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Coronet and Argus Report the Sale and Purchase of the Yanamina Gold Project, Ancash Peru

VANCOUVER, BRITISH COLUMBIA -- (Marketwired) -- 06/16/14 -- Argus Metals Corp. ("Argus") (TSX VENTURE:AML) and Coronet Metals Inc. ("Coronet") (TSX VENTURE:CRF) announce that they have signed a definitive agreement whereby Argus will purchase the Yanamina Gold project from Coronet. On the close of this transaction Coronet will own 40% of Argus and have the right to maintain its ownership through any future financings by Argus. Further details of the transaction are found below.

Argus and its Peruvian staff have a history of negotiating and successfully implementing community agreements in Peru and elsewhere in Latin America. The management and board of Argus have a depth of experience in both fundraising and mine development and will be focusing all of the company's efforts on bringing the Yanamina project forward to production.

The Yanamina Project is located near Carez, Ancash Department, Peru and consists of five concessions totaling 924 ha in area. The Yanamina Project is situated 40 km north and 120 km south of Barrick Gold's Pierina (7.5 million ounces Au) and Alto Chicama/Laguna's Norte (9.1 million ounces Au), respectively.

The Yanamina Project

Yanamina is an advanced-stage project with a NI 43-101 compliant resource of 83,100 oz gold in the indicated category and 123,700 oz gold in the inferred category at a 0.5 g/t gold cutoff. In February 2011, a Preliminary Economic Assessment ("PEA") on the Yanamina Project was prepared for Coronet, and is summarized as follows:


--  Treating 4,802,000 tonnes of ore grading 1.34 g/t gold and 5.65 g/t
    silver with heap leach recoveries of 73% gold and 40% silver with
    projected production of 151,000 oz gold and 349,000 oz silver at a cash
    cost of US$ 257/eq oz gold over a five year mine life.  
--  Initial annual production of 41,000 oz gold and 95,000 oz silver with
    averages of 30,000 oz gold/year and 70,000 oz silver/year over the mine
    life.  
--  Capital expenditures (including working capital) estimated to be US$35.5
    million.  
--  At US$1,025/oz gold and $16.50/oz silver, the IRR is 50%, the NPV at a
    5% discount is US$40.5 million and the payback is 1.47 years from the
    start of operations.  
--  The PEA was based on a 5 year 1:1 stripping ratio open pit mine, a
    3,000t/d heap leach operation and a US$6.5 million reclamation and
    closure cost. 

An updated PEA study has been commissioned to be filed with the TSX Venture Exchange (TSXV) in conjunction with this transaction.

Purchase Terms

Argus will acquire the Yanamina Project by acquiring all of the shares of Coronet's wholly owned Peruvian subsidiary - Coronet Metals Peru S.A.C. ("Coronet Peru"). Under the terms of a Share Purchase Agreement, Argus has agreed, subject to the satisfaction of certain conditions precedent, to acquire all the shares of Coronet Peru in consideration of:


(a)   delivering to Coronet that quantity of common shares in the capital of
      Argus (the "Shares") as is equal to 40% of the issued and outstanding 
      common shares of Argus as of the closing date. As at today's date,    
      Argus has 7.9 million shares issued and outstanding so this would     
      amount to Argus issuing 5.3 million Shares to Coronet; and            
(b)   assuming Coronet's obligations under the original agreement whereby   
      Coronet acquired Coronet Peru, being an agreement dated December 9,   
      2010, as amended, with Latin Gold Limited, pursuant to which, Coronet 
      has remaining obligations provided certain milestones are reached by  
      Coronet Peru toward putting the project into production.              

Further, Coronet will be entitled to:


--  participate up to 40% in all financing undertaken by Argus for five
    years or until the Yanamina project has been brought into production;  
--  nominate two board members to the Argus board of directors until the
    project has been brought into production.

