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Parallel Mining — Growth Through Exploration Success in Burkina Faso

Overview

Parallel Mining (TSXV:PAL) is a Vancouver-based gold exploration company focused on advancing concessions in Burkina Faso, West Africa. Its flagship project is the Garsay property, which had been previously optioned by Newmont Mining (NYSE:NEM) in 2014. The company also recently entered an option agreement to acquire the Sebedougou property – an 82-square-kilometer land package located between Endeavour Mining’s (TSX:EDV) Hounde project and Acacia Mining’s (LON:ACA) South Hounde deposit.

Located in the same gold belt as the producing Inata gold mine, the Garsay project is Parallel Mining’s primary focus for the remainder of 2017. Following up on extensive exploration by Newmont, recent deep drilling on the South Target shows the potential for a high-grade deposit that could be mined by open pit and underground methods.

Parallel Mining brings deep management experience to the table in Burkina Faso, along with good relationships with government officials and past geological success in the country. Four members of the current team, Allan Fabbro, Bob Sibthorpe, Nestor Kinane and Matt MacKenzie, all worked for Roxgold (TSXV:ROG), whose Yaramoko project in southwestern Burkina Faso started commercial production in 2016. “We think we’ve got a Yaramoko look-alike,” says Parallel Mining CEO & Director John Anderson.

The company’s growth strategy for investors is to build up early-stage projects through exploration, add shareholder value, and then sell them off. “We think we’ve got the tiger by the tale on Garsay,” Anderson says about Parallel Mining’s main property.

Pro-mining Burkina Faso is one of the largest gold-producing countries in Africa. The country was ranked fourth in the continent and 23rd globally in the Current Mineral Potential Index in The Fraser Institute of Canada’s “Survey of Mining Companies 2014.” There are currently seven gold mines in production in Burkina Faso, which has excellent geological potential.

With less than 15 years of modern mineral exploration, Burkina Faso remains under-explored compared to neighboring Ghana and Mali. “Burkina Faso is one of the last places in the world where there’s low-hanging fruit and a mining history,” says Anderson.

Gold mining is the largest and most important industry in the Country. The government’s emphasis on infrastructure improvements for mining, including the creation of new roads and paving major routes.

Investment Highlights

  • Garsay project has already been heavily explored and shows significant upside for fresh discoveries
  • Recent acquisition of a second property, showing potential for new project pipeline
  • Record of management success in Burkina Faso, including the discovery of Roxgold’s producing Yaramoko gold mine
  • Management and directors hold almost 20 percent of the shares
  • Mining-friendly jurisdiction that is relatively unexplored compared to neighboring African countries

Key Projects: Garsay Project

Parallel Mining holds an exploration permit for the Garsay property located about 220 kilometers northeast of the capital, Ouagadougou. The rectangular-shaped property encompasses 165 square kilometers and sits atop of the Djibo greenstone belt – the same geological trend hosted by the adjacent Inata gold mine, which is 30 kilometers away from Garsay. The Inata deposit comprises 4.6 million gold ounces and the mine, operated by Avocet Mining, produces around 140,000 ounces annually.

Parallel-Mining-Garsay-Map

The geology at Garsay includes basic volcanic basalts, andesites and dacites, basic intrusive (gabbro, dolerite) and acid intrusive rocks (granite, granodiorite porphyry usually with feldspar). Gold mineralization is associated with quartz veins occurring in foliated mafic volcanics.

Groundwork by Newmont

In 2014 Parallel Mining acquired Garsay, which had been previously optioned by Newmont Mining, who had done extensive exploration on the property between 2010 and 2013. The Colorado-based gold major spent over $2 million on geophysics, soil and pit sampling, along with 166 drill holes totalling 12,355 meters. The exploration program identified a gold anomaly, G1N, which extended over 1,500 meters north to south and 500 meters east to west. Newmont also did 1,467 meters of air core drilling, 9,407 meters of reverse circulation drilling and 1,508 meters of diamond drilling – with the latter yielding results from a few grams of gold per tonne to over 100 g/t, with many results in the teens to low 20s.

However in 2013 Newmont dropped its option on the Garsay permit as part of its decision to withdraw from Burkina Faso to focus on Ghana. That opened up an opportunity for Parallel Mining to option the property and extend the exploration program that Newmont had started.

In 2015 Parallel Mining contracted a Burkina Faso company to conduct a 17-hole round (1,062 meters) of rotary air blast drilling (RAB) designed to test the near-surface mineralized zones identified by Newmont. The RAB drill intercepts ranged from 0.66 grams per tonne to 12.39 g/t, including a 4-meter intercept showing 33.7 g/t. The upshot of the RAB program was that the mineralization found by Newmont extended along the strike zone. It also showed a mineralized structure, WS1, comprised of 100 meters along strike and 200 meters at depth, with the potential for other parallel gold-bearing structures.

