Coro Mining to acquire 75% of Marimaca project in Chile

Aug 13, 2014

CORO SIGNS LETTER OF INTENT TO ACQUIRE NEW COPPER OXIDE PROJECT

Coro Mining Corp. has signed a letter of intent with a local private company, SCM Compania Minera Constanza, to acquire an interest in the Marimaca copper oxide prospect, located close to the city of Antofagasta in the II region of northern Chile. Coro also announces the termination of the Payen property option.

Alan Stephens, president and chief executive officer of Coro, commented: “We are pleased to have identified and agreed terms to acquire this exciting prospect. Despite the absence of prior drilling, broad zones of copper oxide mineralization, well exposed on the hillside and currently being mined by open-pit methods, provide a significant and low-risk target. We are confident that a viable leachable copper oxide resource meeting our criteria can be rapidly defined at Marimaca, and if so, its excellent location ensures there should be no impediment to its expeditious development.”

About Marimaca

Located 56 kilometres north of Antofagasta and approximately 22 kilometres from the coast at Mejillones, Marimaca comprises an early stage copper oxide prospect hosted by Jurassic intrusive rocks. Mineralization is controlled by a north-northeast-oriented major structure, representing the northern extension of the same structure that hosts Milpo’s past-producing Zar and Emperatriz mines, located 12 kilometres to the south. Marimaca mineralization is located within a 500-metre-by-150-metre cymoid loop, is currently being exploited in a series of open pits over a vertical elevation difference of approximately 150 metres by mechanized artisanal miners and has potential to host 10 million to 20 million tonnes of oxides at 0.5 per cent to 0.8 per cent total copper. Further tonnage potential exists in the underlying primary sulphides. The property has never been drilled, and Coro intends to conduct surface sampling and mapping during its 90-day due diligence period.

The agreed purchase terms for Coro to own a 75-per-cent interest are as follows:

$10,000 payment on signature of letter of intent (paid);
$40,000 payment on Feb. 6, 2015;
$125,000 payment on formation of Newco (51 per cent Coro) on completion of a National Instrument 43-101-compliant resource estimate and engineering study that demonstrates the technical and economic feasibility of producing a minimum of 1,500 tonnes copper per year as cathode by Aug. 6, 2018, at Coro’s cost;
Additional 24-per-cent interest in Newco earned by Coro upon obtaining financing for the project construction;
The owners’ interest will comprise a 15-per-cent interest free carried to commencement of commercial production (as defined above), and a 10-per-cent participating interest subject to dilution; the owners, at their election, may request Coro to loan them the equity portion corresponding to their 10-per-cent interest, if any. This loan plus applicable interest would be recoverable by Coro from 100 per cent of the project’s free cash flow after debt repayments;
First right of refusal over Constanza’s interest.

Payen

The company has been advised by Minera Freeport-McMoRan South America Ltda. of its decision not to proceed with the option of the Payen project. Freeport completed 11 diamond drill holes for 3,592.1 metres, as well as ground geophysics, geochemistry and geological mapping. Four of the drill holes intersected low-grade copper (0.15 per cent to 0.22 per cent copper) and gold (0.04 gram per tonne to 0.24 gram per tonne gold) porphyry-style sulphide mineralization over lengths of 54 metres to 220 metres. Coro has concluded that these results, while interesting, are not sufficiently encouraging to justify continuing with the project and has terminated the underlying option.

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