The obligations to be assumed by Argus under Coronet's original agreement to the benefit of Latin Gold Limited are:


--  US$1.5 million payable upon commencement of construction or a mine, and
    a bonus of US$1.0 million payable at the time the inferred resource
    exceeds 275,000 ounces gold; 
--  US$2.0 million payable upon the 12 month anniversary of the initial gold
    pour; 
--  US$2.0 million payable upon the 24 month anniversary of the initial gold
    pour; and 
--  common shares valued at US$2.5 million upon confirmation of an inferred
    resource equal to or greater than 250,000 ounces of gold within the
    Yanamina Deeps Exploration Target. The Yanamina Deeps Exploration Target
    is an undrilled potential footwall extension to the existing Yanamina
    resource. Latin Gold will also hold an overriding 1.0% gross royalty on
    all production in excess of 200,000 ounces Au.

Argus' goal in acquiring the Yanamina Project is to work with the local interest groups toward an agreement so as to enable the project to be placed into production. The consideration payable to Coronet is largely contingent upon Argus succeeding in that regard, as the Shares issued to Coronet will be held in escrow to be released as follows:


(i)   one-third of the Shares will be released on the earlier of one year   
      following the closing, or upon the Company signing a production       
      agreement with the local communities;                                 
(ii)  an additional one-third of the Argus Shares will be released on the   
      earlier of commencement of construction of a mine and mill (if        
      required), or three years following the closing; and                  
(iii) the remaining one-third of the Argus Shares will be released on the   
      earlier of commencement of production, or five years of closing.      

If Argus is not successful in negotiating an agreement with the local communities, or putting the project into production, the agreement with Coronet can be unwound as to:


(a)   if an agreement with the local communities is not reached within 12   
      months following the closing, Argus may return the shares of Coronet  
      Peru to Coronet in consideration of terminating 85% of the Shares of  
      Argus issued to Coronet;                                              
(b)   if Argus is unable to commence commercial production within five years
      from the closing, or if Argus reasonably determines within such five  
      year period that it will be unable to commence commercial production  
      from the project by the end of such five year period, Argus may       
      transfer and return the shares of Coronet Peru to Coronet in          
      consideration of terminating all of the Shares which have not then    
      been released to Coronet; or                                          
(c)   if an agreement with the local communities is not reached within 36   
      months following the closing, Coronet may return all of the Shares to 
      Argus in consideration of receiving from Argus all of the shares of   
      Coronet Peru.                                                         

Closing of the transaction is subject to a number of conditions precedent, including satisfactory completion of due diligence and TSXV approval. There can be no assurance that the conditions will be met or that the transaction will be completed as proposed or at all.

New Directors

Argus reports Robert van Santen and Jason McLaughlin have resigned from the Board of Directors. The Board would like to thank each of them for their dedicated work for Argus and wish them well in their future endeavours. Upon closing, the Board will welcome the addition of Mr. Len Harris and Mr. Stephen Stine as representative appointed by Coronet.

Mr. Len Harris

Mr. Len Harris retired in 1995 from acting as President and General Manager of Newmont Peru and President and General Manager of Newmont Latin America. Mr. Harris has been a director of Coronet since 2012; of Sulliden Gold Corp. since September, 2003; of Solitario Exploration & Royalty Corp. since June, 1998; of Cardero Resources Corp. since February, 2000; and of Carnac Resources Corp. since June, 2001. Additionally, Mr. Harris is the Chair of Resource Development Inc., Director Emeritus of Endeavor Silver Corp., President of B&A Mine Services, a director of JVS Ingenieros, a consultant with H&H Metals Corp., with Indico Resources Ltd., with Golden Arrow Resources Corp. and with Consultant Minera Titan del Peru, as well as an advisor with Vena Resources Corp.

Mr. Stephen Stine

Mr. Stine is a mining executive with 39 years of experience in public/private company formation, acquisitions, turnarounds, debt and equity financings and mine operations around the world. Mr. Stine joined Coronet as a Director and COO in June of 2011. Mr. Stine is a co-founder and former director of Alamos Gold where he served as COO in charge of exploration and production. Mr. Stine previously worked for Southern Peru Copper in Peru and speaks Spanish. Most recently, Mr. Stine acted as Director and COO of Etruscan Resources where he was responsible for turning around the Youga Gold Mine in Burkina Faso, West Africa. During that time, the mine doubled production and the cost of production was reduced by 50%.

