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COPPER-GOLD EXPLORATIONS & DEVELOPMENT IN SOUTH AMERICA

News

 March 05, 2012
Coro Announces Development Alternative For San Jorge And Highlights From Copper Leach Project Preliminary Feasibility Study

 March 5 2012, Coro Mining Corporation ("Coro", or the "Company") (TSX symbol: COP) is pleased to announce a new development alternative for San Jorge and the highlights from the Copper Leach Project ("the Project") based on a Preliminary Feasibility Study ("PFS") (the "Propipe PFS") by Process and Pipeline Projects SA. ("Propipe"), based in Santiago, Chile, which will be filed on SEDAR within 45 days. The Project is located in the Provinces of Mendoza and San Juan, Argentina. This announcement describes the highlights from the Propipe PFS for development of the Project using heap leaching only, involving the construction of an SXEW heap leach plant outside of the province of Mendoza in the neighbouring pro-mining province of San Juan. Ore transport would be by means of a 22km long railway line to be constructed for the Project. Current legislation in the Province of Mendoza prohibits the use sulphuric acid required in heap leaching of copper ore. The Company and Propipe have received a legal opinion that there should be no legal impediment to the transport of ore between Mendoza and San Juan.

This PFS takes into account the outcomes of an engineering study completed in 2008 by Ausenco Canada Inc. ("Ausenco"), as announced in the Company' news release dated April 3, 2008, and revised and updated by Propipe in late 2011. The Propipe PFS includes the resources, reserves, open pit mine plan, operating and capital costs and financial analysis for a leach Project which describes the production of up to 25,000 tonnes (55 million lbs) per year of copper cathode for a period of 10 years. It is a comprehensive study of the viability of the Project that has advanced to a stage where the mining method has been established and an effective method of mineral processing has been determined, and includes a financial analysis based on reasonable assumptions of technical, engineering, legal, operating, economic, social, and environmental factors and the evaluation of other relevant factors which are sufficient to determine if all or part of the mineral resource may be classified as a mineral reserve.

The Propipe PFS was prepared in conjunction with a NI 43-101 resource estimate completed by NCL Ingeniería y Construcción S.A. ("NCL"), Santiago, Chile, as announced in the Company's news release on January 16, 2008. No additional drilling has been completed on the Project since the date of that estimate, and the resource has not been updated since then. The mine plan is unchanged from the Ausenco report, and no additional metallurgical testwork has been completed since the date of the Ausenco report. Full particulars of all exploration data, the key assumptions, parameters and methods used to estimate mineral resources, quality control and data verification methods are as disclosed in the Ausenceo report, filed by the Company on SEDAR on May 23, 2008.

All references to $ in this News Release are references to US$.

Highlights:
  • Measured and Indicated Resources of oxide and enriched material of 58 million tonnes at 0.59%CuT containing 342,600 tonnes (750 million lbs) of copper
  • Proven and Probable Mineral Reserves of oxide and enriched ores of 48 million tonnes at 0.61% CuT containing 294,600 tonnes (650 million lbs) of copper
  • Mine life: 10 years
  • Total copper production: 223,400 tonnes (492 million lbs)
  • Copper price: $2.80/lb, flat
  • Average cash operating costs in years 1 to 5: $1.26/lb Cu
  • Stand-alone acid plant generating Project acid requirements and contributing to power requirements
  • Initial capital costs: $184.5 million (with an accuracy of +/- 25%, including $5 million in project contingency, $15 million in other provisions and $8.2 million in working capital)
  • Pre-tax NPV(10%): $259.5 million, IRR: 41%
  • After tax NPV(10%): $132.7 million, IRR: 29%
  • Copper recovery sensitivity (+/-10%): NPV(10%): +/- $48.6 million, IRR: +/- 6.8%
  • Operating cost sensitivity (+/-10%): NPV(10%): +/- $23.4 million, IRR: +/- 3.4%
  • Capital cost sensitivity ( +/-10%): NPV(10%): +/- $12.6 million, IRR: +/- 3.5%
  • Sulphur price sensitivity (+/-10%): NPV(10%): +/- $2.6 million, IRR: +/- 0.4%
  • Copper price sensitivity:

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Alan Stephens, President and CEO of Coro commented, "Coro is pleased with the outcome of this latest study which once again confirms the robust nature of San Jorge. The Company is confident that this revised San Jorge development plan can be executed in an environmentally responsible manner to the lasting economic and social benefit of the Provinces of Mendoza and San Juan. In addition, the Project has the potential to more than satisfy Argentina's current consumption of copper, and thus could be developed in accordance with the country's stated policy of reducing imports. We further believe that the combination of what would essentially be a rock quarrying operation, similar to many others currently operating in Mendoza, together with a processing plant located in San Juan, which has a vibrant and well developed metalliferous mining industry, should satisfy essentially all of the objections that were raised to the previous flotation project which was denied legislative ratification in Mendoza last year.

