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Coro Enters Into Financing Arrangement to Fund Acquisition of Cerro Negro Copper Mine, Chile

Posted on: Friday, 22 August 2008, 15:00 CDT

Coro Mining Corp. ("Coro" or the "Company") (TSX: COP) is pleased to announce financing terms, which when completed, will be used to fund the acquisition by Coro of the Cerro Negro Copper Mine in Chile. Dundee Global Resources Limited Partnership ("the Partnership") has agreed to undertake two private placements totaling an aggregate of $15 million and provide Coro with US$25 million in debt (collectively, the "Financing").

Dundee Global Resources Limited Partnership is a newly launched resource merchant banking limited partnership (refer to Dundee Corporation's News Release dated August 22, 2008) set up to carry out all the resource merchant banking activities of Dundee Corporation (TSX: DCA). If the Partnership completes the financings without syndicating to other parties, upon completion, it will own approximately 11,873,000 common shares of Coro, and 5,000,000 Warrants, representing 25.04% of the issued and outstanding common shares of Coro (or 32.19% assuming the exercise of all of the Warrants). In addition, upon completion of the Financing as contemplated, the Partnership will be entitled to appoint up to two directors to the board of directors of Coro, and will have a pre-emptive right to maintain its proportionate equity interest in Coro.

Alan Stephens, President and CEO of Coro, commented, "We are delighted to have entered into this financing arrangement with the Dundee Global Resources Limited Partnership and look forward to closing the transaction as soon as possible. The acquisition of Cerro Negro will propel Coro into the ranks of copper producers at a time of high copper prices, and means that we will have achieved the first part of the business strategy we set out when Coro was founded in 2005. Cash flow will be employed to further enhance the Cerro Negro operations and to advance the Company's development project pipeline. We very much welcome the Partnership as a major shareholder in Coro, which we view as a vote of confidence in our business model and management team, as we continue to grow Coro into a successful mid-tier copper mining company."

Ned Goodman, Executive Chairman of Dundee Global Resources Limited Partnership and CEO of Dundee Corporation, commented, "The Coro transaction represents a strategic investment in a company with a proven management team working in two countries where we have political confidence - Chile and Argentina - and a commodity - copper - which we believe has strong fundamentals going forward."

The TSX requires shareholder approval of the Financing because the number of shares being made issuable under the transaction is more than 25% of the current issued and outstanding number of shares of the Company and under TSX policies such a holding may be considered to materially affect control of the Company. Upon completion of the transaction the Partnership will own 25.04% of the Company, under TSX policies this level of ownership is deemed to be a control position. The Company intends to seek shareholder approval of this transaction by obtaining written consent as provided by Section 604 (d) of the TSX Manual.

The Partnership and any affiliates which may own shares of the Company will not be entitled to vote on the transaction (which represents approximately 1,000,000 common shares of the Company or approximately 2.7% as at the date of this news release). It is management's and the board's firm belief that the Financing proposed by the Partnership provides the Company with the opportunity to complete the acquisition of Cerro Negro on a timely basis and is in the best interests of the Company, and strongly recommend that shareholders vote for its approval. Once this Financing has completed, it is management's intention to replace the Partnership's debt with a longer term debt facility and/or equity at a time of more favorable prices.

Principal Terms of Financing:

Initial Private Placement

The Partnership has agreed to complete an initial private placement of two million units at $1.50 per unit for gross proceeds of $3 million. Each unit is comprised of one common share and one-half of a transferable warrant. Each whole warrant will be exercisable to acquire one common share of Coro at a price of $2.00 for a period of three years from the closing. In the event that the common shares of Coro trade at an average price of $2.75 per share for 20 consecutive trading days during the term of the warrants, then provided that the Company has given written notice to the holders of the warrants, the warrants will expire 60 days after such written notice. Coro will use the proceeds of the initial private placement for working capital purposes.

Second Private Placement

The Partnership has also agreed to a second private placement of eight million units for gross proceeds of C$12 million. The terms and conditions of the eight million units are the same as those for the initial private placement. Coro will use the proceeds from the second private placement together with the proceeds from the secured Loan Facility to make the final payment to acquire Cerro Negro.

Secured Loan Facility

The Partnership has also agreed to provide a US$25 million secured Loan Facility (the "Facility"). The Facility is non-revolving with an initial term of twelve months from the closing date, which is targeted for September. Coro may request a 12 month extension to the Facility by giving the Partnership written notice 60 days prior to the maturity date. The Facility carries a 12% per annum interest rate, and may be prepaid in whole or in part before maturity without penalty or bonus. The Facility will be secured by charges over certain of the assets of the Company, including the assets of the Cerro Negro Copper Mine. In consideration for the Facility, Coro has agreed to pay to the Partnership a structuring fee in the amount of $150,000 payable in cash on the closing date, and a bonus equal to 5% of the principal amount of the Facility payable by the issuance of common shares of Coro at a deemed price of $1.50 per share. If Coro arranges alternative financing prior to the completion of the financing with the Partnership, Coro has agreed to pay to the Partnership a cash break fee in the aggregate amount of the bonus and structuring fee, together with the expenses incurred by the Partnership in connection with the Financing.

