Coro Mining Corp.
TSX : COP

Coro Mining Corp.

August 09, 2007 15:22 ET

Coro Mining Corp. Reports on Second Quarter 2007

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Aug. 9, 2007) - Coro Mining Corp. (TSX:COP) -

1. Highlights:

- Gross proceeds of CA$13.5 million raised from Initial Public Offering in July 2007

- Commenced trading on the TSX on July 10, 2007

- Cash and cash equivalents of $15.3 million as at July 31, 2007

- Commenced engineering studies at San Jorge, Argentina

- Action filed against the Province of Mendoza for passing legislation prohibiting the use of toxic chemicals in mining

- Initiated delineation drilling program at Barreal Seco, in Chile (4,620 metres)

- Definition drilling undertaken at San Jorge (830 metres)

- Drill program started at Salvadora and Celeste properties, in Chile

A full version of the June 30 2007 Financial Statements and Management Discussion and Analysis of the Company is available on the Company's website at www.coromining.com.

2. Company Overview

Coro Mining Corp. (the "Company") is a development stage company, founded with the goal of building a mining company focused on medium-sized base and precious metals deposits in Latin America. The Company's strategy is to become a mid tier copper producer within three to four years. The Company's focus will be on low capital cost, open pit, heap leachable projects in politically stable jurisdictions. It intends to establish a pipeline of projects with the objective of developing a new mine every two to three years. It has established an experienced exploration and development team to undertake this goal. The Company has two material mineral properties which are located in Argentina (San Jorge) and Chile (Barreal Seco), as well as other less significant exploration properties which are located in Chile and Mexico.

3. 2007 Second Quarter Review

On July 10, 2007 the Company completed its Initial Public Offering (IPO) which raised gross proceeds of CA$13.5 million. Concurrent with the completion of the IPO the Company commenced trading on the Toronto Stock Exchange (TSX) under the symbol "COP".

The San Jorge project was dealt a setback in June when the Provincial Government of Mendoza introduced legislation that prohibited the use of toxic chemicals including sulphuric acid in any mining activity in the Province. The new legislation, unless amended or repealed, could impair the Company's ability to develop San Jorge. The Company believes that this legislation is unconstitutional and has filed an action against the Provincial Government of Mendoza ("Government") in an attempt to protect its rights to develop San Jorge. The Company was one of twelve companies that filed an action against the Government prior to the filling deadline.

During the quarter, the Company also updated its NI 43-101 technical report for Barreal Seco, to incorporate the new resource statement after the December 2006 drill campaign and also prepared a NI 43-101 technical report for San Jorge.

At Barreal Seco the Company undertook a delineation drill program to the northwest extension of the main orebody (refer to section 4.3). The drill rig has been moved on to the Salvadora and Celeste properties for further drill programs that are scheduled for the third quarter.

At San Jorge, the development team in conjunction with Ausenco Americas ("Ausenco"); an engineering, procurement and construction management services company, continued working on the pre-feasibility study, the results of which are expected in late 2007. A definition drill program at San Jorge was undertaken and by quarter end with 830 meters of core drilling undertaken. In May 2007, the company also made its second option payment on San Jorge.

4. 2007 Expenditures

The following table details the Company's expenditure's by quarter.



--------------------------------------------------------------------------
Table 1: Expenditures summary
($000's) Q106 Q206 Q306 Q406 Q107 Q207
--------------------------------------------------------------------------
Exploration costs $ 737 $ 545 $1,304 $1,769 $1,229 $1,372

Development costs - - 2,790 1,234 706 3,336
Total exploration and
development costs 737 545 4,094 3,003 1,935 4,708
Development costs
capitalized - - (2,790) (1,234) (706) (3,336)
Corporate costs 85 111 179 202 209 242
Depreciation and
amortization 11 11 11 17 17 17
Interest income (40) (42) (100) (108) (81) (72)
Other expenses 18 29 20 (12) 0 (2)

