Coronet Metals Inc.

Coronet Metals Inc.

October 10, 2012 09:30 ET

Coronet Metals Inc. to Acquire Control of Manhattan, Nevada Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Oct. 10, 2012) - Coronet Metals Inc. ("Coronet") (TSX VENTURE:CRF)(OTCQX:CORMF)(FRANKFURT:2CM) is pleased to announce that it has entered into an agreement with White Caps Gold Mining, Inc. ("WCGM") whereby Coronet will control the Manhattan Gold Project in Nye County, Nevada. Under the agreement, Coronet will acquire at least 97% of the shares of WCGM. WCGM owns the Manhattan Mill, patented and unpatented mining and millsite claims, gold-bearing tailings and dumps located in the historic Manhattan Mining District, near Manhattan in south-central Nevada. Closing is expected within 60 days, subject to TSX Venture Exchange approval.

Manhattan Gold Project

Coronet believes that the Manhattan District has been largely overlooked, in part because of historically complex land ownership. The Company believes there is excellent exploration potential in the Manhattan Mining District, a past producing area with many under-explored areas within the district.

There are historical references indicating up to 250,000 tonnes of tailings piles and mine dumps on WCGM property. Coronet believes these tailings piles and mine dumps might be economically re-processed. (These references are not NI 43-101 compliant and should not be relied on).

The Manhattan Mill has been operated by New Concept Mining and Western Mine Development from 1996-2001 treating tailings piles, mine dumps, and other gold ores. Coronet intends to fully evaluate remaining gold-bearing tailings and mine dumps on the property and is seeking to secure additional mill feed from the Manhattan District.

Coronet's management team has extensive experience in permitting, mine development and operations in Nevada.

Mr. Theo van der Linde, President and CFO of Coronet states, "The Manhattan Mining District offers a great opportunity for Coronet in one of the few remaining, underdeveloped gold districts in Nevada. We expect this acquisition will enable Coronet to commence gold production and start to generate cash flow to explore the Manhattan District. Nevada continues to welcome gold exploration and mining, and was recently ranked as the 2nd most 'Mining Friendly Jurisdiction in the World' by the Fraser Institute in 2011."

Details of Agreement

  • Coronet will purchase 50% of the outstanding shares of WCGM for US$600,000 cash and 1.5 million shares of Coronet common stock. The Coronet shares will be subject to a four-month hold restriction. US$84,500 has been advanced to date.
  • Coronet will purchase a further 47% of the outstanding WCGM shares for cash (up to US$50,000) and Coronet common stock (up to 4.5 million). The Coronet shares will be subject to a four-month hold restriction.
  • Coronet will purchase certain additional rights, titles and interests in the Manhattan Mining District for US$100,000 from a WCGM shareholder.

After closing, WCGM will submit a Plan of Operations Permit Application to the appropriate Government agencies. Permitting is expected to take 9 to 16 months at an approximate cost of US$150,000. Once permitted, Coronet intends to refurbish the Manhattan Mill and build a new Class A tailings impoundment to reprocess gold-bearing tailings and mine dumps from prior operations.

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