Panoro Minerals Announces Receipt of Early Deposit Payment from Wheaton Precious Metals for the Cotabambas Project, Peru
Panoro Minerals Announces Receipt of Early Deposit Payment from Wheaton Precious Metals for
the Cotabambas Project, Peru
VANCOUVER, British Columbia, May 23, 2018 -- Panoro Minerals Ltd. (TSXV:PML) (Lima:PML) (Frankfurt:PZM) and its wholly-owned subsidiary, Panoro
Trading (Cayman) Ltd. (“Panoro” or the “Company”) are pleased to announce that they have received the sixth Early Deposit payment of US$750,000 as part of
the Precious Metals Purchase Agreement (the “Cotabambas Early Deposit Agreement”) with Wheaton Precious Metals International Ltd. (“WPMI”) (formerly
Silver Wheaton (Caymans) Ltd.), a wholly owned subsidiary of Wheaton Precious Metals Corp. (formerly Silver Wheaton Corp.) (TSX:WPM) (NYSE:WPM), in
respect of the Cotabambas project located in Peru.
The principal terms of the Cotabambas Early Deposit Agreement are as described in the Company’s press release on March 21, 2016, whereby WPMI will pay
Panoro upfront cash payments totalling US$140 million for 25% of the payable gold production and 100% of the payable silver production from the Company’s
Cotabambas Project in Peru. In addition, WPMI will make production payments to Panoro of the lesser of the market price and US$450 per payable ounce of
gold and US$5.90 per payable ounce of silver delivered to WPMI over the life of the Cotabambas Project.
Panoro is entitled to receive US$14 million spread over a period of up to 9 years as an early deposit with payments to be used to fund corporate expenses
related to the Cotabambas Project. The Cotabambas Early Deposit Agreement includes provisions to accelerate these payments through WPMI’s matching,
up to certain limits, any third party financing by Panoro targeted for exploration at the Cotabambas Project completed before the second anniversary of the
Cotabambas Early Deposit Agreement. The balance of the US$126 million, should WPMI elect to proceed with the Cotabambas Early Deposit Agreement, is
payable in installments during construction of the Cotabambas Project.
Together with this payment, the total advanced to date is US$6.25 million, including the accelerated tranche of US$2.0 million received in December 2016.
About Panoro
Panoro Minerals is a uniquely positioned Peru focused copper exploration and development company. The Company is advancing its flagship project,
Cotabambas Copper-Gold-Silver Project and its Antilla Copper-Molybdenum Project, both located in the strategically important area of southern Peru. The
Company is well financed to expand, enhance and advance its projects in the region where infrastructure such as railway, roads, ports, water supply, power
generation and transmission are readily available and expanding quickly. The region boasts the recent investment of over US$15 billion into the construction or
expansion of four large open pit copper mines.
Since 2007, the Company has completed over 80,000 meters of exploration drilling at these two key projects leading to substantial increases in the mineral
resource base for each, as summarized in the table below.
Summary of Cotabambas and Antilla Project Resources
Project Resource
Classification
Million
Tonnes Cu (%) Au (g/t) Ag (g/t) Mo (%)
Cotabambas Cu/Au/Ag Indicated 117.1 0.42 0.23 2.74 0.001
Inferred 605.3 0.31 0.17 2.33 0.002
@ 0.20% CuEq cutoff, effective October 2013, Tetratech
Antilla Cu/Mo Indicated 291.8 0.34 - - 0.01
Inferred 90.5 0.26 - - 0.007
@ 0.175% CuEq cutoff, effective May 2016, Tetratech
Preliminary Economic Assessments (PEA) have been completed for both the Cotabambas and Antilla Projects, the key results are summarized below.
Summary of Cotabambas and Antilla Project PEA Results
Key Project Parameters
Cotabambas Cu/Au/Ag
Project1
Antilla Cu
Project2
Process Feed, life of mine million tonnes 483.1 118.7
Process Feed, daily Tonnes 80,000 20,000
Strip Ratio, life of mine 1.25 : 1 1.38 : 1
Before
Tax1
NPV7.5% million USD 1,053 520
IRR % 20.4 34.7
Payback years 3.2 2.6
After
Tax1
NPV7.5% million USD 684 305
IRR % 16.7 25.9
Payback years 3.6 3.0
Annual
Average
Payable
Metals
Cu thousand tonnes 70.5 21.0
Au thousand ounces 95.1 -
Ag thousand ounces 1,018.4 -
Mo thousand tonnes - -
Initial Capital Cost million USD 1,530 250
1. Project economics estimated at commodity prices of; Cu = US$3.00/lb, Au = US$1,250/oz, Ag = US$18.50/oz, Mo = US$12/lb
2. Project economics estimated at long term commodity price of Cu = US$3.05/lb and Short term commodity price of Cu = US$3.20, US$3.15 and
US$3.10 for Years 1,2 and 3 of operations, respectively.