Stock-based compensation 13 30 33 47 55 66
--------------------------------------------------------------------------

Net loss $ 824 $ 684 $1,447 $1,915 $1,429 $1,623
--------------------------------------------------------------------------


Exploration costs were up from the first quarter, principally as a result of the delineation drill program conducted at Barreal Seco, where 23 RC holes were drilled for a total of 4,620 meters (refer to section 4.3 for more details). Development costs, associated with San Jorge, increased from the first quarter. The primary reason was the cash payment of $0.3 million and 333,333 common shares issued, at CA$2.25 per share (total value $0.7 million) in connection with the San Jorge option agreement. The Company also assumed a future income tax liability of $0.5 million associated with these payments. Engineering & infrastructure development costs also increased as a result of the pre-feasibility study work being undertaken.

Interest income dropped slightly from previous quarters as a result of the lower average cash balances. Stock-based compensation was slightly higher as a result a full quarter of compensation expense from the options granted in the February 2007.

The net loss for the quarter was $1.6 million versus $1.4 million for the first quarter principally as a result of the increased exploration activities.

4.1 Exploration Expenditures



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Table 2: Exploration
expenditures ($000's) Q106 Q206 Q306 Q406 Q107 Q207
--------------------------------------------------------------------------
Exploration expenditures
- by type
Administration costs $ 73 $ 68 $ 261 $ 237 $ 108 $ 192
Consulting, labour &
professional fees 126 155 164 263 337 328
Drilling & trenching costs - 18 621 327 13 270
Property investigations 88 111 89 491 275 216
Property acquisition costs 430 161 121 398 469 323
Travel & accommodation 20 32 48 53 27 43
--------------------------------------------------------------------------
Total 737 545 1,304 1,769 1,229 1,372
--------------------------------------------------------------------------
Exploration expenditures -
by project
Barreal Seco 477 150 815 808 808 593
Gloria - 142 9 400 36 340
Chile - General 143 92 299 231 171 282
Cordero - Sanson 24 116 150 232 120 36
Mexico - General 93 45 31 98 94 121
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Total 737 545 1,304 1,769 1,229 1,372
--------------------------------------------------------------------------
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Exploration expenditures were up on the first quarter as a result of the delineation drill program at Barreal Seco, these costs were offset by lower property acquisition costs. The first quarter included property option payments on Barreal Seco and Cordero-Sanson, while the second quarter only had the option payment for Gloria. The option payment on Gloria resulted in a significant increase in Gloria expenditures for the quarter which was offset by a decrease in Barreal Seco spending compared with the first quarter.

4.2 Development expenditures (San Jorge)

As at June 30, 2007, the Company was only capitalizing costs associated with its development project San Jorge and therefore all development expenditures, at this time, relate to San Jorge. On August 9, 2006 the Company entered into an option agreement to purchase San Jorge. For full terms of the agreement, reference should be made to the Company's MD&A for the year ended December 31, 2006.

As noted in the overview section, the passing of Provincial legislation prohibiting the use of toxic chemicals, including sulphuric acid, in mining activities in the Province of Mendoza (the "Province") could have a significant bearing on the development of San Jorge. The Company believes that this legislation is unconstitutional and has filed an action against the Provincial Government of Mendoza ("Government) in attempt to protect its rights to develop San Jorge (refer to the Company's News Release dated July 23, 2007). The Company was one of twelve companies that filed an action against the Government prior to the filing deadline.

With both the Provincial and Federal elections incurring in October 2007, it is unlikely that there will be any significant developments before the elections. The Company is continuing its liaison and discussions with the Province and all other interested parties to ensure that a timely resolution can be found to the current situation. In addition, the Government is working on producing an environmental plan for the entire province which, if implemented, is expected to establish a framework for environmental protection and community consultation sufficient to allow San Jorge to proceed, subject to the receipt of necessary operating permits. In anticipation of this, the Company's intention is to continue with its evaluation of San Jorge and complete its pre-feasibility study.

