Aug 2 2013
Cordoba Minerals Corp. (the "Company") is pleased to announce that it has entered into a binding agreement (the "Agreement") to acquire a 100% interest in the Cordoba Copper-Gold Project from the Minatura Group of companies ("Minatura") and the adjacent San Matias Property from Sabre Metals Inc. ("Sabre"), located in the Municipality of Puerto Libertador, Department of Cordoba, 200km north of Medellin, Colombia.
This agreement consolidates a major land package covering multiple porphyry copper-gold targets along an inferred northern extension of the prolific Middle Cauca Gold Belt of central Colombia, in which several major gold discoveries have been made in recent years. Several intrusive centers have been identified on the two properties and neither property has been drilled, despite a long history of both alluvial and hard rock mining.
Simon Ridgway, CEO of the Company, commented: "I'd like to thank the Management of Minatura and Sabre for their efforts in facilitating this logical step forward in the development of what I believe is a new porphyry district. This deal brings together strong management teams and two exceptional land packages in a truly world class mineral belt. We can now look forward to drilling the known copper-gold targets, beginning hopefully in August."
The Cordoba and San Matias Properties consist of various mining concessions and concession applications covering approximately 24,790 ha and 1,465 ha, respectively, underlain by volcano-sedimentary rocks that are intruded by multiple dioritic intrusives with the excellent potential to host porphyry copper-gold deposits.
Exploration conducted by the Company and Sabre to date has included airborne magnetic and radiometric surveys, a ground based magnetic survey, regional prospecting, stream sediment and soil sampling, local geological mapping, trenching and rock sampling. This work has identified several promising drill targets, including the Montiel and Costa Azul areas on the Cordoba property, and the artisanal open pit mine on the San Matias property.
Copper-gold mineralization occurs in both intrusive and volcanic rocks at these locations, associated with sheeted quartz-magnetite veining and alteration styles indicative of a highly prospective porphyry copper-gold environment. The Montiel prospect is located just 700m west of the San Matias open pit operation, and magnetic surveys suggest that the two intrusive bodies may be connected at depth. These targets are just three of at least half a dozen recently defined soil geochemistry and/or magnetic survey anomalies on the combined properties, which have yet to be fully explored.
Significant trench results obtained by the Company to date include 30m of 0.7 g/t gold and 0.8% copper at Montiel, and 30m of 0.47 g/t gold and 0.47% copper at Costa Azul, from saprolitic rocks near surface. Sabre's channel sampling at San Matias returned 154m of 2.6 g/t gold and 1.6% copper from a continuous but circular path (in and around the artisanal workings) in deeper bedrock exposures that are currently being mined from an open-pit. The San Matias mine workings currently cover an area of 90m x 50m and the high-grade porphyry mineralization remains open in all directions.
A preliminary diamond drilling program has been designed by Sabre to test the San Matias target and is expected to start later this month. Additional drilling of the Montiel and Costa Azul targets will follow accompanied by an aggressive surface sampling campaign to locate further targets within the extensive consolidated land package.
The Proposed Transaction
The Company currently owns an 11% interest in Cordoba Holdings Corp. ("CHC"), a private company which holds indirect title to the Cordoba Project. Pursuant to the Agreement, the Company will acquire (the "Transaction") from Minatura International LLC, Minatura Gold and certain minority shareholders of CHC (collectively "Minatura") the remaining 89% in CHC, and will also acquire all of the outstanding shares of Sabre Metals Inc. ("Sabre"), a private company which has the right to acquire a 100% interest in the San Matias Property.
In consideration therefor, the Company has agreed to:
- issue common shares in its capital stock to Minatura and Sabre's shareholders, so that the Company's resulting issued capital will be 81,942,881 shares, of which Minatura will own 29,499,437 shares or 36% of the Company and the Sabre shareholders will own 26,221,722 shares or 32% of the Company;
- issue 2,117,647 warrants to Minatura and 1,882,353 warrants to the Sabre shareholders, each warrant exercisable at $0.30 for two years from closing of the Transaction; and
- make cash payments to Minatura totaling US$5.0 million ($1.0 million paid on signing of the Agreement, and $4.0 million due on closing of the Transaction).
In addition, the Company intends to raise at least $3.0 million by way of an equity financing (the "Financing") the proceeds of which will be held in escrow, to be released concurrently with the Transaction closing.
Upon completion of the Transaction, the Company will have seven directors, two of whom to be nominated by Minatura, two by Sabre, two by the Company, and the seventh by mutual agreement of the parties. Mario Stifano will be appointed President and CEO of the Company. As well, the option agreement signed in March 2012 whereby the Company had been granted the option from Minatura to increase its ownership of the Cordoba Project from 11% to 100% will no longer be in effect.
Each of Minatura and Sabre is at arm's length to the Company, and none of the directors or officers of the Company are directors, officers or shareholders of Minatura or Sabre, other than Tod Turley who is Chief Operating Officer of Minatura and a director of the Company.
Completion of the Transaction is subject to a number of conditions, including approval by the shareholders of the Company and Sabre, completion of the Financing, preparation of a 43-101 compliant technical report on the San Matias Property, and approval by the TSX Venture Exchange.