Para Resources Announces Final Close of Over-Subscribed Private Placement - $5.4M Raised in All Tranches
VANCOUVER, BRITISH COLUMBIA--(Marketwired - June 19, 2017) -
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Para Resources Inc. (the "Company" or "Para") (TSX VENTURE:PBR)(WKN:A14YF1)(OTC PINK:PRSRF) is pleased to announce that it has closed the final tranche of its non-brokered private placement (the "Private Placement") for total gross proceeds of $2,993,950. Total proceeds for all tranches of the previously announced $4 million financing, was $5,383,025. The final tranche of the Private Placement consisted of 14,969,750 units at a price of $0.20 per unit (each a "Unit"). Each Unit is comprised of one common share of the Company and one-half common share purchase warrant (each whole such warrant a "Warrant"). Each Warrant entitles the holder to acquire one common share of the Company for a period of 18 months at a price of $0.30. Finders' fees in cash and 127,750 non-transferable finder's warrants (having the same terms as the private placement warrants) were issued in connection with this final closing. All securities issued under the Private Placement bear a four month and one day hold period. Proceeds of the Private Placement will be used to retire a portion of acquisition debt for the purchase of the El Limon Mine from Red Rock Resources, to pay the balance of the purchase price due for the OTU property, to acquire the surface rights to land associated with the El Limon Mine, for a drilling program at El Limon to twin historical holes drilled in 1997 and 1998, for due diligence expenses related to additional projects under consideration and for general working capital.
Geoff Hampson, Para's CEO said, "We are very pleased at the interest shown by the investment community including an investment of $750,000 from Palisade Global Investments Ltd. Several other funds, family offices and high net worth individuals also participated, resulting in the Private Placement being over-subscribed by 34.5%. Investors were impressed with our business model and the progress we have made in achieving our goal of becoming a mid-tier gold producer. The Company has a number of new initiatives underway including looking closely at potential new acquisitions that meet our investment criteria. The previously announced acquisition of Nicaragua Milling Company is slightly behind schedule but is expected to close within the coming weeks. The Company is also planning additional investment at El Limon to improve efficiency and for an exploration drilling program to twin historical drill holes from 1997 and 1998 which indicated additional mineralization outside of the vein system currently being mined on the property."
Two insiders of the Company participated in the final tranche of the Private Placement and subscribed for an aggregate of 3,125,000 Units for gross proceeds of $625,000. Participation of insiders of the Company in the Private Placement constitutes a related party transaction as defined under Multilateral Instrument 61-101 (Protection of Minority Security Holders in Special Transactions). Because the Company's shares trade only on the TSXV, the issuance of securities is exempt from the formal valuation requirements of Section 5.4 of MI 61-101 pursuant to Subsection 5.5(b) of MI 61-101 and exempt from the minority approval requirements of Section 5.6 of MI 61-101.
The Company did not file a material change report 21 days prior to the closing of the private placement as the details of the participation of insiders of the Company had not been confirmed at that time.
ABOUT PARA RESOURCES:
Para is a junior producing gold mining and toll milling company. Para owns approximately 75% of the El Limon project, in Colombia, which in addition to its current underground operation has toll milling opportunities, and exploration and development upside. In addition, the Company has applied for the necessary permits to commence trial mining operations at its Angelim prospect on the Tucuma Project in Para State, Brazil. Para will continue to take advantage of current market conditions to acquire and develop additional highly economic, near-term production assets that have strong exploration and development upside.
On behalf of the Board of Directors
C. Geoffrey Hampson, Chairman, Chief Executive Officer and Director
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
Cautionary Note Regarding Forward-Looking Statements
Statements contained in this news release that are not historical facts are "forward-looking information" or "forward-looking statements" (collectively, "Forward-Looking Information") within the meaning of applicable Canadian securities laws. Forward Looking Information includes, but is not limited to, disclosure regarding possible events, conditions or financial performance that is based on assumptions about future economic conditions and courses of action; the timing and costs of future activities on the Company's properties; success of exploration, development and mill processing activities; and the closing of potential new acquisitions. In certain cases, Forward-Looking Information can be identified by the use of words and phrases such as "plans", "expects", "scheduled", "estimates", "forecasts", "intends", "anticipates" or variations of such words and phrases. In preparing the Forward-Looking Information in this news release, the Company has applied several material assumptions, including, but not limited to, that the current exploration, development, mill ramp up and other objectives concerning El Limon can be achieved. Forward-Looking Information involves known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the Forward-Looking Information. There can be no assurance that Forward-Looking Information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on Forward-Looking Information. Except as required by law, the Company does not assume any obligation to release publicly any revisions to Forward-Looking Information contained in this news release to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
