Concerned Shareholders of Eco Oro Announce Opposition to Second Tranche Equity Financing and Request for Regulatory Intervention

TORONTO, Oct. 3, 2016 /CNW/ - A group of concerned shareholders (the "Concerned Shareholders") of Eco Oro Minerals Corp. (TSX: EOM) ("Eco Oro" or the "Company") announced today that they have voted, or will vote, against the Second Tranche common share financing as outlined in the Company's proxy circular dated September 13, 2016 (the "Circular"). The Concerned Shareholders, together with other shareholders who have expressed support for them, hold or represent approximately 19.18% of the issued and outstanding common shares of the Company, or approximately 39.22% of the shares entitled to vote at the Company's special meeting which is currently scheduled for October 13, 2016 (the "Meeting"). As a result, it is expected that the Second Tranche equity financing will be rejected at the Meeting.

The Concerned Shareholders also announced that they have requested that the applicable Canadian securities regulators require Eco Oro to comply with its legal requirements by, among other things, (i) amending the Circular so that it no longer contains misrepresentations and (ii) disclosing the terms of the CVR, which security may be issued by the Company if and when the Second Tranche equity financing is rejected by shareholders at the Meeting. The Concerned Shareholders have also asked the British Columbia Securities Commission to exercise its public interest discretion in a manner to ensure that all shareholders have a minimum of 30 days to review and consider the disclosure provided in an amendment to the Circular prior to the holding of the Meeting.

The Concerned Shareholders believe that management has acted in an unfair manner in allowing only certain insiders of the Company and other key shareholders as selected by management of the Company to participate (the "Participating Shareholders") in the proposed financing. The Concerned Shareholders also believe that the option provided to shareholders to approve the Second Tranche equity financing at the Meeting, or have the CVR issued, is not meant to be a choice at all and is highly coercive. The Company itself has described the CVR as containing "onerous terms and conditions" that will be imposed on shareholders if they do not approve the highly dilutive Second Tranche common share financing.

The Company's coercive conduct is further exacerbated by its failure to provide the disclosure which the Concerned Shareholders believe is required under applicable securities legislation. The following are but some examples of matters which have not been disclosed to the shareholders:

• The identities of the Participating Shareholders and their respective subscriptions. Management has stated that the identities of the Participating Shareholders will be disclosed "post-meeting".
  
  
• The terms of the CVR: This is troubling for several reasons, including that management has noted that the CVRs have a change of control trigger provision which requires the Company to repurchase the CVRs on a change of control. It is difficult to imagine how one would quantify this repurchase obligation.
  
  
• Management's participation in the arbitration proceeds or the CVRs: Based on discussions between management and certain shareholders, we believe that members of management are being compensated to ensure that they stay with the Company to complete the arbitration.

The Concerned Shareholders understand that there is significant risk in rejecting the Second Tranche equity financing, but we believe we have no choice but to take a strong position against management and the Company. We also reserve the right to pursue other courses of action in our attempt to hold management responsible for the coercive steps they have taken for their benefit and the benefit of key insiders of the Company. Nevertheless, the Concerned Shareholders are prepared to engage with management, on an informed basis, in order to resolve this matter on an amicable basis.

The Concerned Shareholders are not directly or indirectly seeking the power to act as a proxyholder for any shareholder of Eco Oro.

SOURCE Concerned Shareholders of Eco Oro Minerals Corp.