Zaruma Resources Announces Completion of Financing

TORONTO, July 27, 2011 /CNW/ --
TORONTO, July 27, 2011 /CNW/ - Zaruma Resources Inc. (TSXV-ZMR.H), (the
'Company') today announced that it has completed the previously announced US$25
million equity financing and US$30 million debt financing. Funds have
been released from escrow, Mexican court approved agreements have ended
the litigation with various creditors in Mexico, and the necessary
filings were made in certain courts and registries in Mexico that will
result in the removal of existing liens on the Company's mining
concessions. The Company has issued 488,649,998 common shares and
488,649,998 warrants permitting the holder to acquire the same number
of common shares at a price of C$0.10 for a period of two years as part
of the equity financing.

In exchange for the cancellation of all agreements between the Company
and Glencore International AG and certain of its affiliates, the
Company issued 21,500,600 common shares and 21,500,600 warrants
permitting the holder to acquire the same number of common shares at a
price of C$0.10 for a period of two years.

Gravity Ltd. provided bridge financing to the Company, and converted its
C$800,000 Convertible Promissory Note issued by the Company and
C$83,047 in accrued interest to 17,660,940 common shares of the
Company.

Zaruma Gold Mining Ltd. ('ZGML') subscribed for US$20 million of the equity financing, with a
commitment that the funds be used for the completion of the Luz del
Cobre Copper Project. ZGML together with its affiliate, Kirkland
Intertrade Corp. ('Kirkland') has aggregate ownership of 405,533,980 common shares, representing
approximately 62% of the issued and outstanding common shares of the
Company on an undiluted basis (or 811,067,960 common shares or
approximately 77% on a partially diluted basis assuming exercise of all
warrants held by ZGML and Kirkland only). ZGML's subscription was
approved by the shareholders at a Special Meeting of Shareholders held
on December 29, 2010.

In accordance with the resolution passed by the shareholders on July 18,
2011, the number of directors was increased from five to seven, and on
the completion of the financing, Mr. Maxim Finskiy and Dr. Geoffrey
Cowley were elected to fill the vacancies. Dr. Peter Lorange retired as
a director of the Company, and the directors appointed Mr. Francis
Scola to fill the vacancy. Personal information and the details of the
principal occupation of the new directors are set out in the Management
Information Circular dated June 16, 2011 and sent to the Company's
shareholders in connection with the July 18, 2011 meeting of
shareholders. At this time the Board wishes to express its thanks to
Dr. Lorange for more than ten years' service as a director during the
Company's formative years.

Under a shareholder rights agreement (the 'Shareholder Rights Agreement') effective as of July 15, 2011 between the Company and ZGML, ZGML is
entitled to appoint the majority of the directors (so long as it holds
at least 50% of the issued and outstanding common shares of the
Company). Such number of directors as is equal to its percentage
shareholding in the Company (if it holds less than 50% of the issued
and outstanding common shares of the Company). In addition, the
Shareholder Rights Agreement provides ZGML with pre-emptive rights with
respect to certain potential future issuances of certain securities by
the Company, until such time as ZGML and its respective affiliates
exercise control or direction over less than 19.9% of the issued and
outstanding common shares of the Company on an undiluted basis.

Deutsche Bank AG, London Branch (the 'Bank'), acting as Agent provided US$30 million in debt financing, with the
proceeds dedicated to completion of the Luz del Cobre Copper Project,
including the settlements with creditors. The Loan accrues interest at
10% without payment for the first nine months, then amortizes over a 48
month period. US$5 million is held in a Performance Reserve Account,
with US$3 million to be released when the copper production reaches
1500 tonnes over three consecutive months, approximately 80% of design
capacity of the copper recovery plant. The remaining US$2 million will
be held until two months prior to the end of the amortization period.

The Company entered into a Copper Collar Swap Transaction with the Bank
for 190 tonnes per month for 48 months (approximately 30% of projected
production) whereby if the average price of copper for the month is
below US$4500 per tonne, the Bank will pay the Company the difference,
and if the price exceeds US$9525 per tonne the Company will pay the
Bank the excess over US$9525 for the 190 tonnes per month. The Company
also entered into a Copper Call Option Agreement whereby the Bank will
have a call on 150 tonnes per month for 48 months at a price of
US$10,100 per tonne.

Security arrangements have been put in place with respect to the new
debt financing, including a new first lien on the mining concessions
and the fixed assets in Mexico and a pledge of the shares of Minerales
Libertad, S.A. de C.V. ('ML'), the Company's wholly owned subsidiary in Mexico. ML proposes to put
the Luz del Cobre Copper Project into production as early as the first
quarter of 2012. Staffing of the Project is in process, with senior
positions being filled in August; the planning of the remaining
development and construction work is well advanced.

Final Approval of the listing of the Company as a Tier 1 Mining Issuer
on the TSX Venture Exchange is subject to the satisfaction of certain
conditions stipulated by the Exchange. A Filing Statement which
discloses Material Facts related to the Company, including the effect
of the current Financing on the Company's Balance Sheet on a Pro Forma
basis, as well as the Loan Agreement with the Bank will be filed on
SEDAR today.

The 652,320,285 common shares of the Company currently outstanding are
subject to a trading halt and will remain halted pending the listing
approval by the TSX Venture Exchange.

Zaruma Resources Inc. is a pre-production stage company listed on the
TSX-V NEX Board (symbol ZMR.H) and the Frankfurt Stock Exchange
(symbol: ZMR).

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

Forward Looking Information

This News Release contains forward-looking statements which are
typically preceded by, followed by or including the words 'believes',
'expects', 'anticipates', 'estimates', 'intends', 'plans' or similar
expressions. Forward-looking statements and information involve known
and unknown risks, uncertainties and other factors that may cause
actual results to differ materially from those expressed or implied in
the forward-looking statements and information. Risks and uncertainties
that may cause actual results to vary include but are not limited to:
uncertainties relating to the financing needed to put Luz del Cobre
into production; the costs of commencing production varying
significantly from estimates, delays in commercial production from Luz
del Cobre; unexpected geological conditions; operational and technical
difficulties, including the failure of major mining and processing
equipment; the ability of the Company to service its debt facilities;
fluctuations in copper and other commodity prices, the existence of
undetected or unregistered interests or claims over the property of the
Company; operating performance of facilities; environmental and safety
risks, including increased regulatory burdens, seismic activity,
weather and other natural phenomena; inability to, or delays in,
obtaining renewal of necessary permits and approvals from government
authorities; risks relating to labour; changes to and compliance with
applicable laws and regulations, including environmental laws ;
political, economic and other risks arising from the Company's
activities in Mexico; fluctuations in foreign exchange rates, as well
as other risks and uncertainties.

Any forward-looking statement speaks only as of the date on which it is
made and, except as may be required by applicable laws, the Company
disclaims any intent or obligation to update any forward-looking
statement, whether as a result of new information, future events or
results or otherwise. Although the Company believes that the
assumptions inherent in the forward-looking statements are reasonable,
forward-looking statements are not guarantees of future performance and
accordingly undue reliance should not be put on such statements due to
the inherent uncertainty therein.

To view this news release in HTML formatting, please use the following URL: http://www.newswire.ca/en/releases/archive/July2011/27/c7848.html