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28/03 - Credit Approved Commitment for $42M Financing Package received from Deutsche Bank

Construction set to start by year-end, with first production scheduled in 2013

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Key Points:

• Deutsche Bank provides credit approved commitment for
A$42M financing package

• Overall development financing package targeted for
completion in Q3 2012, with development planned to follow
soon thereafter

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Australian gold company Cortona Resources Limited (ASX: CRC) is
pleased to advise that it is on track to begin development of its
flagship Dargues Reef Gold Project in NSW, having signed a credit
approved commitment letter with Deutsche Bank AG (“Deutsche
Bank”), Sydney Branch, in respect of an  A$42 million financing
package to underpin project construction. 

This important milestone follows extensive due diligence conducted
by Deutsche Bank since it was mandated to provide the financing
package in August last year, as well as the receipt of key State and
Federal environmental approvals for the Dargues Reef Gold Project
last month.

The financing package remains subject to a number of conditions
precedent customary for financing arrangements of this nature,
including final regulatory approval for the transport of gold
concentrate off-site to the mothballed London Victoria treatment
plant located at Parkes. Cortona will operate this plant, which is now
on care and maintenance, but was previously owned and operated
by BHP Billiton.

The Dargues Reef Gold Project, which is located near Braidwood
approximately 60km south-east of Canberra in NSW, is expected to
be one of the few Australian gold projects which this year will move
from feasibility to development, and into production next year.
 
Cortona’s Managing Director, Peter van der Borgh, said receipt of the commitment from
Deutsche Bank represented a key milestone for the Company, effectively laying the
foundations for completing the overall financing package and the commencement of mine
development and construction.

“This key development should enable us to move ahead with completion of an overall debt
and equity financing package.” Mr van der Borgh commented.

The timetable to production for the Dargues Reef Gold Project is now forecast to be:

• Receipt of Environmental Protection License – Q2 2012
• Grant of Mining Lease by NSW State Government – Q2 2012
• Council approval for transportation of gold concentrate off-site to Parkes – Q2 2012
• Approval to utilise paste-fill in underground mine – Q2/Q3 2012
• Completion of overall project financing package – Q3 2012
• Commencement of construction – Q4 2012

The Dargues Reef Gold Project will be an underground mine feeding a 330,000tpa on-site
plant, with forecast production ramping up to a peak rate of ~65,000oz per annum, and
averaging 50,000ozpa over the life of mine, at a forecast C1 unit cash operating cost of
A$697/oz. This operating cost includes a 10 per cent contingency.

The mine is forecast to generate free cash flow of ~A$125 million over its initial 6-year mine
life, using a gold price of A$1,550 per ounce. The  robust economics of the project are
underpinned by the high grade of the deposit, which has an undiluted grade of 7.25g/t Au.

Ore will undergo crushing and grinding at the Dargues Reef site, with 50 per cent of the
gold recovered via gravity methods on site and the balance recovered from a pyrite-gold
concentrate (grading ~25g/t Au). The concentrate will be transported approximately 400km
to the London Victoria gold treatment plant near Parkes which Cortona will operate to
recover gold bars.

“We are targeting financing to be completed during  the third Quarter of 2012, once we
satisfy the conditions precedent including receipt of the outstanding regulatory approvals,
which are largely procedural” Peter van der Borgh said.

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 approximately 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.

Yours faithfully
Peter van der Borgh

Managing Director

http://www.cortonaresources.com.au/files/announcements/274%20-%20Deutsche%20Bank%20$42M%20Credit%20Approved%20Commitment%2028.03.2012.pdf?PHPSESSID=ce51d8e30d1103453e878190775b915c

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