Notwithstanding, there can be no assurance that the recently passed legislation or the provincial environmental plan will be implemented in a form which will allow San Jorge to be permitted.

The following table summarizes the quarter by quarter expenditures and indicates the life to date ("LTD") expenditure on the project.



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Table 3: Development
expenditures - by type
($000's) Q306 Q406 Q107 Q207 YTD LTD
--------------------------------------------------------------------------

Engineering & Infrastructure - - $ 27 $ 727 $ 754 $ 754
Environmental - 2 4 100 104 106

General & administration 121 470 540 568 1,108 1,699

Geology - 762 87 228 315 1,077
Metallurgy - - 48 175 223 223
Mining - - - 32 32 32
Property acquisition cost 2,669 - - 1,506 1,506 4,175
Costs capitalized $(2,790)$(1,234) $(706)$(3,336)$(4,042)$(8,066)
--------------------------------------------------------------------------


Development expenditures on San Jorge increased from the first quarter principally as a result of property acquisition costs and development spend on engineering and infrastructure activities and geology costs. The property option agreement with Global Copper, required the cash payment of $0.3 million and the issuance of 333,333 common shares. The common shares were issued for a total value of $0.7 million at a cost of CA$2.25 per share. Included within the property acquisition costs, was the recognition of a future income tax liability, for $0.5 million, for the value of the common shares issued and the cash payment.

Engineering and infrastructure costs increased as the Company engaged Ausenco to assist it in the preparation of the pre-feasibility study for San Jorge. Engineering and infrastructure costs also included hydrological drilling costs. Environmental costs also increased as the Company worked on the preparation of both its environmental base line and environmental impact studies.

4.3 Barreal Seco, Chile

Barreal Seco is located on the boundary of Region II and Region III, in Chile, with the satellite properties (Salvadora and Celeste) in the northern part of Region III in Chile. The following table summarizes the quarter by quarter expenditure and indicates the life to date expenditure on the project.



--------------------------------------------------------------------------
Table 4: Barreal Seco
($000's) Q106 Q206 Q306 Q406 Q107 Q207 YTD LTD
--------------------------------------------------------------------------
Administration costs $ 4 $ 3 $ 6 $ 36 $ 9 $ 21 $ 30 $ 79
Consulting, labour &
professional fees - 55 47 137 196 120 316 555
Drilling & trenching - 18 617 292 13 245 258 1,185
Property investigations 40 67 58 264 221 180 401 830
Property option payments 430 - 58 50 361 10 371 909
Travel & accommodation 3 7 29 29 8 17 25 93
Total Exploration Costs $ 477 $ 150 $ 815 $ 808 $ 808 $ 593 $1,401 $3,651
--------------------------------------------------------------------------


Exploration costs on Barreal Seco and satellites were lower in the second quarter due to the property option payment that was made in the first quarter of 2007. Drilling and trenching costs increased in the second quarter with the delineation drill program, located to the northwest of the Barreal Seco property. The Company drilled 23 reverse circulation (RC) holes for 4,620 meters as part of this program. As at quarter end the final assay results are pending. The drill rig has been moved onto the Salvadora and Celeste properties for further drill programs that are scheduled for the third quarter. Property investigations costs were lower than the first quarter, as the first quarter included the payment of annual mining rights for the current year and for prior years that were in arrears.

4.4 Other Exploration, Chile

The following table summarizes the quarter by quarter expenditures and the life to date expenditure on the Company's other exploration properties in Chile. The costs associated with the Gloria project are also incorporated in the following table.



