Coronet Reports Sale of Coronet Metals US Inc.
Vancouver, British Columbia--(Newsfile Corp. - March 3, 2015) - Theo van der Linde, President of Coronet Metals Inc. (TSXV: CRF) (FWB: 2CM) (OTCQX: CORMF) (“Coronet” or the “Company”) announces:
Sale of Coronet Metals US Inc (“Coronet USA”):
The Company has agreed to sell 100% of its wholly owned Nevada subsidiary, Coronet Metals US Inc., to Pashleth Investment ltd., a company owned by Joel Dumaresq, a Director of the Company for: a) twenty thousand (US$20,000) dollars (US) (paid); b) assumption of Liberty Processing Facility Lease payments of twenty thousand US$20,000 dollars US funds per month starting March 1st, 2015 for the 24 months (US$480,000); c) assumption of all financial liabilities of Coronet USA totaling CAD$653,000; d) assumption of environmental clean-up obligations, according to the Lease, including the safe disposal of all unused, partially used and used residual chemicals (cost not determined); e) an undertaking to provide copies of all government regulatory agencies final approvals of all clean-up activities (cost not determined); and f) a full and complete indemnity against any and all financial and environmental obligations of the Company, known and unknown, now or arising in the future relating to activities of the Company up to the date hereof (cost not determined). The Company is relinquishing an intercorporate shareholder loan owed by Coronet USA. in the amount of CAD$3,030,948. The Company previously recorded a write down of the Liberty Property, Plant and Equipment of CAD$2.2million in the quarter ending December 31, 2014 in respect of Coronet USA. The disposition is subject to regulatory approval.
During the commissioning phase of the Liberty Processing Facility, the Company was unable to achieve commercial recovery of gold from the feed material. The Company suspended operations in April 2014 to preserve cash and then evaluated other options for the project, including alternative sources of feed material, partnering with operating mines or a sale of the Lease and operating agreement. Funding of the ongoing commitments to preserve the asset was provided by loans from Directors. On October 27, 2014 Coronet completed a share purchase agreement to sell a 50% operational interest in Coronet Metals US Inc. which operates the Liberty Precious Metals Processing Facility to First Liberty Power Corp. (“FLPC”) for US $200,000. The planned use of the sale proceeds was to pay accounts payable, fund ongoing operational costs associated with Coronet US , return the facility to full operational status and process feed material from FLPC’s projects. FLPC failed to meet purchase price obligations as required by the share purchase agreement, requiring the Company to seek alternative funding to maintain the lease in good standing. On January 13, 2015 Coronet formally terminated the FPLC agreement. Upon the collapse of the FLPC deal, management determined that it had exhausted its options to salvage the Liberty Liberty Processing Facility as a viable business and that there was no alternative but to divest Coronet US in order to enable the continuation of the Company.
Through the divestiture of Coronet US, the Company benefits from a strengthened balance sheet and reduced financial obligations allowing it to attract fresh investment capital and to continue as a going concern.
About Coronet Metals Inc.:
Coronet Metals Inc. Management is currently focusing the Company on advancement of its White Caps Gold Project near Manhattan, Nevada.
Theo van der Linde,
President
FOR FURTHER INFORMATION AND ENQUIRIES CONTACT:
Theo van der Linde, President and CFO
Tel: +1 902 403 7258
Email: tvanderlinde@coronetmetals.com
Web: www.coronetmetals.com