Cyprium Mining Corporation
TSX VENTURE : CUG
TSX VENTURE : CUG.DB

Cyprium Mining Corporation

October 01, 2014 10:30 ET

Cyprium Mining Secures 100 Metric Tons Per Day Flotation Plant Outside Chihuahua, Mexico

MONTREAL, QUEBEC--(Marketwired - Oct. 1, 2014) - Cyprium Mining Corporation (TSX VENTURE:CUG)(TSX VENTURE:CUG.DB) -

  • Highlights of the transaction:
    • Exclusive use of the mill for five years
    • 100 metric tons per day capacity with opportunity to double capacity
    • Operational control to be performed by Cyprium
    • Pilot/pre-production operations for Las Cristinas project
  • Financial advantages of the transaction:
    • Short-term path to cash flow through toll milling
    • Minimal investment required to double capacity
    • Production facility will be available for mine start-up and production of the Las Cristinas project without significant CAPEX

Cyprium Mining Corporation ("Cyprium" or the "Company") is pleased to announce that, through its wholly-owned Mexican subsidiary Cypriumex S.A. de C.V., it has secured the exclusive use of a 100 metric tons per day flotation plant located outside the City of Chihuahua in Northern Mexico. The plant will immediately be used by Cyprium to offer toll milling services to local miners in the area. The plant will eventually be used by Cyprium for its own use once the Company's Las Cristinas project goes into production.

"When André - the Company`s President and CEO - and I co-founded Cyprium in 2012, we focused our business plan on generating revenues in the short-term, keeping CAPEX at a minimum and acquiring mining projects in Northern Mexico which have large exploration potential," said Alain Lambert, Chairman of Cyprium. "While the drilling results announced yesterday confirm the exploration potential of the copper/silver Las Cristinas project, today's announcement clearly puts us on the path for cash flow in the short term. By securing access to a production plant we have the opportunity to immediately start offering toll milling services to local miners while at the same time providing an avenue for the eventual production from our Las Cristinas mining operations."

"While the Company's plan remains to build a production facility at the Las Cristinas property in 2015, the agreement announced today will allow us to continue to advance our Las Cristinas project without having to plan large investment in CAPEX for a processing plant," said Andre St Michel, President and C.E.O.

The five year agreement provides for Cyprium to use the plant on a variable cost basis as it will pay the owner of the plant a pre-determined tolling charge based on metric tons milled. Cyprium will also be responsible for the supervision of all metallurgic processes, including quantitative chemical analysis, assaying of samples and determining feed grades.

Chihuahua State is a vibrant mining jurisdiction with several small operating mines. Having access to one of the few mills in the area, Cyprium is uniquely positioned to leverage its management's long experience in milling operations. The Company intends to start immediately to offer milling services to miners in Northern Mexico. Any profits from milling operations will, consistent with the Company's business plan, be reinvested in the development of the Las Cristinas property, including building its own processing facility at the mine site in the second half of 2015.

Mr. Lambert concluded: "We have now achieved a major milestone in the development of Cyprium's business. Having access to a processing facility without the need to build or to make major investments not only will help minimize the dilution of our shareholders but it will provide us with the ability to start generating revenues even before Las Cristinas comes into production."

As of February 2015, in order to maintain its exclusivity, Cyprium shall supply the plant a minimum of 1,000 metric ton of ore milled per month or make payments representing such level of monthly operations. As of 2015, Cyprium shall have the obligation to make investments of a minimum of US $100,000 per year over four years with a view of doubling the capacity of the plant to 200 tons per day. Cyprium has the option to make investments to double the capacity quicker than over the four year period. These investments will include additional equipment and their installation costs ("Capital Investments") as well as investments to optimize production, obtain full permitting, the costs to ensure sufficient water and energy supply as well as the costs to repair and/or repair existing equipment ("Optimization and Other Costs"). Cyprium granted the owner of the plant an option to purchase the Capital Investment. Cyprium shall remain the owner of all Capital Investments made at the plant until the plant owner has paid Cyprium in full for the costs of the Capital Investments. The plant owner shall also have the obligation to pay back Cyprium for the Optimization and Other Costs on a per metric ton basis.

About Cyprium Mining Corporation

We operate solely in Northern Mexico where our senior management team resides. We only look for projects that have a potential for profitable production in the short-term and a large exploration potential. Cyprium is committed to maximizing the potential of projects by funding exploration programs mainly through cash flows generated by production instead of funding such programs strictly through equity offering thus limiting shareholder dilution. Cyprium prioritizes projects which are easily accessible and close to large urban centers. Cyprium, through its wholly-owned subsidiary Cypriumex S.A. de C.V. provides tolling services to miners located in the state of Chihuahua, Mexico. Cyprium also owns 51% of Coyame Copper SA de CV ("Coyame Copper"), a Chihuahua, Mexico based mining exploration company and has an option to increase its stake in Coyame Copper to 70% for a consideration of US $1.2 million payable over a period of eighteen months following the exercise of the option. Coyame Copper's Las Cristinas Project consist of four adjacent exploration concessions (Las Cristinas, La Parrita, La Verde and La Lagrimosa) covering 684 hectares. Coyame Copper also owns production assets located outside the town of Coyame, Mexico.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

The geological information of this release was verified by Jacques Marchand, P.Eng. P.Geo, and an independent Qualified Person.

This news release contains "forward-looking information" (within the meaning of applicable Canadian securities laws) and "forward -looking statements" (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995). Such statements or information are identified with words such as "anticipate", "believe", "expect", "plan", "intend", "potential", "estimate", "propose", "project", "outlook", "foresee" or similar words suggesting future outcomes or statements regarding an outlook. Such statements include, among others, those concerning the Company's anticipated plans for developments of the Company and its mining projects".

Such forward-looking information or statements are based on a number of risks, uncertainties and assumptions which may cause actual results or other expectations to differ materially from those anticipated and which may prove to be incorrect. Assumptions have been made regarding, among other things, management's expectations regarding future growth, plans for and completion of projects by Company's third party relationships, availability of capital, and the necessity to incur capital and other expenditures. Actual results could differ materially due to a number of factors, including, without limitation, operational risks in the completion of Company's anticipated projects, delays or changes in plans with respect to the development of Company's anticipated projects by Company's third party relationships, risks affecting the ability to develop projects, risks inherent in operating in foreign jurisdictions, the ability to attract key personnel, and the inability to raise additional capital. No assurances can be given that the efforts by the Company will be successful. Additional assumptions and risks are set out in detail in the Company's MD&A, available on SEDAR at www.sedar.com.

Although the Company believes that the expectations reflected in the forward-looking information or statements are reasonable, prospective investors in the Company's securities should not place undue reliance on forward-looking statements because the Company can provide no assurance that such expectations will prove to be correct. Forward-looking information and statements contained in this news release are as of the date of this news release and the Company assumes no obligation to update or revise this forward-looking information and statements except as required by law. Investors should note that the Las Cristinas property has no established mineral resources or mineral reserves as defined by NI 43-101. Although Cyprium Mining has made an initial production decision based on historical production records and the results of the recent sampling, a feasibility study has not been completed and there is no certainty that the proposed operation will be economically or technically viable. The completion of each phase of drilling is contingent on the successful completion of the previous one.

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