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Table 5: Other Exploration
Chile ($000's) Q106 Q206 Q306 Q406 Q107 Q207 YTD LTD
--------------------------------------------------------------------------
Administration costs $ 32 $ 45 $ 228 $ 161 $ 70 $ 148 $ 218 $ 724
Consulting, labour &
professional fees 92 51 64 61 87 126 213 711
Drilling & trenching - - - - - - - 36
Property investigations 12 19 9 53 23 23 46 234
Property option payments - 111 - 347 20 313 333 791
Travel & accommodation 6 8 6 8 7 12 19 74
Total exploration costs $ 142 $ 234 $ 307 $ 630 $ 207 $ 622 $ 829 $2,570
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Exploration costs on other exploration properties in Chile (including Gloria) were increased from the first quarter as a result of a property option payment on the Gloria property.

4.5 Exploration, Mexico

The following table summarizes the quarter by quarter expenditures and the life to date expenditure on exploration properties in Mexico. This table includes the costs associated with the Cordero-Sanson project.



--------------------------------------------------------------------------
Table 6: Exploration,
Mexico ($000's) Q106 Q206 Q306 Q406 Q107 Q207 YTD LTD
--------------------------------------------------------------------------
Administration costs $ 37 $ 20 $ 26 $ 42 $ 29 $ 23 $ 52 $ 243
Consulting, labour &
professional fess 33 50 53 65 54 82 136 408
Drilling & trenching - - 4 34 - 25 25 63
Property investigations 36 25 22 174 31 13 44 334
Property option payments - 50 63 - 88 - 88 206
Travel & accommodation 11 16 13 16 12 14 26 84
Total exploration costs $ 117 $ 161 $ 181 $ 330 $ 214 $ 157 $ 371 $1,338
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The decrease in exploration spending in Mexico from the first quarter can be explained by the property option payment that occurred in the first quarter of 2007.

5. Discussion of Cashflow

For the quarter ended June 30, 2007, cash outflow from operations, after non-cash working capital movements, was $1.4 million (Q2 2006: $0.6m) which is consistent with the loss for the period coupled with a $0.2 million inflow from non-cash working capital items. Cash outflow from financing was $0.1 million as a result of payments being made for deferred financing costs associated with the IPO prior to the receipt of the proceeds on July 10, 2007. Cash outflow from investing activities was $1.4 million (Q2 2006: $0.0m) which were comprised of deferred development costs of $1.3 million.

During the first quarter the Company had an unrealized gain on holding Canadian dollars (against the reporting currency of the U.S. dollar) and has recognized a $0.5 million increase in cash in the statement of cash flows under the heading "Effect of exchange rate changes on cash".

For the six months ended June 30, 2007, cash outflow from operations, after non-cash working capital movements, was $3.1 million (2006: 1.4 million) which is consistent with the loss for the period. Payments for deferred finance fees have resulted in a net outflow from financing activities which will be offset by the proceeds from the IPO in the third quarter. Cash outflow from investing activities was $2.5 million for the six months ended June 30, 2006 as the Company continues to invest in San Jorge.

As of June 30, 2007, the Company had $4.9 million (December 31, 2006: $10.1m) in cash and cash equivalents.

As of July 31, 2007, the Company had cash and cash equivalents of $15.3 million.

6. Discussion of Financial Position and Liquidity

6.1 Assets

The following table comprises the total assets of the Company as at June 30, 2007 and December 31, 2006.



--------------------------------------------------------------------------
Table 7: Assets ($000's) Dec 31, 2006 Jun 30, 2007
--------------------------------------------------------------------------
Cash and cash equivalents $ 10,074 $ 4,909
AR and prepaids 266 195
Deferred financing fees - 529
---------------------------
Total current assets 10,340 5,633
Property, plant & equipment 672 760
Mineral property interests 4,024 8,066
Other assets 44 30
---------------------------
Total non-current assets 4,740 8,856
--------------------------------------------------------------------------
Total Assets $ 15,080 $ 14,489
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Accounts receivable and prepaids were $0.2 million (December 31, 2006: $0.3m) with the main component relating to interest accrued on short term deposits and Value-Added Taxes (VAT) in Mexico. Deferred financing costs represent costs incurred in preparing the Company's preliminary prospectus and working towards its listing on the TSX, which was completed on July 10, 2007. Property, plant and equipment have increased from year end, due to capital outlays at San Jorge.