“Based on a thorough review of existing exploration data combined with a property visit where check samples were collected and analyzed returning gold results, it is the author’s professional opinion that the Garsay Exploration Permit constitutes a property of merit and should be further investigated to define the economic viability of the gold occurrences identified on them to date,” reads an NI 43-101 report on the Garsay project dated May 13, 2015.

Recent exploration

While Newmont’s work focused on a low-grade bulk tonnage deposit at Garsay, exploration between 2014 and 2016 aimed to identify higher-grade intercepts. Recent work has confirmed prior high-grade zones, and discovered extensions and new zones.

parallel-mining-garsay-exploration-results

On its South Target, limited deeper drilling indicated high gold grades in multiple veins at over 200m in depth, showing the potential for a high-grade deposit that could be mined by open pit and underground methods.

Parallel-Mining-Target-Map

 

Management

John Anderson – CEO & Director

John Anderson has founded, helped found and managed numerous companies,  successfully raising over $500 million in equity for a number of public and private companies in the United States, Canada and Europe. He has been directly responsible for numerous IPO’s and cross border public listings. His specialty is identifying undervalued opportunities and investing capital into these initiatives, and driving marketing and sales with a strong focus on corporate development. Currently he is president of Purple Fish Capital, chairman of Northern Freegold Resources and director of American Eagle Energy.

Allan Fabbro – Lead Director

Allan Fabbro has over 30 years’ experience in both the finance and mining industries. From 1984 to 1990, he headed the retail trading department at Yorkton Securities, followed by six years with Yorkton’s Natural Resources Group. After working for 10 years as an investment advisor with Canaccord Capital, specializing in the natural resource sector, Fabbro left to become Lead Director of Roxgold Inc. During his tenure, Roxgold was named the top company on the TSX Venture 50 and raised in excess of $60 million in equity financing.

Robert Sibthorpe, B.Sc (Geol), MBA – Vice President, Exploration

Robert Sibthorpe has extensive experience in the mineral exploration sector, working in geology and business development with senior mining companies including Noranda, Falconbridge and Ivanhoe Mines. He also served as a research and corporate finance analyst in the Canadian securities industry with Midland Doherty, Yorkton Securities, and Canaccord Genuity. He has been involved in the discovery, development or financing of numerous world-class mineral deposits, including Eskay Creek, Petaquilla, Oyu Tolgoi, and Fire Creek. In 2010-2012, as President and CEO of Roxgold Inc., he pioneered a new geological model in Burkina Faso, which resulted in the discovery of the high-grade Yaramoko gold deposit.

Matt MacKenzie, JD, MBA – Vice President, Legal Affairs

Matt MacKenzie began his career in finance with GE Capital and BMO Capital Markets. There he worked directly with clients in diverse fields including mineral exploration and production, oil and gas services, and transportation. Holding both a law degree and an MBA, he currently works with Midnight Sun Mining as Manager of Business and Legal Affairs, and previously served Roxgold Inc. in the same capacity.

Rakesh Patel, CPA – Chief Financial Officer

Rakesh Patel oversees the financial reporting requirements of Parallel Mining Corp. He has over 20 years of experience in the public markets providing assurance services to a varied client base. Patel is a partner in the firm of DMCL LLP and provides audit and advisory services to Canadian and U.S. public companies primarily in the fields of mining, oil and gas, real estate development, bio-technology, manufacturing, forestry and high tech.

Nestor Kinane, M.Geo – Country Manager

Nestor Kinane began his exploration career in Burkina Faso with Riverstone Resources and Caracal Gold. He then worked with Iamgold at their Essakane mine, and the Yaramoko high-grade gold deposit as a Project Geologist, and then as Senior Geologist with Roxgold. He has a large network of professional resource sector contacts in West Africa and holds a Masters Degree in Fundamental and Applied Geology.

Stephen J. Wilkinson, B.Sc. / M.Sc. Geology – Director

An experienced mining executive, consultant and director, Stephen J. Wilkinson is currently President & CEO and director of WPC Resources Inc. and Falcon Gold Corp., and Chairman of Centurion Minerals Ltd. Past positions include President & CEO of ValGold Resources, Chairman of NovaDx Ventures and of HMZ Metals, and a director of numerous resource sector companies. He was also president and director of several resource investment funds and has an MBA from Clarkson University, M.Sc. Geology from Carleton University and B.Sc. Geology from the University of Western Ontario.

Jan Urata – Corporate Secretary

Jan Urata provides corporate compliance and corporate secretarial services to the company. She gained her training and expertise specializing in corporate finance and securities matters from top-notch Vancouver law firms, notably Catalyst Corporate Finance Lawyers, Lang Michener LLP (now McMillan LLP) and Clark Wilson LLP before she set out to start her own business, assisting private and public companies with day-to-day as well as complex corporate transactions.

 

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