Coro Mining signs LOI to acquire Minera Rayrock

Aug 4, 2016

CORO SIGNS LETTER OF INTENT TO ACQUIRE SXEW PROCESSING PLANT FOR MARIMACA PROJECT

Coro Mining Corp. has signed a non-binding letter of intent to acquire Minera Rayrock Ltda., a Chilean subsidiary of Compania Minera Milpo SAA, a Peruvian mining company.

Rayrock is the owner of the Ivan SXEW (solvent extraction and electrowinning) plant located approximately 18 kilometres south of the company’s Marimaca project, as well as 23,748 hectares of mining claims (Ivan claims) extending between Marimaca and Ivan. The Ivan plant has an installed capacity of a 12-kilotonne-per-year copper cathode and operated from 1995 until 2012, when it was placed on care and maintenance. It has associated water rights and environmental and operating permits, some of which require updating. Coro has completed an initial examination of the plant and believes that it is in good condition, and can be expeditiously placed back into production for a reasonable cost.

The essential terms of the LOI are as follows:

Payment of $250,000 (U.S.) on signature (paid) of the LOI in return for exclusivity to conduct due diligence for a period of 60 days, extendable to 90 days under certain circumstances;
Closing period of 30 days to negotiate and execute a definitive purchase agreement (DPA);
Payment of $6.25-million (U.S.) on execution of the DPA;
Milpo to retain a 2-per-cent net smelter return royalty on all production from the Rayrock mineral properties; Coro may acquire half the NSR for $2-million (U.S.) at any time and will have a right of first refusal over the NSR.

Alan Stephens, president and chief executive officer, commented, “We are delighted to have the opportunity to acquire a processing plant that will enable us to accelerate production from Marimaca and look forward to completing the purchase before year-end.”

Rayrock mineral resources

The Ivan claims host the following mineral resources, as quoted in the Milpo 2015 annual report.

Ivan                                                   Resources at end 2015

At 0.7% CuT cut-off                                                           
Category                              Million tonnes       % CuT       % CuS

Measured                                        7.62        1.35        0.55
Indicated                                      10.64         1.3        0.36
Measured and indicated                         18.26        1.32        0.44
Inferred                                        6.58        1.05        0.35

Rayrock also owns 14,505 hectares of mining claims (Sierra Medina claims) located some 42 kilometres north east from Ivan and 30 kilometres east from Marimaca. The Sierra Medina claims are quoted in the Milpo 2015 annual report to host 12.2 million tonnes at 1.18 per cent CuT and 0.86 per cent CuS at a 0.7-per-cent CuT cut-off and in an undefined resource category, as at December, 2013.

Coro has not conducted any due diligence on the Rayrock resources and makes no assurance regarding their economic viability, if any. Both the Ivan and Sierra Medina resources are believed to have been estimated to industry standards by Milpo, but are not compliant with National Instrument 43-101 and therefore should not be relied on.

Marimaca update

Drilling at Marimaca is under way with a diamond rig completing up to 2,000 metres of twin holes, and providing samples for metallurgical test work, specific gravity measurements and geotechnical information. An reverse circulation rig is also on site completing up to 7,500 metres of drilling. Results will be released in batches over the coming weeks, and the company intends to complete a resource estimate, preliminary mine plan and metallurgical column test work by year-end.

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