Coro Mining Strengthens Focus on Marimaca Project as SCM Berta Operation Placed on Care and Maintenance
VANCOUVER, British Columbia, Oct. 16, 2018 (GLOBE NEWSWIRE) -- 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 Financing
The 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%.
For further information please visit www.coromining.com or contact:
Nicholas Bias, VP Corporate Development & Investor Relations
Forward Looking Statements
This 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.