Coro Strengthens Focus on Marimaca Project as SCM Berta Operation Placed on Care and Maintenance
October 16 2018 - 7:00AM
Coro Mining Corp. (“Coro” or the “Company”) (TSX:
COP) is pleased to update shareholders that its strategy
to focus on its large Marimaca exploration project has taken
another step forward following a decision by its owners to place
the smaller SCM Berta operation on care and maintenance.
The April 2018 strategic review recognised that
the Marimaca project presents the greatest opportunity to create
value, and therefore the Company committed to reducing its interest
in SCM Berta. In line with this strategy, the Company and
Greenstone Resources have decided to place SCM Berta on care and
maintenance. This decision will preserve ore resources and
minimise costs while a new long-term strategic alternative for the
operation can be determined. Options under consideration
include selling the operation as a whole or part to a third-party,
consolidation with other local copper producers and developers, or
restarting a reconfigured operation at higher copper prices.
Commenting on the news, Luis Tondo, President
and CEO of Coro said: “Our confidence in Marimaca continues to grow
and we believe that it has the potential to become one of the most
significant recently discovered open pittable copper oxide
resources in Chile. As this view strengthens, Marimaca
clearly must be the focus of the business as we aim to generate
wealth for our shareholders. As a smaller, high-cost and
somewhat complex operation, we determined that SCM Berta was not
economical at current copper prices. Consequently, we have
decided to ramp-down operations and place it on care and
maintenance. This pause will allow us the time needed to find
a longer term solution for the SCM Berta and focus our time and
efforts on Marimaca.”
SCM Berta Care and Maintenance Program and
FinancingThe costs associated with placing SCM Berta on care and
maintenance, in addition to funds for re-engineering and new
resource drilling are estimated at approximately US$10 million.
To fund SCM Berta until a longer term economic solution is
determined, Greenstone Resources II, L.P. (“Greenstone”) has agreed
to provide an eleven-month US$10 million secured loan facility to
SCM Berta (the “Loan Facility”). US$6 million has been advanced to
take it SCM Berta through to care and maintenance and the intention
is that the balancing US$4million will be made available for
further drilling and engineering. The Loan Facility is secured by
properties associated with SCM Berta. The Marimaca Project is not
encumbered by the Loan Facility. Interest on the loan will accrue
monthly at 12% for the first 3 months, and 15% thereafter. In
connection with the Loan Facility, certain mining claims
related to the SCM Berta project that are still registered in the
name of Coro subsidiary Minera Cielo Azul Limitada (“MCAL”) will be
transferred into the name of SCM Berta.
As previously disclosed, in April 2018
Greenstone advanced a convertible $12 million loan (the
“Convertible Loan”) to finance SCM Berta.
Following shareholder approval of the conversion feature of the
Convertible Loan in June 2018, the Convertible Loan was convertible
into up to a 75% equity interest in MCC Rising Star Limited, owner
of SCM Berta. The conversion of the Convertible Loan by
Greenstone into an equity interest was scheduled to occur at the
end of September 2018 but the parties have agreed to extend this
period until December 2018 pending the transfer of the MCAL
properties into SCM Berta, as referenced above. Provided the
MCAL properties are transferred, no additional interest will be
charged on the Convertible Loan during this extension period.
Provided certain conditions are met, the Company understands
Greenstone intends to convert the Convertible Loan into a 75%
equity interest in December 2018, thereby reducing Coro’s equity
interest (and ownership of SCM Berta) to 25%.
Contact InformationFor further information
please visit www.coromining.com or contact:Nicholas Bias, VP
Corporate Development & Investor Relations+56 2 2431 7601 |
nbias@coromining.com
Forward Looking StatementsThis
news release includes certain “forward-looking statements” under
applicable Canadian securities legislation. These statements
relate to future events or the Company’s future performance,
business prospects or opportunities. Forward-looking statements
include, but are not limited to, statements regarding the future
development and exploration potential of the Marimaca Project; the
potential long term alternatives for SCM Berta and the conversion
of the Convertible Loan by Greenstone. Actual future results may
differ materially. There can be no assurance that such statements
will prove to be accurate, and actual results and future events
could differ materially from those anticipated in such statements.
Forward-looking statements reflect the beliefs, opinions and
projections on the date the statements are made and are based upon
a number of assumptions and estimates that, while considered
reasonable by Coro, are inherently subject to significant business,
economic, competitive, political and social uncertainties and
contingencies. Many factors, both known and unknown, could cause
actual results, performance or achievements to be materially
different from the results, performance or achievements that are or
may be expressed or implied by such forward-looking statements and
the parties have made assumptions and estimates based on or related
to many of these factors. Such factors include, without limitation:
the inherent risks involved in the mining, exploration and
development of mineral properties, the uncertainties involved in
interpreting drilling results and other geological data,
fluctuating metal prices, the possibility of project delays or cost
overruns or unanticipated excessive operating costs and expenses,
uncertainties related to the necessity of financing, the
availability of and costs of financing needed in the future as well
as those factors disclosed in the Company’s documents filed from
time to time with the securities regulators in the Provinces of
British Columbia, Alberta, Saskatchewan, Manitoba, Ontario, New
Brunswick, Nova Scotia, Prince Edward Island and Newfoundland and
Labrador. Accordingly, readers should not place undue reliance on
forward-looking statements. Coro undertakes no obligation to update
publicly or otherwise revise any forward-looking statements
contained herein whether as a result of new information or future
events or otherwise, except as may be required by law.
Marimaca Copper (TSX:MARI)
Historical Stock Chart
From Jun 2024 to Jul 2024
Marimaca Copper (TSX:MARI)
Historical Stock Chart
From Jul 2023 to Jul 2024