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08/08 - Mandate for Bank Financing of Dargues Reef Development

Cortona Resources Limited (“Cortona”) is pleased to announce that it has
mandated Deutsche Bank AG (“Deutsche”) to provide a financing package
(“Financing Package”) of up to A$37 Million for the development of the
Dargues Reef Gold Project at Majors Creek in New South Wales.

Cortona received a number of indicative financing offers reflecting the robust
nature of the Dargues Reef deposit and its excellent financial potential. At
the current spot price of A$1,550/oz, Dargues Reef is forecast to deliver free
cash flows of ~A$112 million and a post-tax NPV (8% discount) in excess of
A$75 million dollars. Recent discoveries close to the planned development
highlight the potential for increased near term production and mine life,
while the resource also remains open at depth.

The Dargues Reef development is awaiting approval from the NSW Planning
Assessment Commission. Last week the NSW Department of Resources and
Investment made a positive recommendation for the development to be
approved.

The Financing Package includes a prepaid gold forward and requires Cortona
to commit to a gold hedging program (“Hedging Program”). The total
quantum of gold ounces committed under the Financing Package will be
dependent upon the prevailing spot price at financial close but is expected
to represent less than 30% of the existing proven and probable reserves at
Dargues Reef. The Hedging Program will secure the Company's repayment
obligations whilst providing Cortona with significant exposure to
the spot price in this very strong gold market.

Deutsche was appointed following the completion of a competitive process
facilitated by Optimum Capital Pty Ltd. The provision of the Financing
Package will be subject to due diligence, credit approvals, completion of
project finance documentation and typical conditions precedent for a
financing of this nature.

http://cortonaresources.com.au/files/announcements/242%20-%20Mandate%20f...

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