Centenera Options Out its Organullo Gold Project, Salta Province, Argentina
NR-18-13 October 22, 2018
Centenera Options Out its Organullo Gold Project,
Salta Province, Argentina
Vancouver, British Columbia – Centenera Mining Corporation ( “Centenera” or the “Company”) - (TSXV: CT,
OTCQB: CTMIF) announces that it has entered into a property option agreement (the “Agreement”) with Yamana Gold
Inc. (“Yamana”), whereby Yamana, through a subsidiary, has been granted an option (the “ Option”) to acquire an initial
70% interest in the Company’s Organullo Gold Project (the “ Project” or “ Organullo”). Organullo is located in Salta
Province, northwestern Argentina.
“Organullo is a gold exploration project that is currently 100%-owned by Centenera. The Project has the potential to
host a large, bulk -tonnage gold deposit, however, significant drilling is required in order to fully investigate that
potential,” stated Keith Henderson, the Company’s President & CEO. “Under the terms of the Agreement, the related
expenditures will be funded solely by Yamana, potentially shielding Centenera shareholders from future dilution ,
while allowing them to maintain a minority interest in the Project.”
Organullo Option Terms
Under the terms of the Agreement, Yamana may exercise the Option by the (i) preparation and delivery of a Pre-Feasibility
Study (“PFS”) prepared in accordance with National Instrument 43 -101 Standards of Disclosure for Mineral Projects
(“NI 43-101”) that reports an aggregate M easured and I ndicated Mineral Resource of a minimum of 1,000,000 gold -
equivalent ounces^ by the 6 th anniversary of the effective date of the Agreement; (ii) completion of property-related
expenditures of at least US $5,000,000 in the aggregate ; and (iii) cash payments of US $1,250,000 in the aggregate, as
follows:
Date US$ Cash
Payments
US$ Expenditure
Commitments NI 43-101 Report
On Signing of Agreement $100,000 (paid)
First Anniversary $100,000
Second Anniversary $150,000 $1,250,000
Third Anniversary $200,000
Fourth Anniversary $200,000 $3,750,000
Exercise of Option $500,000 Pre-Feasibility Study
Total $1,250,000 $5,000,000
Yamana shall be responsible for funding all exploration expenditures incurred during the Option period. Upon the exercise
of the Option, Yamana and Centenera shall be deemed to have formed a joint venture (the “Joint Venture”) with the initial
Joint Venture interests being 70% as to Yamana and 30% as to Centenera; provided that prior to or concurrently with the
exercise of the Option, Yamana shall have a top-up right (the “Top-up Right”) to acquire an additional 5% interest in the
Project (being 75% in aggregate) by making a cash payment to Centenera equal to US $3.00 per gold equivalent ounce of
Measured and Indicated Mineral Resources reported in the PFS.
Yamana and Centenera shall each fund exploration and/or development work programs in proportion to their J oint
Venture ownership percentage; provided that if either party contributes less than its proportionate interest to a work
program, that party's interest in the Joint Venture shall be adjusted in accordance with the party's contribution . If as a
result, such party dilutes their interest to 10% or less, the diluted party’s ownership interest shall automatically convert
Centenera Mining Corporation 2 October 22, 2018
NR-18-13 Continued
to a 2% net smelter returns (“NSR”) royalty. The non-diluting party may repurchase 1% of the NSR royalty within 30 days
of a production decision being made on the Project for US$5,000,000.
^ Gold equivalent ounces means (i) the number of gold ounces defined as a Measured Mineral Resource, an Indicated Mineral Resource plus (ii) the
number of ounces of silver defined as a Measured Mineral Resource, an Indicated Mineral Resource expressed as equivalent ounc es of gold,
calculated at a ratio of 66:1 (all terms as defined in NI 43-101).
About Organullo
The Organullo gold project is a relatively advanced exploration project and has been explored in the past by several
companies including Triton Mining Corp., Northern Orion Explorations Ltd., Newmont Mining, and Cardero Resource Corp.
The Project has 43 historical drill holes totalling 8,174 metres of diamond and reverse circulation drilling. A report entitled,
“Organullo Exploration T argets & Pit Optimization”, dated June 6, 2012 , was authored by Robin Rankin of GeoRes,
Australia and the work resulted in (i) potential exploration target tonnages and (ii) potential exploration target grades of
gold at the Organullo property, which were reported at lower and upper ranges (see Table 1 below). This work is described
in a N I 43-101 Technical Report, entitled “2015 Technical Report on the Organullo Project”, dated April 17, 2015, and
authored by Equity Exploration Consultants Ltd. The Project requires additional drilling to fully define mineralization in
the area of historical drilling and to fully test the exploration potential of the project.
Table 1: Estimation of Target Tonnage and Grade at Organullo
Target
Range
Base Case
Gold Cut-Off
g/t
Tonnage
(x ‘000)
Gold
Grade
g/t
Gold
Ounces
(x ‘000)
Lower 0.5 19,800 0.94 600
Upper 0.5 31,600 0.92 940
Estimation of target tonnage and grade was determined using two common strike and dip directions, each characteristic
of a specific exploration target area. Block models were built for two target areas. Block sizes were defined to emphasise
the narrow vein orientation and gold grades were estimated into each model’s blocks using parameters adapted to the
common vein direction in each area. Raw drill hole data was composited to 2.0 metres downhole. No limits were applied
to either input data or output estimates and the estimation scan distances of up to 100 metres in the plane of the veins
was adequate to fill the blocks between drill holes and extended was unconstrained by geology. Block estimation was
done using an inverse distance squared algorithm. Following this evidence, increasing the scan distances by sim ple
multiples produced reasonable figures for ranges of exploration targets. Scan distances of 200 metres and 300 metres
were used for lower and upper ranges of exploration targets.
