Coro arranges $19.3-million (U.S.) in financing

Mar 19, 2015

CORO ANNOUNCES FINANCING PACKAGE FOR BERTA AND DISPOSITION OF SAN JORGE

Coro Mining Corp. has released the details of a financing package for the Berta project and an agreement to dispose of its equity interest in the San Jorge project, while retaining a royalty on all production, except gold. An update on the current status of the company’s other projects, including the sale of its Chacay project royalty, is also provided.

Alan Stephens, president and chief executive officer of Coro, commented: “We are very pleased to have been able to negotiate a new financing package for Berta, given the difficult market conditions and the fall in the price of copper since the beginning of the year. We look forward to final completion of the financing, to acquiring the Nora processing plant, and to starting development and construction of the project. We are also encouraged by the initial results from the Planta Prat metallurgy, described below, and will be moving this project forward to production as quickly as possible. Finally, we are pleased to be able to continue our record of monetizing non-core assets, and wish our partners much success in getting San Jorge into production and to eventually receiving our royalty. Coro is now exclusively focused on the development of a succession of uncomplicated, high-return, financeable, copper leach projects in Chile, one of the best mining jurisdictions in the world.”

Berta update

The financing package comprises a combination of a senior secured bridge loan facility ($13.5-million (U.S.)), leasing ($1.3-million (U.S.)) and vendor financing ($3-million (U.S.)) together with an equity injection ($1.5-million (U.S.)) to provide for 100 per cent of the financing requirements for Coro’s subsidiary company, SCM Berta (SCMB), to acquire the Nora plant, to build and construct the Berta facilities, and for project working capital. The indicative term sheet for the facility is from Auramet International LLC, is repayable in 18 months, is subject to due diligence, and is expected to close and finance in April, 2015. As part of the facility, Coro will issue four million warrants to Auramet with a tenor of three years that will be priced at the lower of five cents or at a premium of a 25-per-cent premium to the 10-day volume-weighted average price at closing of the facility. The facility is conditional upon reaching final agreement on the leasing and vendor financing, and upon the equity injection, and provides for the interest and fees to be paid at the end of the facility, which results in a net $10-million (U.S.) being available to finance the Berta project.

Coro will finance the whole of the $1.5-million equity requirement and claw back the ProPipe share preferentially from production proceeds. ProPipe currently owns 18 per cent of SCMB and had the right to earn up to a 50-per-cent interest; it has agreed to forgo this right and will hold a 35-per-cent interest in SCMB upon closing of this financing package.

SCMB has extended the underlying letter of intent with the receiver of the Nora solvent extraction and electrowinning plant by 30 days. Assuming completion of the debt financing on schedule in April and final acquisition of Nora within 90 days, Coro now anticipates that Berta will be in production at the end of 2015.

Planta Prat and Marimaca updates

Coro has extended the option payment dates for the Marimaca and Planta Prat projects until April 6, 2015, in return for increasing the payments from $40,000 to $50,000 for each project. Coro has received the results from agitation leach testwork on samples from the Planta Prat residues. This indicates that recoveries of 80 per cent of total copper are achievable and with acid consumption of 16 kilograms per tonne, some of the copper oxides present being water soluble. The iron sulphate buildup issue experienced by the previous operator has been resolved by the use of proprietary technology developed by ProPipe. Coro will now proceed to complete its evaluation of Planta Prat with the objective of getting it into production as soon as possible.

San Jorge update

Coro has reached a tentative agreement with its partners, Aterra Capital and Solway Industries, whereby they will immediately advance Coro $1.3-million (U.S.) for the right to acquire a 100-per-cent interest in the San Jorge project. The acquisition of the 100-per-cent interest in the project is subject to the approval of Franco-Nevada, the underlying owner of San Jorge, and Argentinean regulatory approval, which will be sought prior to the completion of the acquisition. Coro will retain a 2-per-cent net smelter royalty (NSR) on production from the property, other than gold, in the event that Aterra and Solway develop the project. It is anticipated that the $1.3-million will be advanced before the end of March and that the revised agreement will supersede the existing definitive agreement.

Llancahue update

Further to the news release of Nov. 6, 2014, Penoles has initiated its exploration activities at this interesting project, and Coro looks forward to reporting on Penoles’s progress in due course.

About Auramet

Auramet International LLC, an international financial entity founded in Puerto Rico in 2014, is a subsidiary of Auramet Trading LLC, a Delaware limited liability company. Starting in 2004, Auramet provides a broad array of services to the metals industry in four business units: physical precious metals trading; merchant banking; project and corporate finance advisory; and resource fund management.

http://www.coromining.com/s/newsreleases.asp