A copy of this news release together with an accompanying letter will be sent to all of the members of the recently formed Federal Organisation of Mining Provinces ("OFEMI"), which includes Mendoza, in order that they may consider the importance of this Project to Argentina. Upon the successful development of this leach project the Company will consider the alternatives for a flotation project."

I. Mineral Resources:
San Jorge is a mid-sized porphyry copper gold deposit, containing oxide, enriched, and primary mineralization. Resources are contained within Oxide material, which can only be processed by heap leach methods; Enriched material, which could be processed by heap leach or flotation; and Primary material which can only be processed by flotation methods. The table below summarizes mineral resources on the San Jorge property. Mineral reserves disclosed on the following page are included in the mineral resource numbers below. The mineral resource calculations described below are effective as at January 16, 2008 and have remained unchanged since this date.

Table 1: Mineral Resources
Measure & Indicated (at 0.30% CuT cut-off)
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The gold and the Primary resources would not be recoverable in the Leach Only Project, and therefore only the leachable oxide and enriched copper resources within an economic envelope of $1.50/lb copper are shown in Table 2 below:

Table 2: Leach Only Project Mineral Resources Within Economic Envelope, based on a $1.50/lb
Cu price

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II. Mineral Reserves, Mining, Processing and Production Plan:
The Project contemplates an open pit mine to extract oxide and enriched material and their processing by heap leach methods, (including bacterial leaching for the enriched material) and recovery of cathode copper via solvent extraction-electro winning (SXEW) together with an on-site sulphur burning acid plant. Overall ore contained in the mine plan developed by NCL is 48.4 million tonnes, with an average grade of 0.61% CuT. The Mineral Reserves are categorized as 83% Proven and 17% Probable of which 55% is oxide and 45% is enriched as is set out in Table 3. The Inferred resources are currently considered as waste. The mineral reserve calculations described below are effective as at May 23, 2008 and subsequently validated by NCL.

Table 3: San Jorge -- Mineral Reserves by Categories and Ore Type
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The mine plan was driven by two factors; firstly to process up to a maximum of 6.3 million tonnes per year in the crushing plant; and secondly to minimize the overall strip ratio, especially in the early years. This plan to place a total of 48.4 million tonnes of oxide and enriched material on to heap leach pads was then used by Propipe to prepare a processing plan for the production of up to 25,000 tonnes per year of copper cathodes during the Life of Mine ("LOM") as is set out in Table 4:

Table 4: Mine, Plant Processing and Production Plan
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The overall LOM strip ratio is relatively low at 0.77:1, peaking at 1.65:1 in the fifth year with a minimum strip ratio of 0.25:1 in year eight.

Since the Ausenco engineering study was published in May 2008, the economic parameters concerning capital and operating costs and copper price have changed significantly. Costs have increased due to escalation of labour cost, diesel, power, consumables and materials, plus the additional transport cost resulting from the proposed location of the process plant 22 km from the mine. At the same time, the copper prices have also increased significantly, compensating for the upward trend in costs. The technical parameters of the project remained unchanged from the Ausenco study, except for the location of the heap leach operation. In order to assess changes in the economic parameters since 2008, NCL carried out an analysis of the validity of the open pit design, reserves and mine plan evaluated in the Ausenco study, and concluded that all those elements are valid under the conditions of the current study. The main conclusion of the analysis is that increases in the operating costs are mostly offset by increases in copper price, to the extent that the selected pit from a Whittle exercise run using the current parameters is virtually identical to the pit selected in the 2008 Study. The validity of the Ausenco mine plan was therefore confirmed; it preferentially extracts oxide ore early in the mine life, delaying the mining and processing of the enriched ore which had slower leach kinetics, as well as deferring project capital. The production plan contains 223,400 tonnes (492 million lbs) of recoverable copper as cathode.