It should be noted that these potential exploration target quantities and grades are conceptual in nature, that
insufficient exploration and geological modelling has been done to define a mineral resource, and that it is uncertain if
further exploration will result in the delineation of a mineral resource.
About Centenera
Centenera is a mineral resource company trading on the TSX Venture Exchange under the symbol “CT” and on the OTCQB
exchange under the symbol “ CTMIF”. The Company is focused 100% on mineral resource assets in Argentina, including
gold, silver, copper-gold and lithium assets. Centenera’s assets are located in Salta, San Juan and Santa Cruz Provinces,
which are widely recognized as being favourable jurisdictions for mining and exploration.
About Yamana
Yamana is a Canadian -based gold producer with significant gold production, gold development stage properties,
exploration properties, and land positions throughout the Americas including Canada, Brazil, Chile and Argentina. Yamana
plans to continue to build on this base through existing operating mine expansions, throughput increases, development
of new mines, the advancement of its exploration properties and, at times, by targeting other gold consolidation
opportunities with a primary focus in the Americas.
Centenera Mining Corporation 3 October 22, 2018
NR-18-13 Continued
Qualified Person
Keith J. Henderson, P.Geo., is the Company’s qualified person as defined by NI 43-101 and has reviewed the scientific and
technical information that forms the basis for portions of this news release . He has approved the disclosure herein.
Mr. Henderson is not independent of the Company, as he is an employee of the Company and holds securities of the
Company.
On Behalf of the Board of Directors of
CENTENERA MINING CORPORATION
“Keith Henderson”
President & CEO
For further details on the Company readers are referred to the Company's web site (www.centeneramining.com) and its
Canadian regulatory filings on SEDAR at www.sedar.com.
For further information, please contact:
Keith Henderson
Phone: 604-638-3456
E-mail: [email protected]
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Ventu re Exchange) accepts
responsibility for the adequacy or accuracy of this news release.
This news release contains forward- looking statements and forward- looking information (collectively, "forward -looking statements") within the
meaning of applicable Cana dian and U.S. securities legislation, including the United States Private Securities Litigation Reform Act of 1995. All
statements, other than statements of historical fact, included herein including, without limitation, statements regarding the exercise of the Option,
the formation of the Joint Venture, the exercise of the Top-up Right, the conversion of a party's interest to an NSR royalty and the anticipated business
plans and timing of future activities of the Company, are forward- looking statements. Although the Company believes that such statements are
reasonable, it can give no assurance that such expectations will prove to be correct. Often, but not always, forward looking information can be
identified by words such as "pro forma", "plans", "expects", "may", "should", "budget", "scheduled", "estimates", "forecasts", "intends", "anticipates",
"believes", "potential" or variations of such words including negative variations thereof, and phrases that refer to certain actions, events or results
that may, could, would, might or will occur or be taken or achieved. In making the forward-looking statements in this news release, the Company has
applied several material assumptions, including without limitation, that market fundamentals will result in sustai ned precious metals demand and
prices, the receipt of any necessary permits, licenses and regulatory approvals in connection with the future development of the Company’s Argentine
projects in a timely manner, the availability of financing on suitable terms for the development, construction and continued operation of the Company
projects, and the Company’s ability to comply with environmental, health and safety laws.
Forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the actual results, perfo rmance or
achievements of the Company to differ materially from any future results, performance or achievements expressed or implied by the forward-looking
information. Such risks and other factors include, among others, operating and technical difficulties in connection with mineral explorati on and
development and mine development activities at the Project, estimation or rea lization of mineral reserves and mineral resources, the timing and
amount of estimated future production, costs of production, capital expenditures, the costs and timing of the development of new deposits, the
availability of a sufficient supply of water a nd other materials, requirements for additional capital, future prices of precious metals and copper,
changes in general economic conditions, changes in the financial markets and in the demand and market price for commodities, possible variations
in ore grade or recovery rates, possible failures of plants, equipment or processes to operate as anticipated, accidents, labour disputes and other risks
of the mining industry, delays or the inability of the Company to obtain any necessary permits, consents or aut horizations required, including TSX
Venture Exchange acceptance of any current or future property acquisitions or dispositions, financing or other planned activities, changes in laws,
regulations and policies affecting mining operations, hedging practices, currency fluctuations, title disputes or claims limitations on insurance
coverage and the timing and possible outcome of pending litigation, environmental issues and liabilities, risks related to joint venture operations, and
risks related to the integration of acquisitions, as well as those factors discussed under the heading "Risk Factors" in the Company's latest Management
Discussion and Analysis and other filings of the Company with the Canadian Securities Authorities, copies of which can be found under the Company's
profile on the SEDAR website at www.sedar.com.
Readers are cautioned not to place undue reliance on forward looking statements. Except as otherwise required by law, the Company undertakes no
obligation to update any of the forward-looking information in this news release or incorporated by reference herein.
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