insufficient work to
report a NI 43-101 mineral resource or reserve. It is uncertain if further work will
result in the delineation of a NI 43-101 reportable mineral resource or reserve.
• Drilling indicates the vein system is open at depth (150 M) at an average width of
approximately 10 meters and an average grade of 20 gpt.
• Focused on economically viable surface material for time being.
• Mining license for 100,000 T at surface has been applied for and is expected to be
granted before the end of 2015.
13

Angelim Property – Location and geological map
CARAJÁS MINERAL PROVINCE: A huge world class multi-commodity province, including prior Fe, Au,
Cu, Ni, Mn deposits and also PGE, Sn, W, REE and U occurrences and as byproduct of the main
deposits.
14

Angelim Property – Location and geological map
• Two targets comprise Angelim
Property: Angelim & Serrinha .
• In Angelim Target the large
anomalous geochemical
signature was separated into 3
zones for trenching and drilling,
where mineralization was more
evident by outcrops and small
old workings.
• Serrinha Target was a historical
gold-copper open pit mine
during the 80’s
15

Angelim Property – Zone 1 Trenching and Drilling Results
ZONE
ZONE I
ZONE II
ZONE III
CHANNEL
WIDTH AVERAGE GRADE
(m)
Au (g/t)
CHN-005 / CHN-006 11.55 20.25
including 4.80 44.86
CHN-023 12.00 4.56
including 8.00 6.78
or 4.00 12.86
CHN-023 10.00 2.60
including 7.00 3.53
CHN-027 6.00 22.72
including 4.00 33.88
CHN-028 8.00 27.57
including 3.00 69.17
CHN-029 5.00 15.88
including 2.00 36.32
CHN-009 / CHN-010 8.60 3.26
including 1.20 5.09
CHN-015 23.00 0.61
including 7.00 1.14
or 2.00 3.03
MAX. GRADE
Au (g/t)
73.98
14.76
12.62
88.99
118.50
57.76
5.09
5.43
16

Angelim Property – Historical Resource
Mineralized ore body
Northern segment
Fault Plane
ANGELIM TARGET ZONE I - MEASURED + INDICATED RESOURCES
Cut-off Grade
(Au_g/t)
Grade
(Au_g/t)
Mass
(tonnes)
Metal
Au (oz)
Metal
Au (tonnes)
0,00 4,28 394.875,64 54.284,64 1,688
0,25 4,28 394.875,64 54.284,64 1,688
0,30 4,28 394.875,64 54.284,64 1,688
0,50 4,37 385.103,67 54.158,32 1,684
0,75 4,46 376.702,29 53.977,11 1,679
1,00 4,64 358.191,45 53.456,23 1,662
1,25 4,81 341.990,94 52.865,17 1,644
1,50 4,95 327.990,15 52.245,23 1,625
1,75 5,14 310.175,86 51.310,68 1,596
2,00 5,57 273.967,93 49.102,74 1,527
Mineralized ore body
Southern segment
Measured and Indicated Resources only counts
the mineralization present in the saprolite and
saprock materials.
The potential quantity and grade is conceptual in
nature. The work is reliable however there has
been insufficient reporting to define an NI43-101
mineral resource or reserve. It is uncertain if
further work will result in the reporting of an
NI43-101 mineral resource or reserve.
17

Angelim Property – Zone 1 Initial Tests
3 samples of 90 kg each were sent to NOMOS Laboratory for Initial Metallurgical Tests
AMALGAMATION PROCESS:
During this stage, chemical process
simulates the physical activities of
gravimetry.
Au Head Cont: 22,11ppm
Au Head Cont: 5,10 ppm
Average recovery of the contained gold
by gravity was 57%
CYANIDATION PROCESS:
The three samples analyzed recovered 90%
of the Au, in particle sizes below 0.25 mm,
in a period between 14 to 16 hours by
cyanidation leaching.
An ideal grinding granulometry of 0,150mm
is taken as optimal, once the samples
showed about 50% by weight in this size
range (BS001-46,9%; BS002 59.47%; BS003-
45,08%).
Au Head Cont: 4,69 ppm
Based on these characteristics, a small scale
contained, closed loop CIL/CIP modular
processing plant has been selected.
18

