Panoro Minerals Ltd. (TSX-V:PML) (Lima:PML) (Frankfurt:PZM)
(“Panoro” or the “Company”) is pleased to announce the closing of
the non-brokered private placement of 36,717,817 units at $0.18 per
unit for gross proceeds of $6,609,207. Each unit is comprised
of one common share and one-half share purchase warrant. Each
whole share purchase warrant is exercisable at a price of $0.27 per
common share for a period of 24 months from the closing date of the
financing. The financing includes filling of the overallotment
limit as per the terms announced on August 8, 2016. Closing of the
financing is subject to all regulatory approvals, including the
approval of the TSX Venture Exchange. The securities issued in
connection with the financing bear a four-month restriction on
resale from the completion date.
Resource Capital Fund VI L.P. (“RCF VI”) has
subscribed to 14,233,333 units of the private placement for
proceeds of $2,562,000. Resource Capital Funds (“RCF”) is a
group of commonly managed private equity funds, established in 1998
with a mining sector specific investment mandate spanning all hard
mineral commodities and geographic regions. Since inception, RCF
has supported 155 mining companies, with projects located in 49
countries and across 29 commodities. The sixth fund, Resource
Capital Fund VI L.P. (“RCF VI”) with committed capital of $2.04
billion, is now being invested. Further information about RCF can
be found on its website (www.resourcecapitalfunds.com).
The Company also announces that Hudbay Minerals
Inc. ("Hudbay") has exercised its pre-emptive right to participate
in the private placement and thereby maintain its pro-rata
ownership in Panoro of approximately 11.1%. A total of 4,120,968
units were issued and sold to Hudbay for proceeds of $741,774.
Kallpa Securities SAB acted as lead agent for
the placement of a total 16,799,516 units of the private placement
for gross proceeds of $3,023,913 with investors based in
Peru. Finders fees of 6% of gross proceeds are payable to
Kallpa Securities in connection with the private placement in
Peru.
In addition, the private placement includes
1,564,000 units for proceeds of $281,520 placed with investors in
Canada, including 1,003,000 units for proceeds of $180,540
subscribed to by insiders of the Company.
As previously announced by Panoro on August 8,
2016, Silver Wheaton will, subject to the satisfaction of certain
conditions, advance another $2.6 million (US$ 2.0 million) under
the terms of the Precious Metals Purchase Agreement (the
“Cotabambas Early Deposit Agreement”). The Cotabambas Early Deposit
Agreement between Panoro Trading (Caymans) Ltd., a wholly-owned
subsidiary of Panoro Minerals Ltd., and Silver Wheaton (Caymans)
Ltd., a wholly owned subsidiary of Silver Wheaton Corp. ("Silver
Wheaton") (TSX:SLW) (NYSE:SLW) in respect of the Cotabambas project
located in Peru which was announced on March 21, 2016, includes
provisions, subject to certain conditions, to accelerate payments
through Silver Wheaton's matching, of up to $2.6 million (US$ 2.0
million) in the first year of the agreement, of any third party
equity financing by Panoro targeted for exploration or development
of the Cotabambas Project. Provisions in the agreement also
include acceleration, subject to certain conditions, of up to
another US$ 1.5 million in the second year of the agreement should
Panoro be successful in arranging third party equity financing
during that second year. This is in addition to the minimum
US$ 1.5 million to be advanced in each of 2017 and 2018.
Luquman Shaheen, President & CEO of Panoro,
states, “The completion of this financing marks another key
milestone for Panoro. For the short and medium term the
financing provides the capital required to continue growing and
enhancing the Cotabambas Project, but equally important, it adds
another important strategic shareholder for Panoro with the
participation of Resource Capital Funds. Resource Capital Funds’
together with Hudbay’s, Silver Wheaton’s and our strong Peruvian
shareholder base’s investment into Panoro and the Cotabambas
Project during an almost unprecedented low period for the base
metal exploration industry, has been possible because of our common
belief that the Cotabambas Project will be one of the next copper
projects to be developed. This financing together with the
Cotabambas Early Deposit Agreement with Silver Wheaton will provide
Panoro with up to $19 million of capital over the next 24
months. Panoro thanks our existing and new shareholders and
strategic partners for their continued support.”
