Coro Mining Corp. (“Coro” or the “Company”) (TSX:
COP) is pleased to announce a transaction (the
“
Transaction”) whereby Coro will acquire from
local family owners (the “
Sellers”) the remaining
49% interest in the Marimaca 1-23 claim it does not currently own
(the “
Claim Interests”). The Marimaca 1-23 claim
is the central area of the concession package that together
comprises the Marimaca Project. Upon the completion of the
Transaction, the Company will have 100% control over the claims
comprising the entire Marimaca Project.
Pursuant to the Transaction, the Company will
acquire the Claim Interests for total cash consideration of (i)
US$12 million (US$6 million paid on signing of the definitive
purchase agreement and two payments of US$3 million due in 12 and
24 months, respectively), together with (ii) the transfer to the
Sellers of certain non-core mineral claims owned by the Company. In
addition, the Sellers will receive a 1.5% net smelter return
royalty (“NSR”) over the Marimaca 1-23 claim, with
Coro retaining an option to buy back 1% of the NSR (leaving a 0.5%
NSR remaining) for a total of US$4 million at any time up to 24
months from the commencement of commercial production from the
Marimaca 1-23 claims. Coro will retain a right of first refusal to
acquire this royalty at all times.
In connection with the Transaction, the Company
is also pleased to announce a non-brokered private placement (the
“Placement”) of an aggregate of 145,863,926 common
shares of the Company (the “Offered Shares”) at a
price of C$0.115 per share (11.5 cents per share) representing a
28% premium to the C$0.09 closing share price on the TSX on
September 9, 2019, for total proceeds of C$16,774,351
(approximately US$12.6 million). The subscribers under the
Placement will be the Company’s two largest shareholders,
Greenstone Resources LP and associated entities
(“Greenstone Capital”) and Ndovu Capital XIV B.V.
(“Tembo Capital”). The proceeds of the Placement
will be used to make the first US$6 million payment for the Claim
Interests, with the balance to be used to advance a mineral
resource estimate, a preliminary economic assessment (PEA), other
land option payments and general working capital purposes. The
confidence of the Company’s major shareholders to invest at a
premium is, the Company believes, a testament to the value each
sees in the Company and its assets. The issue of 32,481,721 Offered
Shares to Tembo is expected to close on or about September 11,
2019. The issue of 113,382,205 Offered Shares to Greenstone is
expected to close on or about September 17, 2019.
Highlights
- New transaction consolidates 100% ownership of the Marimaca
Project
- Financing at C$0.115 per share (11.5 cents per share) for
proceeds of C$16.8 million
- Company working capital bolstered, with the funding secured
expected to be sufficient to advance a PEA towards completion in
early 2020, in addition to covering other capital requirements
Commenting on the news, Luis Tondo, President
and CEO of Coro said: “Over the last months, while the drill rigs
have been turning at Marimaca and unearthing results in excess of
what we anticipated, we have also been working hard to increase our
ownership of the core Marimaca 1-23 claim from 51% to a full 100%.
I am delighted to confirm that this will now be achieved and viewed
together with the adjacent land acquisitions and option agreements
we have completed over the last 18 months, we have realised our
objective to control 100% of the Marimaca Project.
Marimaca 1-23 is only part of the bigger
Marimaca story. With drilling from the adjacent La Atómica,
Atahualpa and Tarso claims completed, we are now working to
complete an updated global resource estimate unconstrained by
property boundaries, which we believe will be significantly larger
than the original resource, at a similar grade, and with the
benefit of near surface high-grade zones identified during the
recent drilling campaign. We expect to release this new resource
estimate in the fourth quarter of this year.
We have raised money at a premium to our
prevailing share price in the face of challenging market
conditions. This is one of the best endorsements we could hope for
and I am grateful to our shareholders for the support we have
received, and I look forward to returning that confidence as we
work towards the publication of our new resource and PEA. We
approach the coming months from a position of strength as a copper
exploration and development play that is well-funded and, in a
position, to deliver value to all shareholders.”