Angelim Property – Proforma Cash Flow*
Historical – Previously Reported – Non 43-101
DESCRIPTION
UNID
YEAR YEAR YEAR YEAR YEAR YEAR YEAR YEAR TOTAL
-1 1 2 3 4 5 6 7
GROSS INCOME US$ 10.752.412 10.752.412 10.535.531 6.314.140 6.314.140 6.314.140 6.314.140 57.296.913
STATE TAX (PIS,COFINS,ICMS) US$ -1.854.791 -1.854.791 -1.817.379 -1.089.189 -1.089.189 -1.089.189 -1.089.189 -9.883.718
GROSS INCOME TO CALCULATE CFEM US$ 8.897.621 8.897.621 8.718.152 5.224.951 5.224.951 5.224.951 5.224.951 47.413.196
CFEM (FINANCIAL COMPENSATION FOR MNERAL EXTRACTION) US$ -88.976 -88.976 -87.182 -52.250 -52.250 -52.250 -52.250 -474.132
COSTS US$ -1.707.740 -1.956.740 -1.675.238 -1.349.922 -779.522 -779.522 -779.522 -9.028.203
GROSS PROFIT US$ 7.100.905 6.851.905 6.955.732 3.822.780 4.393.180 4.393.180 4.393.180 37.910.860
DEPRECIATION US$ -605.620 -605.620 -605.620 -605.620 -605.620 -605.620 -605.620 -4.239.338
GROSS PROFIT (-DEPRECIATION) US$ 6.495.285 6.246.285 6.350.113 3.217.160 3.787.560 3.787.560 3.787.560 33.671.522
INCOME TAX (IR) US$ -2.688.103 -2.688.103 -2.633.883 -1.578.535 -1.578.535 -1.578.535 -1.578.535 -14.324.228
CSLL (COMPENSATION OVER NET INCOME) US$ -967.717 -967.717 -948.198 -568.273 -568.273 -568.273 -568.273 -5.156.722
NET PROFIT US$ 2.839.465 2.590.465 2.768.032 1.070.352 1.640.752 1.640.752 1.640.752 14.190.572
CAPEX US$ -3.237.838 -189.000 -105.000 -105.000 -52.500 0 -275.000 -275.000 -4.239.338
CASH FLOW US$ -3.237.838 3.256.085 3.091.085 3.268.652 1.623.472 2.246.372 1.971.372 1.971.372 14.190.572
CUMULATIVE CASH FLOW US$ -3.237.838 18.247 3.109.332 6.377.984 8.001.456 10.247.828 12.219.200 14.190.572
NPV (10,0%) US$ 8.509.753
NPV (10,0%) R$ 24.678.285
IRR 93%
*Angra Metals Mineraco Ltda.DNPM Exploration Final Report Process Number 851.047/2005
A Qualified Person has not done sufficient work to confirm or validate this cash flow.
19

MANAGEMENT AND BOARD
Geoff Hampson CEO: A Seasoned Entrepreneur, with 35 years of experience in mining, oil and gas, manufacturing and internet infrastructure.
Business experience and contacts on all continents. He has founded and financed many private and public companies since 1979. CEO of
Fibrox Technology Ltd., since 1995, former CEO of Live Current Media Inc., Corelink Data Centers, LLC , Pacific Rodera Energy and Peer 1
Network Enterprises.
Luiz Bizzi CEO of Para’s Brazilian subsidiary and Director: A Brazilian Professional Geologist with over 25 years of experience in minerals
exploration BD in South America. PhD Geology, MBA. Editor of “Geology, Tectonics and Mineral Resources of Brazil” 2003. Extensive minerals
exploration experience in South America including with BHP Billiton, as Director of Geology and Mineral Resources at CPRM and at the
Brazilian Development Bank. Presently President and CEO of Rio Grande Mining Co.
Ioannis Tsitos, Director: A Geophysicist and Businessman with 19 years with BHP Billiton, the last 9 in the position of senior business
development manager on minerals exploration with a global reach having worked on exploration deals in 32 countries. Has identified,
negotiated and executed in excess of 55 exploration, development and mining agreements and Joint Ventures. Extensive global network
(exploration, mining, finance)
Paulo J. Andrade VP and Brazil Country Manager: A Geologist with 27 years of experience in Brazil and South America. Extensive knowledge
and experience in managing exploration teams and in identifying new business opportunities. Brought at least two important copper projects
for VALE ´s portfolio in Peru as well as discovered five lateritic nickel and one iron ore deposits for CODELCO in Brazil. He had also an
important participation on the Rio Verde Cu-Au deposit discovery at Carajás Province for BARRICK.
Randy Martin, CEO and Chairman of Colombia Milling Limited: , Mining Engineer and Expert in Custom Milling and Mining. Developed
Hemco Nicaragua, a 1,200 tpd underground and open pit mine with two gold recovery plants processing ore from legal artisanal miners. 90%
sold to Mineros SA for US$96.8M . Constructed and operated the Santa Rosa open pit gold mine in Panama, the La Libertad open pit and
underground gold mine in Nicaragua, the San Andres open pit gold mine in Honduras. Operates the El Limon underground gold mine in
Antioquia Colombia and constructing two 150 tpd toll milling operations in Nicaragua for small miner cooperatives.
James Taylor, CPA: CFO of Para Resources. A financial professional with over 30 years of experience as a senior officer of numerous emerging
technology, manufacturing and resource companies. Formerly CFO of Novocon International Inc, Peer 1 Network Inc, Corelink Data Centers
LLC, Infracon Energy Services Corp, Fibrox Technology Ltd. Has acted as Director of numerous public companies in Canada and the USA
20