The proceeds from the financing will be used
primarily to enhance and expand the Company's Cotabambas Cu/Au/Ag
Project, but also for the Company’s Antilla Cu/Mo Project, both
located in Peru, and for general working capital.
The Company is planning a work program at the
Cotabambas Project to include the following;
- Step out drilling to delineate additional oxide mineralization
at the Ccalla Deposit together with a metallurgical test program on
the oxides in order to assess the potential to add a heap leach and
SX/EW component to the project plan;
- Metallurgical test program on the hypogene and supergene
sulphides, mixed and high-gold oxide mineralization zones to assess
the potential for increasing estimated recoveries;
- Geophysical surveys and drilling at the Maria Jose target
located to the north side of the Ccalla Deposit to test and
delineate high-grade copper mineralization discovered during the
Company’s previous mapping, trenching and geochemical sampling
work; and
- Advance permitting and exploration work leading to a drill
program at the newly discovered Chaupec target at the Cotabambas
Project.
About Panoro
Panoro Minerals is a uniquely positioned Peru
and copper-focused exploration company. The company is advancing a
significant project portfolio in the key Andahuaylas-Yauri belt in
south central Peru, including its advanced stage Cotabambas
Copper-Gold-Silver-Molybdenum and Antilla Copper-Molybdenum
Projects.
Since 2007, the company has completed over
70,000 m of exploration drilling at these two key projects leading
to substantial increases in the mineral resource base for each, as
summarized in the table below.
Summary of Cotabambas and Antilla
Project Resources
Project |
ResourceClassification |
Milliontonnes |
Cu (%) |
Au (g/t) |
Ag (g/t) |
Mo (%) |
Cotabambas Cu/Au/Ag |
Indicated |
117.1 |
0.42 |
0.23 |
2.74 |
0.001 |
Inferred |
605.3 |
0.31 |
0.17 |
2.33 |
0.002 |
@ 0.20% CuEq cutoff, effective October 2013,
Tetratech |
Antilla Cu/Mo |
Indicated |
291.8 |
0.34 |
- |
- |
0.01 |
Inferred |
90.5 |
0.26 |
- |
- |
0.007 |
@ 0.175% CuEq cutoff, effective May 2016,
Tetratech |
Preliminary Economic Assessments (PEA) have been
completed for both the Cotabambas and Antilla Projects, the key
results are summarized below.
Summary of Cotabambas and Antilla
Project PEA Results
Key Project Parameters |
|
Cotabambas Cu/Au/Ag Project |
Antilla Cu/Mo Project |
Mill Feed, life of mine |
million tonnes |
483.1 |
350.4 |
Mill Feed, daily |
tonnes |
80,000 |
40,000 |
Strip Ratio, life of mine |
|
1.25 : 1 |
0.85 : 1 |
BeforeTax1 |
NPV7.5% |
million USD |
1,053 |
491 |
IRR |
% |
20.4 |
22.2 |
Payback |
years |
3.2 |
3.3 |
After Tax1 |
NPV7.5% |
million USD |
684 |
225 |
IRR |
% |
16.7 |
15.1 |
Payback |
years |
3.6 |
4.1 |
Annual Average PayableMetals |
Cu |
thousand tonnes |
70.5 |
36.8 |
Au |
thousand ounces |
95.1 |
- |
Ag |
thousand ounces |
1,018.4 |
- |
Mo |
thousand tonnes |
- |
0.9 |
Initial Capital Cost |
million USD |
1,530 |
603 |
Project economics estimated at commodity prices of; Cu
= $US3.00/lb, Au = $US1,250/oz, Ag = $US18.50/oz, Mo =
$US12/lb |
The PEAs are considered preliminary in nature
and include Inferred Mineral Resources that are considered too
speculative to have the economic considerations applied that would
enable classification as Mineral Reserves. There is no certainty
that the conclusions within the updated PEA will be realized.
Mineral Resources are not Mineral Reserves and do not have
demonstrated economic viability.
Luis Vela, a Qualified Person under National
Instrument 43-101, has reviewed and approved the scientific and
technical information in this press release.
On behalf of the Board of Panoro
Minerals Ltd.