Figure 1: 100% owned Marimaca 1-23 claim and the
100% controlled Marimaca project
A Figure accompanying this announcement is available at
https://www.globenewswire.com/NewsRoom/AttachmentNg/2b2b9e88-2aa8-4d30-b9dd-1d4ee3e9af3c
The diagram in Figure 1 is a representative
illustration of the Marimaca Project and is not to scale.
Further Information
The Transaction to acquire the remaining 49%
interest in the Marimaca 1-23 claim has been agreed with the Seller
through a Chilean public deed which constitutes the framework for a
subsequent definitive purchase agreement that will be executed
after a corporate reorganization of the Sellers (the “Definitive
Agreement”). This is in compliance with Chilean Mining Code and the
rules applicable to mining companies.
The price to acquire the Claim Interests has been
agreed for the total amount of US$12,000,000, to be paid:
- US$6,000,000 on the date of signing of the Definitive
Agreement
- US$3,000,000 within 12 months as from the date of Definitive
Agreement
- US$3,000,000 within 24 months as from the date of the
Definitive Agreement
Title to the Claim Interests will transfer to
the Company upon closing following signing of the Definitive
Agreement and payment of the initial US$6,000,000 amount. The
Definitive Agreement will provide means for title to the Claim
Interests to revert to the Seller in the event that the Company
defaults on payment of either of the subsequent US$3,000,000
payments.
In addition, the Seller will have a 1.5% Net
Smelter Return Royalty (NSR) over the Marimaca 1-23 claims. The
Company will retain a right to repurchase 1% of the NSR (leaving a
0.5% NSR remaining) for US$4,000,000, payable in cash within 24
months from commencement of commercial production from the Marimaca
1-23. The NSR covers only the Marimaca 1-23 claim and no other
Marimaca Project claims.
Consideration for the Transaction also includes
certain mining claims owned by Compañía Minera Rayrock Limitada, a
subsidiary of the Company, which will be transferred to the
Sellers, namely:
- Pampa 81, 16-20
- Pampa 81, 36-40
- Pampa 47, 1-5
- Pampa 47, 21-25
- Tiso 1, 1-20
The Pampas claims are part of the Sierra Medina
land package and are located approximately 32 kilometers to north
east of Marimaca project; and the Tiso claims are part of the
RayRock land package and located approximately 26 kilometers to the
south of the Marimaca project.
Coro Mining and the Marimaca
Project
Marimaca is fast becoming recognised as one of
the most significant copper discoveries in Chile in recent years as
it represents a new style of mineralization which challenges
accepted exploration wisdom and promises to open up new frontiers
for discoveries elsewhere in the country. Unusually, Marimaca is a
fracture controlled and intrusive hosted deposit while the numerous
and well known manto deposits in the same Coastal Copper Belt are
hosted by favourable volcanic rocks.
With a lack of new copper exploration
discoveries in Chile the growing Marimaca resource is likely to
make it a sought-after development project as it is located near
the coast at low elevation close to the city of Antofagasta and the
port of Mejillones. This prime location should enable its future
development at a relatively modest capital investment. Marimaca
would benefit from nearby existing infrastructure including roads,
powerlines, ports, a sulphuric acid plant, a skilled workforce and
seawater.
Qualified PersonsThe technical
information in this news release, including the information that
relates to geology, drilling and mineralization of the Marimaca
Phase I and II exploration program was prepared under the
supervision of, or has been reviewed by Sergio Rivera, Vice
President of Exploration, Coro Mining Corp, a geologist with more
than 36 years of experience and a member of the Colegio de Geologos
de Chile and of the Institute of Mining Engineers of Chile, and who
is the Qualified Person for the purposes of NI 43-101 responsible
for the design and execution of the drilling program.
Contact InformationFor further
information please visit www.coromining.com or contact:Nick Bias,
VP Corporate Development & Investor RelationsCell: +44 (0)7771
450 679Email: 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.
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.
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