A total of seventeen 4 & 6 m column tests were completed at SGS Laboratories, Santiago, Chile in 2008. The metallurgical parameters were validated by Propipe from a diffusion controlled leaching model developed by Ausenco in 2008. That model used a scale-up factor of 1.5 and derivation of the projected leach cycle of 115 days for oxide and 150 days for enriched, average acid consumptions of 26.1 kg/t for oxide and 18.3 kg/t for enriched, and recoveries of 85% of total copper for oxide and 66.3% of total copper for enriched.

Capital and operating cost estimates were updated by Propipe and reflect the market environment in Argentina (Q4 2011) for owner mining, crushing, agglomeration, transport and stacking of ore, acid production from a sulfur burning acid plant, cathode production by solvent extraction and electro-winning, and cathode transportation. After a series of trade off studies of the various power and acid supply alternatives, it was concluded that current and projected sulfuric acid shortages were best addressed by the inclusion of a 140,000 ton per year on-site sulfur burning acid plant. The acid and co-gen power plant was estimated to have a capital cost of $23.6 million, and was sized to provide the projected sulfuric acid requirements for the operation, and approximately half of the 10 MW required project power. The rest of the power will be supplied from the Argentinean grid in Calingasta located 93 km to the north of the leaching plant, in San Juan province, at a cost of $11.5 million.

Trade off studies were also performed to determine the most cost efficient way of hauling ore from the mine site to the leach process plant in San Juan. Trucking, conveyor and rail were studied, with the lowest operational cost and optimal technical alternative being a 22 km railway with 3,000 HP locomotive and 42 wagons of 56 tonnes capacity, for a total cost of $23.5 million. Water will be supplied by a 20 km pipeline from the El Tigre stream located in the Yalguaraz ranch, owned by Minera San Jorge.

III. Operating Costs:
All operating costs associated with ore transport to San Juan and acid plant were included in the plant operating costs, as shown in Table 5:

Table 5: Average Annual Operating Costs
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IV. Capital Costs:
Initial capital costs, including mining fleet, ore transport, plant, infrastructure, other provisions, owner costs, working capital, and contingencies, were estimated by Propipe at $184.5 million, as set out in Table 6:

Table 6: Capital Cost Estimate
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An additional $17 million in capital is expended over the life of the Project as deferred, sustaining and closure costs. The capital cost estimate excludes losses or gains that may arise from foreign exchange rate variations, cost escalation, and other factors, as detailed in the PFS.

V. Financial Analysis:
The Project has been evaluated on both a pre-tax and after-tax basis, including export levy and provincial royalty. The base case operating cash flow peaks at $76 million in the 2nd year with a minimum cash flow of $23 million in the tenth year, which is the last operating period, as shown in Table 7 below:
Table 7: Operating Cash Flows
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A summary of the economic evaluation at the base case copper price of $2.80/lb is shown in Table 8:
Table 8: Economic Evaluation at $2.80/lb
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VI. NI 43-101 PFS:
Propipe managed the preparation of the PFS which will be completed and filed on SEDAR and Coro's web site within 45 days of this release.
All principal technical personnel and Qualified Persons ("QP") participating in the development and review of this PFS have extensive relevant experience. The various parties responsible for supplying data and other information for the report are as follows:
Sergio Alvarado, BSc (Hons.) Geology, Member of Canadian Institute of Mining, Metallurgy and Petroleum (CIM), The Chilean Mining Commission (CMC) and The Chilean Mining Engineers Institute (IIMCh), who served as an associated consultant for Propipe, was responsible for the overall preparation of the PFS as defined in National Instrument 43-101, Standards of Disclosure for Mineral Projects and in compliance with Form 43-101F1. He has no relationship with the Company other than in the preparation of this report.
Rodrigo de Brito Mello, FAusIMM (Consulting Geologist, RBM Ltda) served as the Qualified Person for those parts of the PFS relating to geology and resource estimation. Mr. Mello completed a site visit from October 22nd to 26th 2007, when he was employed by NCL as a geologist and served as QP for both reports mentioned above. Mr Alvarado has no relationship with the Company other than in the preparation of this report. He has no relationship with the Company other than in the preparation of this report.

Eduardo Rosselot, Mining Engineer, Chartered Engineer (CEng) Engineering Council UK, Professional Member of Institute of Materials, Minerals and Mining (IMMM) UK, Professional Member of Colegio de Ingenieros de Chile, who served as an associated consultant for NCL, was responsible for the section relating to mining. Mr. Rosselot visited the property in January 2012. He has no relationship with the Company other than in the preparation of this report.

