Orvana Closes Sale of Copperwood Project to Highland

Orvana Minerals Corp. (the "Company" or "Orvana") announces that it expects to close the sale of its Copperwood Project ("Copperwood") to Highland Copper Company Inc. ("Highland") through the sale of all of the outstanding shares of Orvana Resources US Corp. ("Orvana US") on or before June 13, 2014.

As previously disclosed, in consideration for its acquisition of the shares of Orvana US, Highland has agreed to pay Orvana up to US$25 million in aggregate, consisting of a base consideration of US$20 million and additional consideration of up to US$5.0 million.

Concurrent with the announcement by Highland of a letter of intent with AMCI Holdings Inc. ("AMCI") with respect to, among other things, the establishment of a joint venture between Highland and AMCI to include Copperwood, after its acquisition by Highland, Orvana and Highland have now agreed that the US$20 million base consideration, previously agreed to be paid in cash upon closing, will be paid in two tranches as follows:

1. Orvana will receive a cash payment on closing equal to the sum of (a) US$13,000,000, plus (b) an amount equal to all proceeds raised by Highland in excess of US$21,000,000 as part of its previously announced private placement (together the "Closing Payment"); and
2. US$7,000,000 less any payment made in excess of US$21,000,000 as set out above represented by a secured promissory note ("Note") on the terms set forth below:
   1. The Note will bear interest at an annualized rate of 13.5% on the outstanding amount from issuance of the Note until September 30, 2014 and thereafter at an annualized rate of 17.5%.
   2. The principal amount outstanding under the Note, and the interest accrued thereon, may be prepaid at any time and is repayable no later than December 15, 2014 (the "Maturity Date"), subject to the mandatory prepayments described in subparagraph (iii) and (iv) below.
   3. The Note will include mandatory prepayments of:
      1. US$2,000,000 from any payment made in September, 2014 by AMCI under its joint venture with Highland, and also any part of any such payment that exceeds US$5,000,000;
      2. an amount equal to 75% of the proceeds from any debt raise, equity raise (including the exercise of any warrants) or capital event other than in respect of the payment made in September, 2014 by AMCI under its joint venture with Highland; and
      3. a bullet repayment of the outstanding balance of the Note, and the interest accrued thereon, on the earlier of (i) the payment made in December, 2014 by AMCI under its joint venture with Highland, and (ii) the Maturity Date including other contributions by AMCI made under the joint venture.
   4. The full amount of the outstanding balance of the Note, and the interest accrued thereon, will be immediately due and payable upon any change of control of Highland.
   5. The Note will be secured by a first priority security interest over all of the assets of Orvana US, a pledge by Highland of all of the shares of Orvana US and a guarantee from Highland.

Among other things, closing of the acquisition ("Closing") is conditional upon the completion of a financing by Highland of a minimum of C$18.0 million, including a subscription from AMCI, to fund the Closing Payment and receipt of all required regulatory approvals including the approval of the TSX Venture Exchange.

As previously disclosed, an additional consideration of up to US$5 million will be paid by Highland in cash or shares of Highland, at Orvana's option, upon occurrence of the events described below:

•   US$1.25 million upon the earliest of (i) commencement of commercial production of Copperwood and (ii) the date that is 36 months after Closing; and an additional US$1.25 million on the first anniversary of this payment.
•   US$1.25 million if the average copper price for any 60 calendar day period following the first anniversary and preceding the second anniversary of commencement of commercial production is greater than US$4.25/lb; and an additional US$1.25 million if the average copper price for any 60 calendar day period following the second anniversary and preceding the third anniversary of the commencement of commercial production is greater than US$4.50/lb.

Orvana will use the proceeds received from the sale of Copperwood to repay a loan from Fabulosa Mines Limited and for working capital purposes.

About Orvana

Orvana Minerals is a multi-mine gold and copper producer. Orvana's primary asset is the El Valle-Boinás/Carlés gold-copper mines in northern Spain. Orvana also owns and operates the Don Mario Mine in Bolivia, processing its copper-gold-silver Upper Mineralized Zone deposit. In February 2014, the Company announced the divestiture of its Copperwood copper project in Michigan, United States. Additional information is available at Orvana's website (www.orvana.com).

Source: http://www.orvana.com/