Orvana Closes US$7.9 Million Loan Facility for Don Mario CIL Recommissioning

TSX:ORV

TORONTO, /PRNewswire/ -- Orvana Minerals Corp. (TSX: ORV) (the "Company" or "Orvana") is pleased to announce that its wholly-owned subsidiary, EMIPA S.A. ("EMIPA"), has closed a US$7.9 million loan facility (the "Loan") with Banco BISA S.A. ("Banco BISA"), a Bolivian bank. The primary use of proceeds will be for the recommissioning of the carbon-in-leach ("CIL") circuit (the "CIL Project") at its Don Mario Mine in Bolivia ("Don Mario" or "Don Mario Mine").

Jeff Hillis, Interim Chief Executive Officer, said "We are very pleased to have successfully secured debt financing for this important project at Don Mario. Banco BISA and EMIPA have a long-standing local banking relationship, and we are pleased to have their strong support for the CIL Project. This is also a vote of confidence in Don Mario and our people. The CIL Project provides attractive economics with expected pay-back within one year and, together with the existing flotation plant, best positions Don Mario for the immediate future."

During April 2016, the Company initiated the purchase of long-lead components of the CIL Project and the project is now underway with an estimated execution period of seven to nine months. The CIL Project is expected to result in lower unitary cash costs and maximize the value of recently defined Don Mario resource estimates, along with providing the processing capabilities necessary to leverage exploration and potential business opportunities, such as local toll milling. Upon commissioning of the CIL circuit, Don Mario will shift to production of gold doré in addition to the current production of copper concentrate.

The US$7.9 million Loan has a term of 19 months and an interest rate of 6% per annum. Security for the Loan includes certain assets at Don Mario for the term of the Loan and a standby letter of credit of US$2.0 million which will be replaced by the CIL circuit once operational. The capital cost estimate of the CIL Project is $6.4 million +/- 15% accuracy, including owner's costs and 15% contingency. The existing US$2.0 million short-term credit facility with Banco BISA, originally set to mature in June 2016, will be rolled into and will form part of the Loan.