Mr. C. Geoffrey Hampson reports

PARA ANNOUNCES IT HAS ENTERED INTO A MEMORANDUM OF UNDERSTANDING WITH THE MISCON GROUP TO EARN UP TO 75% OF THE FINARIS MINE AND LOMAS DE CASMA PROCESSING PLANT IN PERU

Para Resources Inc. has entered into a memorandum of understanding with Mining and Solutions Construction Group SA (Miscon) whereby the parties have outlined their mutual intentions to enter into a proposed strategic alliance and earn-in agreement concerning Miscon's Finaris mine and associated concessions as well as the Las Lomas de Casma processing plant, both located in the district of Coris, province of Aija, Peru. The properties are located approximately 345 kilometres from Lima, Peru.

Para has agreed, subject to due diligence, to invest an amount of capital and expertise, expected to be between $5-million (U.S.) and $7-million (U.S.), consistent with a plan to be developed and mutually agreed to by the parties, in improvements and expansion of the assets to increase production of the assets. Para will provide know-how, technology and related administration to achieve the mutually agreed-to project goals. Upon the completion of the project, Para will earn up to a 50.1-per-cent ownership interest in the assets and the project. Prior to the signing of the definitive agreement, the parties will agree on the premoney valuation of Miscon and the relative value of the capital, equipment and expertise to be applied by Para to the project. If the value of Para's contribution does not meet the agreed-to project budget, the difference will be paid to Miscon in the form of either a cash payment or an equivalent value of Para shares, or any combination of the two at the discretion of Miscon and subject to TSX Venture Exchange approval in the case of any Para share issuances.

Para may earn an additional 25-per-cent interest in the assets upon the achievement of mutually agreed production goals and other milestones that increase the value of the assets, to be set at the conclusion of the due-diligence period.

When and if Para earns a 75-per-cent interest in the assets, Miscon will have the option, at its sole discretion, to sell the remaining 25-per-cent ownership in the assets to Para at fair market value, in cash or in common shares of Para, or any combination thereof.

The Finaris underground (gold, silver, copper and zinc) mine is located in the district of Coris, province of Aija, Peru, and is approximately 345 kilometres north of Lima, Peru. The initial mine plan by Miscon outlined a target resource of 300,000 ounces of gold at 10.1 grams per tonne and 500,000 ounces of silver, based on 591 m of development mining in galleries in only the Milagros-1 vein. The Final del Arcoiris (Finaris) mining concession includes a permit for the construction of an additional 200 tonnes per day of gold-processing plant which could be upgraded to 350 tpd with an additional permit.

In addition to the operations at Finaris, the Las Lomas de Casma plant is located in Miscon's Casma property and has a current capacity of approximately 50 tpd output but is permitted for 150 tpd. This plant will process the oxides from the Finaris mine or from third parties under toll-milling agreements. The company will evaluate options to upgrade this facility and to maximize investment returns.

Geoff Hampson, Para's chief executive officer, states: "The earn-in of up to a 75-per-cent interest in the Finaris mine and Las Lomas de Casma processing plant is consistent with Para's strategy to invest capital directly into production equipment and mine development to create near-term production and cash flow. Para's plan will include the development and expansion of the existing underground mine as well as establishing relationships with local artisanal miners. There is no other contract milling operation in the district, however, there are many high-grade small mines that are currently trucking their ore over 1,000 km, suggesting that a contract milling operation in Las Lomas de Casma will be commercially viable. The processing of third party material gives the company operational flexibility and increased short-term production. In addition to the existing underground operation, Miscon has mapped over 21 mineralized veins at surface, indicating that there is a possibility for an additional mineralized zone locations on the property."

Paulo J. Andrade, a member of the Australian Institute of Geoscientists (MAIG No. 6136), senior geologist, vice-president and country manager for Para Resources, a competant person/qualified person under NI 43-101, has reviewed and approved the scientific and technical information in this press release.

About Para Resources

Para Resources is an exploration-stage gold-mining and toll-milling company. Para owns approximately 75 per cent 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 Resources 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.

We seek Safe Harbor.