Closing

Completion of the second private placement and the Facility are subject to certain conditions, including receipt of all necessary shareholder and regulatory approvals, execution of transaction and security documents, and closing of the Cerro Negro acquisition. The Partnership may syndicate a portion of the Financing to other parties.

Price Reset Clause

The terms of the private placements provide that if Coro completes any future public or private offering of common shares or securities convertible to common shares during the longer of 12 months following the closing of the private placements, and the term during which the Facility is outstanding, at an issue price less than $1.50 per share (a "Discounted Offering"), Coro must pay to the initial purchasers of units (whether or not such persons still hold securities of the Company), on the closing date of any Discounted Offering, an amount that is equal to the difference between $1.50 and the issue price of the Discounted Offering, (or, in the case where there has been more than one Discounted Offering at the lowest price under such Discounted Offerings) multiplied by the number of units acquired by the initial subscribers under the private placements (the "Price Reset Payment"). The Company's obligation to pay the Price Reset Payment will be secured by the same security as for the Facility on a pari passu basis with the Facility.

The price reset clause provides the Partnership the assurance that should the Company complete any offering at a price less than $1.50 then the price of this offering will be effectively adjusted to the lowest offering price over the term of the longer of 12 months or the term of the Facility. For illustrative purposes only, the following example shows the calculation of the price reset clause, should the Company undertake two subsequent equity offerings, prior to the Facility being repaid or the longer of 12 months after completion, at $1.40 and $1.20 respectively:

 Offering         Calculation         Cash Payment          Potential Shares At first  subsequent  offering:       $1.50-$1.40 x       equals $1 million     714,286 shares                  10,000,000 units At second  subsequent  offering:       $1.40-$1.20 x       equals $2 million     1,666,667 shares                  10,000,000 units Total Price  Reset                               equals $3 million Adjusted  Effective Price  of Offering:                        equals $1.20 per unit 

The Partnership may, at its option, in lieu of all or part of the cash settlement of the Price Reset Payment, elect instead to receive the number of common shares of the Company which is equal to all or part of the Price Reset Payment, as the case may be, divided by the discounted offering price. Any future share issuances would be subject to normal TSX approval requirements. The Partnership would not be entitled to vote on such issuances.

Pre-emptive Right

The Company has also provided the Partnership with a pre-emptive right to maintain its equity interest in the Company, subject to disinterested shareholder approval, if required, provided that it maintains an equity interest of greater than 10% in the issued and outstanding common shares of the Company. The Company will not enter into or complete any financing which requires shareholder approval in order for the Partnership to exercise its Pre-emptive Right with respect to such financing unless it has previously obtained such approval. About Cerro Negro

The Cerro Negro mine is located 37km south east of the town of Cabildo in the Province of Petorca, V Region of Chile, and approximately 210km north of Santiago. All plant and mine sites are easily accessible and are located at elevations of less than 1200m in moderate terrain. Agricultural activity in the immediate area of the property is negligible and confined to rough grazing, apart from company sponsored trial avocado production.

Operations commenced in 1944, and between 1983 and 1996, Cerro Negro was owned by a predecessor company to Antofagasta Minerals, operating exclusively as a 1,200 tpd concentrator, producing 5,000 tpy copper in concentrates. In 1997, at a time of low copper prices and high costs, CMN was sold to its employees, and a small copper precipitate plant subsequently installed. This leaching operation was converted to SX in 1999 to produce copper sulphate and in 2001-02 to a 3,000 tpy SXEW operation; it was further expanded in 2005 to 4,000 tpy capacity and in 2007 to its current 6,000 tpy Cu.

Current copper cathode production capacity, including toll treatment, is approximately 6,000 tonnes per year, concentrator production capacity is approximately 9,600 tonnes of copper-silver concentrates per year, and copper sulphate production capacity is approximately 4,200 tonnes per year.

The toll treatment of oxides is governed by an agreement with Enami which purchases third party ore trucked in from small artisanal mines in the surrounding district. The agreement extends to 2011 and Cerro Negro production plan assumes treatment of 180,000 tonnes per year of this material to recover approximately 2,000 tonnes per year cathode.

CORO MINING CORP.

Alan Stephens, President and CEO

About Coro Mining Corp.:

The Company was founded with the goal of building a mining company focused on medium-sized base metals deposits in Latin America. The Company intends to achieve this through the exploration for, and acquisition of, projects that can be developed and placed into production and it has established an experienced development and exploration team to accomplish this. Coro has two main properties; Flores, in Chile and San Jorge, in Argentina, an option to acquire the Cerro Negro copper mine in Chile, as well as other exploration properties located in Chile.

This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Such forward-looking statements or information, including but not limited to those with respect to the prices of copper, estimated future production, estimated costs of future production, permitting time lines, involve known and unknown risks, uncertainties, and other factors which may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements or information. Such factors include, among others, the actual prices of copper, the factual results of current exploration, development and mining activities, changes in project parameters as plans continue to be evaluated, 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.

 Contacts: Coro Mining Corp. Michael Philpot Executive Vice-President (604) 682-5546 Email: investor.info@coromining.com Website: www.coromining.com

SOURCE: Coro Mining Corp.

Source: MARKET WIRE

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