Mineral property interests were $8.1 million by June 30, 2007 (December 31, 2006: $4.0m), as the Company continued to capitalize its development spend at San Jorge, refer to section 4.2 for more details.

6.2 Liabilities and Equity

The following table summarizes the liabilities and equity of the Company as at June 30, 2007 and December 31, 2006.



--------------------------------------------------------------------------
Table 8: Liabilities and Equity ($000's) Dec 31, 2006 Jun 30, 2007
--------------------------------------------------------------------------
AP and accruals $ 1,591 $ 2,154
Future income tax liability 406 934
Total liabilities 1,997 3,088

Common shares 18,417 19,096
Contributed surplus 126 302
Accumulated other comprehensive income 150 665

Total equity accounts 18,693 20,063
Deficit (5,610) (8,662)

Total Equity 13,083 11,401
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Total Liabilities and Equity $ 15,080 $ 14,489
--------------------------------------------------------------------------


The increase in accounts payable and accruals is a result of the accrual for costs associated with the drill programs at Barreal Seco and San Jorge coupled with the accrual for deferred finance costs associated with the Company's IPO.

The liability for future income taxes has increased due to the cash payment and deemed value of shares issued to Global Copper for San Jorge. These share issuances and payments have no tax base and therefore it is necessary that the Company recognizes a future income tax liability associated with these option payments.

The increase in contributed surplus is due to the accounting costs recorded for stock-based compensation for the second quarter of 2007. The movement in accumulated other comprehensive loss is due to foreign exchange movements between the Canadian dollar and the United States reporting currency. For the first six months of 2007 the Company has recorded gains of $0.5 million from its Canadian dollar cash holdings.



Consolidated Balance Sheet
As at June 30, 2007 and December 31, 2006
(Unaudited)
(expressed in thousands of U.S. dollars, except where indicated)

2007 2006
$ $

Assets
Current assets
Cash and cash equivalents 4,909 10,074
Accounts receivable and prepaid expenses 195 266
Deferred financing costs 529 -
------ ------
5,633 10,340
------ ------

Property, plant and equipment (note 5) 760 672
Mineral property interests (note 6) 8,066 4,024
Other assets 30 44
------ ------
14,489 15,080
------ ------
------ ------

Liabilities
Current liabilities
Accounts payable and accrued liabilities 2,154 1,591
------ ------
2,154 1,591

Future income tax liability 934 406
------ ------
3,088 1,997

Shareholders' Equity
Equity accounts (note 7) 19,398 18,543
Accumulated other comprehensive income (loss) (note 9) 665 150
Retained deficit (8,662) (5,610)
------ ------
11,401 13,083
------ ------
14,489 15,080
------ ------
------ ------


Consolidated Statements of Loss and Deficit
For the three and six month ended June 30, 2007 and 2006
(Unaudited)
(expressed in thousands of U.S. dollars, except where indicated)

Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Expenditures $ $ $ $

Net Exploration and
Development Expenditures
(note 4) 1,372 545 2,601 1,282

Other Expenses (Income)
Corporate costs 242 111 451 196
Depreciation and amortization 17 11 34 22
Interest income (72) (42) (153) (82)
Other expenses (2) 29 (2) 47
Stock-based compensation 66 30 121 43
--------- --------- --------- ---------
251 139 451 226

Loss for the period 1,623 684 3,052 1,508
--------- --------- --------- ---------
--------- --------- --------- ---------

Deficit - beginning of period 7,039 1,564 5,610 740
Deficit - end of period 8,662 2,248 8,662 2,248
--------- --------- --------- ---------
--------- --------- --------- ---------

Basic and diluted loss per
share $ 0.05 $ 0.03 $ 0.10 $ 0.07

Weighted average shares
outstanding (000's) 29,990 20,387 29,894 20,198


Consolidated Statements of Exploration and Development Exploration
For the three and six month ended June 30, 2007 and 2006
(Unaudited)
(expressed in thousands of U.S. dollars, except where indicated)

Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
Expenditures $ $ $ $

Exploration Expenditures (note 4)
Administration costs 192 68 300 141
Consulting, labour & professional fees 328 155 665 281
Drilling & trenching costs 270 18 283 18
Property investigations 216 111 491 199
Property acquisition costs 323 161 792 591
Travel & accommodation 43 32 70 52
------ ------ ------ ------
1,372 545 2,601 1,282
------ ------ ------ ------
Development Expenditures (note 6)
Engineering & infrastructure 727 - 754 -
Environmental 100 - 104 -
General & administration 568 - 1,108 -
Geology 228 - 315 -
Metallurgy 175 - 223 -
Mining 32 - 32 -
Property acquisition costs 1,506 - 1,506 -
------ ------ ------ ------
3,336 - 4,042 -
------ ------ ------ ------

Total Exploration & Development
Expenditures 4,708 545 6,643 1,282

Costs Capitalized (3,336) - (4,042) -
------ ------ ------ ------

Net Exploration & Development
Expenditures 1,372 545 2,601 1,282
------ ------ ------ ------
------ ------ ------ ------


Consolidated Statements of Comprehensive Losses
For the three and six month ended June 30, 2007 and 2006
(Unaudited)
(expressed in thousands of U.S. dollars, except where indicated)



Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
$ $ $ $

Loss for the period 1,623 684 3,052 1,508
------- ------- ------- -------
------- ------- ------- -------

Other Comprehensive Loss (Income)
Net loss (gain) on translation to
reporting currency (485) (167) (515) (164)

------- ------- ------- -------
Comprehensive Loss 1,138 517 2,537 1,344
------- ------- ------- -------
------- ------- ------- -------


Consolidated Statements of Cash Flows
For the three and six month ended June 30, 2007 and 2006
(Unaudited)
(expressed in thousands of U.S. dollars, except where indicated)

Three Three Six Six
months months months months
ended ended ended ended
June 30, June 30, June 30, June 30,
2007 2006 2007 2006
$ $ $ $

Cash flows from operating activities
Net loss for the period (1,623) (684) (3,052) (1,508)
Items not affecting cash
Depreciation and amortization 17 11 34 22
Stock-based compensation 66 30 121 43
------ ------ ------ ------
(1,540) (643) (2,897) (1,443)

Change in non-cash operating working
capital
Increase in accounts receivable and
prepaid expenses 111 17 71 (48)
Increase in accounts payable and
accrued liabilities 56 46 (263) 80
------ ------ ------ ------
(1,373) (580) (3,089) (1,411)
------ ------ ------ ------

Cash flows from financing activities
Issuance of common shares (net of
issue costs) (53) 246 (141) 300
------ ------ ------ ------
(53) 246 (141) 300
------ ------ ------ ------

Cash flows from investing activities
Property, plant and equipment (86) (3) (108) (13)
Deferred development costs (1,314) - (2,342) -
------ ------ ------ ------
(1,400) (3) (2,450) (13)
------ ------ ------ ------

Effect of exchange rate changes on
cash 485 167 515 164

Increase (decrease) in cash and cash
equivalents (2,341) (170) (5,165) (960)

Cash and cash equivalents - Beginning
of period 7,250 4,588 10,074 5,378
------ ------ ------ ------

Cash and cash equivalents - End of
period 4,909 4,418 4,909 4,418
------ ------ ------ ------
------ ------ ------ ------


This news release is not intended for and should not be disseminated to or read by any resident of the United States or any U.S. person. The offered securities have not been and will not be registered under the United States Securities Act of 1933, as amended (the "U.S. Securities Act") and may not be offered or sold within the United States or to or for the account or benefit of U.S. persons, except in certain transactions exempt from the registration requirements of the U.S. Securities Act and all applicable state securities laws.

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, Price Edward Island and Newfoundland and Labrador.

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