The PEAs are considered preliminary in nature and include Inferred Mineral Resources that are considered too speculative to have the economic
considerations applied that would enable classification as Mineral Reserves. There is no certainty that the conclusions within the updated PEA will be realized.
Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
Luis Vela, a Qualified Person under National Instrument 43-101, has reviewed and approved the scientific and technical information in this press release.
On behalf of the Board of Panoro Minerals Ltd.
Luquman A. Shaheen, M.B.A., P.Eng., P.E.
President & CEO
FOR FURTHER INFORMATION, CONTACT:
Panoro Minerals Ltd.
Luquman A. Shaheen, President & CEO
Phone: 604.684.4246
Email: [email protected]
Web: www.panoro.com
Renmark Financial Communications Inc.
Laura Welsh
Tel.: (416) 644-2020 or (416) 939-3989
Web: www.renmarkfinancial.com
CAUTION REGARDING FORWARD LOOKING STATEMENTS: Information and statements contained in this news release that are not historical facts are
“forward-looking information” within the meaning of applicable Canadian securities legislation and involve risks and uncertainties. Examples of forward-looking
information and statements contained in this news release include information and statements with respect to:
• acceleration of payments by Wheaton Metals to match third party financing by Panoro targeted for exploration at the Cotabambas Project
• payment by Wheaton Metals of US$140 million in installments
• Panoro weathering the current depressed equity and commodity markets, minimizing dilution to existing shareholders and making targeted investments
into exploration at the Cotabambas Project
• mineral resource estimates and assumptions
• the PEA, including, but not limited to, base case parameters and assumptions, forecasts of net present value, internal rate of return and payback;
• copper concentrate grade from the Cotabambas Project;
Various assumptions or factors are typically applied in drawing conclusions or making the forecasts or projections set out in forward-looking information. In
some instances, material assumptions and factors are presented or discussed in this news release in connection with the statements or disclosure containing
the forward-looking information and statements. You are cautioned that the following list of material factors and assumptions is not exhaustive. The factors
and assumptions include, but are not limited to, assumptions concerning: metal prices and by-product credits; cut-off grades; short and long term power
prices; processing recovery rates; mine plans and production scheduling; process and infrastructure design and implementation; accuracy of the estimation of
operating and capital costs; applicable tax and royalty rates; open-pit design; accuracy of mineral reserve and resource estimates and reserve and resource
modeling; reliability of sampling and assay data; representativeness of mineralization; accuracy of metallurgical test work; and amenability of upgrading and
blending mineralization.
Forward-looking statements are subject to a variety of known and unknown risks, uncertainties and other factors which could cause actual events or results to
differ materially from those expressed or implied by the forward-looking statements, including, without limitation:
• risks relating to metal price fluctuations;
• risks relating to estimates of mineral resources, production, capital and operating costs, decommissioning or reclamation expenses, proving to be
inaccurate;
• the inherent operational risks associated with mining and mineral exploration, development, mine construction and operating activities, many of which
are beyond Panoro’s control;
• risks relating to Panoro’s ability to enforce Panoro’s legal rights under permits or licenses or risk that Panoro’s will become subject to litigation or
arbitration that has an adverse outcome;
• risks relating to Panoro’s projects being in Peru, including political, economic and regulatory instability;
• risks relating to the uncertainty of applications to obtain, extend or renew licenses and permits;
• risks relating to potential challenges to Panoro’s right to explore and/or develop its projects;
• risks relating to mineral resource estimates being based on interpretations and assumptions which may result in less mineral production under actual
circumstances;
• risks relating to Panoro’s operations being subject to environmental and remediation requirements, which may increase the cost of doing business and
restrict Panoro’s operations;
• risks relating to being adversely affected by environmental, safety and regulatory risks, including increased regulatory burdens or delays and changes of
law;
• risks relating to inadequate insurance or inability to obtain insurance;
• risks relating to the fact that Panoro’s properties are not yet in commercial production;
• risks relating to fluctuations in foreign currency exchange rates, interest rates and tax rates; and
• risks relating to Panoro’s ability to raise funding to continue its exploration, development and mining activities.
This list is not exhaustive of the factors that may affect the forward-looking information and statements contained in this news release. Should one or more of
these risks and uncertainties materialize, or should underlying assumptions prove incorrect, actual results may vary materially from those described in the
forward-looking information. The forward-looking information contained in this news release is based on beliefs, expectations and opinions as of the date of
this news release. For the reasons set forth above, readers are cautioned not to place undue reliance on forward-looking information. Panoro does not
undertake to update any forward-looking information and statements included herein, except in accordance with applicable securities laws.
Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.