Enrique Quiroga, Mining Engineer, member of Engineering School (Chile) and The Chilean Mining Commission, who served as an associated consultant for Propipe, was responsible for those sections relating to mining and process design, engineering and cost estimation. Mr Quiroga visited the property in September 2011. He has no relationship with the Company other than in the preparation of this report.
Jaime Simpson, employed by Propipe as Technical & Development and Research Manager, was responsible for metallurgical process, engineering input, capital and operational cost estimate for plant. Mr Simpson visited the property in January 2011. He has no relationship with the Company other than in the preparation of this report.

Victor Araya, employed by Propipe as Project Director, was responsible for infrastructure capital estimate and undertaking cash flow analysis. He has no relationship with the Company other than in the preparation of this report.
Heriban Soto, MSc, PhD, QP, Technical Director SGS, was responsible for supervising the metallurgical test work and reporting. He has no relationship with the Company other than in the preparation of this report.

The financial analysis was completed by Coro management.
Collectively, Sergio Alvarado, Rodrigo de Brito Mello, Eduardo Rosellot, Enrique Quiroga and Heriban Soto are the Qualified Persons for purposes of National Instrument 43-101, and have approved the San Jorge Information contained in this press release.

Alan Stephens FIMMM, President and CEO of Coro, a geologist with more than 36 years of industry experience is the Qualified Person for Coro who has reviewed and approved the contents of this press release.

All mineral resources have been estimated in accordance with the definition standards on mineral resources and mineral reserves of the Canadian Institute of Mining, Metallurgy and Petroleum referred to in National Instrument 43-101, commonly referred to as NI 43-101. U.S. reporting requirements for disclosure of mineral properties are governed by the United States Securities and Exchange Commission (SEC) Industry Guide 7. Canadian and Guide 7 standards are substantially different. This press release uses the terms "measured," "indicated" and "inferred" resources. Mineral resources which are not mineral reserves do not have demonstrated economic viability. We advise investors that while those terms are recognized and required by Canadian regulations, the SEC does not recognize them. Inferred mineral resources are considered too speculative geologically to have economic considerations applied to them that enable them to be categorized as mineral reserves.


CORO MINING CORP.

"Alan Stephens"
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 and precious 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. Coro's properties include the advanced San Jorge copper-gold project, in Argentina, and the Berta, El Desesperado, Chacay, Llancahue, and Celeste copper exploration properties located in Chile.

About ProPipe S.A.:
ProPipe is a Chilean supplier of consultancy, engineering and project management services to its customers in the mining process, infrastructure and environment markets. ProPipe have relevant experience in conceptual and basic design, preliminary feasibility and feasibilities studies, and detailed engineering for mining companies in Chile; some of the main clients are BHP Billiton's Minera Escondida, Antofagasta Minerals's Minera Los Pelambres, Minera El Tesoro, Minera Esperanza, Minera Las Cenizas and Algorta Norte. The latest Propipe's projects are Camarones 12,000 ton per year Copper Cathodes plants, Algorta Norte 78 km Sea Water Pipeline and Minera Escondida Coloso Filter Plant Expansion Project.
ProPipe main office is located in Santiago of Chile, and have more than 100 professionals dedicated to the design and management of engineering projects, allowing covering efficiently the stages of evaluation, design and implementation of projects.

For further information please visit the Company's website at www.coromining.com or contact Michael Philpot, Executive Vice-President at (604) 682 5546 or investor.info@coromining.com


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 Company's business strategy, the prices of copper, construction schedules, operating and capital budgets, anticipated mineral recoveries, 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, global economic conditions, changes in prices or demand for commodities including, in particular, copper, changes in exchange rates, changes in national or local governments, changes in legislation or regulation or the implementation or interpretation of laws or regulations, changes in tax rates, timeliness of government approvals, political or environmental activism, the factual results of current exploration, development and mining activities, accuracy of resource and reserve estimates, changes in project parameters as plans continue to be evaluated, access to skilled personnel, labour relations, costs of labour, costs and availability of materials and equipment, changes in refining or transportation costs, as well as those other 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. The Company does not intend, and does not assume any obligation, to update these forward-looking statements, except as required by applicable laws. Actual results may differ materially from those expressed or implied by such forward-looking statements.