Coro Mining Corp. is pleased to announce that it has signed a non-binding Letter of Intent to acquire Minera Rayrock Ltda, a Chilean subsidiary of Compañía Minera Milpo S.A.A a Peruvian mining company.
Rayrock is the owner of the Ivan SXEW plant located some 18km south of the Company's Marimaca project, as well as 23,748 hectares of mining claims ("Ivan Claims") extending between Marimaca and Ivan (Figure 1). The Ivan plant has an installed capacity of 12ktpy 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 US$250k 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 US$6.25m on execution of the DPA
- Milpo to retain a 2% net smelter return ("NSR") on all production from the Rayrock mineral properties. Coro may acquire half the NSR for US$2m at any time and will have a right of first refusal over the NSR.
Alan Stephens, President and CEO 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;
||Resources at end 2015|
|At 0.7%CuT cutoff
|Measured + Indicated
Rayrock also owns 14,505 hectares of mining claims ("Sierra Medina claims") located some 42km north east from Ivan and 30km east from Marimaca (Figure 1). The Sierra Medina claims are quoted in the Milpo 2015 annual report to host 12 .2mt at 1.18%CuT & 0.86%CuS at a 0.7%CuT cutoff 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 NI43-101 and therefore should not be relied on.