Para Resources pours first doré at Gold Road

Para Resources (TSXV: PBR; US-OTC: PRSRF) has poured the first doré bar at its Gold Road mine in Arizona, 24 km northeast of the state’s borders with California and Nevada.

Ian Harris, the company’s president, expects the mine to produce a doré bar two to three times a month before ramping up to 2,500 to 3,000 oz. gold per month during the first quarter of next year.

“The doré pour was a significant milestone, bringing the full production cycle to completion from mining through milling, processing and smelting,” Harris says. “This is by far our flagship and the most significant project that we have.”

Para Resources acquired the underground mine along with a 500-tonne-per-day, carbon-in-pulp mill and processing facility in 2017, when it bought an 88% stake in Gold Road Mining for $7 million.

Two privately held Colorado-based companies, Four C Resources and Bauer Resources, each own 6%.

Since the acquisition, the company has spent US$5.7 million on repairing the mill and refurbishing the mine, equipment and development, which included extending haulage roads, building infrastructure and ventilation, and removing groundwater from the mine.

Harris says the capital expense numbers will be finalized once the mine reaches commercial production.

According to a preliminary economic assessment (PEA) it completed in 2018, Gold Road has a seven-year mine life and an initial mining rate of 250 tonnes per day at an all-in sustaining cost of US$632.79 per oz. gold, based on a US$1,200 per oz. gold price.

The mining rate will increase to 500 tonnes per day in the third year of production. The PEA forecast an after-tax net present value of US$56.7 million at a 5% discount rate and a 174% after-tax internal rate of return.

The mine has inferred resources of 978,000 tonnes grading 7.54 grams per tonne for 214,000 contained oz. gold. The deposit is open at depth and on strike.

Para Resources’ Gold Road gold mine in Mohave County, Arizona, 24 km from the Arizona-California-Nevada border. Credit: Para Resources.

The company is using Alimak machines to open new production raises, provide access to higher-grade material and improve airflow to the lowest levels of the mine.

“The Alimaks require an upfront capital, but they are one of the lowest-cost mining methods that we have available to us,” Harris says. “It really accelerates our ability to increase our production over the short-term and at a significantly lower price.”

In early 2018, Para Resources acquired claims on the Tr-Ue vein, 1.6 km from the Gold Road mill. The claims included historic mines that had been shut down in the 1930s during World War II.

The area had been explored by different operators in the past, but Harris says Para is the first company to assemble smaller claim packages into a single land package.

“This project will be a driver for exploring the region that has never been [in] a single group’s hand before,” he says.

The company recently completed a nine-hole drill program focusing on the Tr-Ue vein. The drill program “was developed to make sure we could tie in all that old information with modern surveys and confirm the gold-bearing structures,” Harris says. “We have achieved that goal.”

The company is interpreting the data from its latest drill campaign after releasing results from the first four holes of its nine-hole program.

Drill hole 2 intersected 5 metres in a quartz-calcite vein, which averaged 9.39 grams gold per tonne, including a 2-metre intercept of 13.61 grams gold, while hole 6 returned 3 metres at an average grade of 11.55 grams gold, and hole 7 cut 1 metre of 13.99 grams gold.

The next exploration program will focus on prospect drilling along the Tr-Ue vein.

“We will continue to look for opportunities within the area now that we have built this centre of gravity here,” Harris says of the Gold Road mine. “It has enormous potential.”

Hiring skilled miners is also a priority.

“The biggest obstacle for us in this area is the competition for quality miners,” says Harris, adding that it takes expertise to extract mineralization from the narrow, high-grade Tr-Ue vein. “We need the top-notch miners, and there is definitely a limitation to the number that exists in the U.S., and nowadays.”

The mineralization at the Gold Road mine consists of quartz-calcite-adularia veins within the northwest-trending Gold Road fault zone. The fault zone can reach over 46 metres wide, and quartz veins may occupy one or more strands within the structure. Vein strands usually occupy the footwall, hanging wall or a central part of the structure, but strands may occur in two or all three of these positions within the same area.

The company has raised $10.8 million this year through non-brokered private placements and the proceeds will be used for general corporate and working capital purposes.

Outside the U.S., Para Resources owns the Limon gold mine in Zaragoza, Colombia, and the Tucuma project in Brazil.

Eric Sprott owns 3.9% of the company’s common shares, and insiders, 67%.