Luquman A. Shaheen, M.B.A., P.Eng., P.E.President & CEO
CAUTION REGARDING FORWARD LOOKING STATEMENTS:
Information and statements contained in this news
release that are not historical facts are “forward-looking
information” within the meaning of applicable Canadian securities
legislation and involve risks and uncertainties. Examples of
forward-looking information and statements contained in this news
release include information and statements with respect to:
- acceleration of payments by Silver Wheaton to match third party
financing by Panoro targeted for exploration at the Cotabambas
Project
- payment by Silver Wheaton of US$140 million in
installments
- Panoro weathering the current depressed equity and commodity
markets, minimizing dilution to existing shareholders and making
targeted investments into exploration at the Cotabambas
Project
- mineral resource estimates and assumptions
- the PEA, including, but not limited to, base case parameters
and assumptions, forecasts of net present value, internal rate of
return and payback;
- copper concentrate grade from the Cotabambas Project;
Various assumptions or factors are typically
applied in drawing conclusions or making the forecasts or
projections set out in forward-looking information. In some
instances, material assumptions and factors are presented or
discussed in this news release in connection with the statements or
disclosure containing the forward-looking information and
statements. You are cautioned that the following list of
material factors and assumptions is not exhaustive. The factors and
assumptions include, but are not limited to, assumptions
concerning: metal prices and by-product credits; cut-off grades;
short and long term power prices; processing recovery rates; mine
plans and production scheduling; process and infrastructure design
and implementation; accuracy of the estimation of operating and
capital costs; applicable tax and royalty rates; open-pit design;
accuracy of mineral reserve and resource estimates and reserve and
resource modeling; reliability of sampling and assay data;
representativeness of mineralization; accuracy of metallurgical
test work; and amenability of upgrading and blending
mineralization.
Forward-looking statements are subject to a
variety of known and unknown risks, uncertainties and other factors
which could cause actual events or results to differ materially
from those expressed or implied by the forward-looking statements,
including, without limitation:
- risks relating to metal price fluctuations;
- risks relating to estimates of mineral resources, production,
capital and operating costs, decommissioning or reclamation
expenses, proving to be inaccurate;
- the inherent operational risks associated with mining and
mineral exploration, development, mine construction and operating
activities, many of which are beyond Panoro’s control;
- risks relating to Panoro’s ability to enforce Panoro’s legal
rights under permits or licenses or risk that Panoro’s will become
subject to litigation or arbitration that has an adverse
outcome;
- risks relating to Panoro’s projects being in Peru, including
political, economic and regulatory instability;
- risks relating to the uncertainty of applications to obtain,
extend or renew licenses and permits;
- risks relating to potential challenges to Panoro’s right to
explore and/or develop its projects;
- risks relating to mineral resource estimates being based on
interpretations and assumptions which may result in less mineral
production under actual circumstances;
- risks relating to Panoro’s operations being subject to
environmental and remediation requirements, which may increase the
cost of doing business and restrict Panoro’s operations;
- risks relating to being adversely affected by environmental,
safety and regulatory risks, including increased regulatory burdens
or delays and changes of law;
- risks relating to inadequate insurance or inability to obtain
insurance;
- risks relating to the fact that Panoro’s properties are not yet
in commercial production;
- risks relating to fluctuations in foreign currency exchange
rates, interest rates and tax rates; and
- risks relating to Panoro’s ability to raise funding to continue
its exploration, development and mining activities.
This list is not exhaustive of the factors that
may affect the forward-looking information and statements contained
in this news release. Should one or more of these risks and
uncertainties materialize, or should underlying assumptions prove
incorrect, actual results may vary materially from those described
in the forward‑looking information. The forward‑looking
information contained in this news release is based on beliefs,
expectations and opinions as of the date of this news
release. For the reasons set forth above, readers are
cautioned not to place undue reliance on forward-looking
information. Panoro does not undertake to update any
forward-looking information and statements included herein, except
in accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this release.
FOR FURTHER INFORMATION, CONTACT:
Panoro Minerals Ltd.
Luquman A. Shaheen, President & CEO
Phone: 604.684.4246 Fax: 604.684.4200
Email: info@panoro.com
Web: www.panoro.com
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