SHARE CAPITAL
Total shares o/s:
Warrants o/s:
Options o/s:
32,364,325 (25.98 million held by management and insiders)
9,728,494 @$0.10 per share (70% by management and
insiders)
2,505,243 (exercisable at between $0.05 to $0.075 per share)
Market cap: $4 million as at September 30, 2015
Major Shareholders; Lake Forest Dev Corp (Hampson): 15,148,192 shares (46.8%),
Paulo Brito 6,440,500 shares (19.8%)*,
Conex Services Inc (Glenn Walsh) 2,398,094 (7.4%),
Public float: 7,377,539 (22.7%) (2.3 million of which have a
cost over $1.00 per share)
Financing: Para plans to raise $4 million to support the above programs at $0.12 per
share with a half warrant at $0.18 for 18 months (Insiders and Management are
committed to a lead order of $2.0 million)
* Not yet issued but committed to issue at closing
21

TOLL MINING COMPARABLES
Toll Mining Comps.
Current Planned
Ticker Price Shares Mkt Cap Cash Debt EV Capacity Capacity EV/Capacity
(C$) (mm) (C$ mm) (C$ mm) (C$ mm) (C$ mm) TDP TPD (C$/TPD
Dynacor Gold Mines Inc. DNG.TO $ 1.81 36.32 65.74 18.81 - 46.93 300 600 78,216
Inca One Gold Corp IO.V $ 0.16 69.69 11.15 1.20 9.00 18.95 100 250 75,802
Anthem United Inc AFY.V $ 0.35 82.50 28.88 5.14 1.94 25.67 - 560 45,845
Para Resources Inc (post financing) PBR.V $ 0.12 65.36 7.84 2.00 - 5.84 80 200 29,200
Standard Tolling Corp TON.V $ 0.09 54.45 4.90 3.87 4.61 5.64 30 350 16,121
Montan Mining Corp MNY.V $ 0.13 36.32 4.72 3.00 0.18 1.90 - 150 12,677
22

SUMMARY
• Projected 2016 cash flow from el Limon using feed material from the mine and supplement ed by material sold by
artisanal gold miners. Operational cash flow from similar operation is USD $6-7 million.
• A portion of the proforma cash flow to be distributed to the shareholders by way of a special dividend.
• NI 43-101 Report on existing El Limon underground mine in Colombia to supplement contract milling.
• Experienced and proven Board and Managem ent including Paulo Brito, the founder of Yamana Gold as a major
shareholder
• Low monthly corporateoverhead of under $50,000 for both head and Brazilian office.
• Managem ent and Insiders have invested over USD $ 2 mm and have committed to a lead order of $2 mm in this
financing
• Company is now raising $ 4 million to expand milling operations to 200 TPD at El Limon and to finalize resource
calculation and feasibility studies on Angelim properties.
• Market cap of CAD $ 4 mm
• Two-ticket investment structure (i) share ofmilling company (already in production) and (ii) share of mining company
with highly prospectiveproperties.
23