Private Placement

Argus will be undertaking a concurrent $500,000 non-brokered private placement in conjunction with the transaction. Proceeds will be used for costs associated with concluding the transaction, for community relations in Peru, for additional work on the project to bring the Yanamina environmental impact statement into compliance with current regulations and for general working capital purposes.

Nature of the Transaction

The transaction with Coronet, in combination with the private placement and related matters, will amount to a reverse take-over (RTO) under TSXV policies. Argus intends to seek waivers to the requirements for (i) sponsorship, and (ii) minimum prior expenditures on the project. All of the shares issued to Coronet will be subject to a standard three year, time-release escrow agreement. Shareholder approval to the transaction will be required, however Argus will be seeking approval by way of consent resolution, and so no meeting will be held. A comprehensive filing statement, in the form prescribed by the TSXV will be prepared and filed on SEDAR.

Trading Halt

In accordance with TSXV policy, Argus' shares are currently halted from trading. Trading will resume upon Argus having made adequate filings with the Exchange, including personal information forms for proposed new directors and an updated technical report on the Yanamina project.

Joel Dumaresq, Chairman of the Company, stated: "Coronet is very pleased to see a renewed and dedicated approach to community relations that Argus will bring to the project. The Argus team has extensive experience in establishing long-term sustainable community solutions that comply with project objectives and applicable regulations. Working within this context, Argus will develop appropriate community initiatives and together with the team's strong technical ability will move the Yanamina project forward for the long-term benefit of the Coronet Shareholders.

Michael Collins, CEO and President of Argus stated, "The Yanamina Gold Project hits all the right metrics, low risk capital deployment and speedy development to production that will allow Argus to bring this gold deposit forward in this tough capital market."

Michael Collins P.Geo., a "qualified person" within the meaning of NI 43-101, reviewed and participated in the preparation of the technical information disclosed in this news release.


ON BEHALF OF THE BOARD OF DIRECTORS   ON BEHALF OF THE BOARD OF DIRECTORS   
                                                                            
Michael Collins                       Joel Dumaresq                         
President and CEO                     Chairman of the Board                 

Neither the 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 news release.

Completion of this transaction is subject to a number of conditions, including Exchange acceptance and disinterested Shareholder approval. The transaction cannot close until the required Shareholder approval is obtained and all other conditions are met. There can be no assurance that the transaction will be completed as proposed or at all.

Investors are cautioned that, except as disclosed in the Filing Statement to be prepared in connection with the transaction, any information released or received with respect to the reverse take-over and change of business may not be accurate or complete and should not be relied upon. Trading in the securities of Argus Metals Corp. should be considered highly speculative.

The TSX Venture Exchange has in no way passed upon the merits of the proposed transaction and has neither approved nor disapproved the contents of this press release.

We seek safe harbor.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION: This news release includes certain "forward-looking statements" under applicable Canadian securities legislation. Forward-looking statements include, but are not limited to, statements with respect to: the terms and conditions of the proposed transaction; the terms and conditions of the proposed private placement; future exploration and testing; use of funds; and the business and operations of Argus after the proposed transaction. Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable, are subject to known and unknown risks, uncertainties, and other factors which may cause the actual results and future events to differ materially from those expressed or implied by such forward-looking statements. Such factors include, but are not limited to: general business, economic, competitive, political and social uncertainties; delay or failure to receive board, shareholder or regulatory approvals; and the results of current exploration and testing. There can be no assurance that such statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. Accordingly, readers should not place undue reliance on forward-looking statements. Argus and Coronet disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by law.

Contacts:
Argus Metals Corp.
501 - 525 Seymour Street
Vancouver BC, V6B 3H7
Telephone: +1 (604) 764-7094
Website: www.argusmetalscorp.com

Contacts:
Coronet Metals Inc.
Suite 2630-1075 West Georgia Street
Vancouver, British Columbia V6E 3C9
Telephone: +1 (604) 336-3193
Website: www.coronetmetals.com

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