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Chilean Metals to ink definitive agreement to acquire 3 copper-gold projects in Nova Scotia

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Chilean Metals to ink definitive agreement to acquire 3 copper-gold projects in Nova Scotia

Chilean MetalsInc. said May 5 that it intends to enter into a definitive agreementwith Cogonov Inc. to acquirethe Lynn, Parrsboro and Bass River copper-gold projects in central Nova Scotia.

Under the terms, the company will issue about 20.5 million sharesto Cogonov. The shares are in addition to 6 million shares it issued to Cogonovat the time of entering a definitive agreement to acquire the Fox River project in December 2015.

In September 2015, Chilean Metals inked a nonbinding letter of agreement with Cogonov to acquirefour copper-gold projects in central Nova Scotia.

Cogonov's properties are part of its advanced iron oxide-copper-goldexploration program to reinterpret and review the mineral potential of Nova Scotia.

Additionally, Chilean Metals has arranged a private placementaimed at raising up to C$700,000. The company plans to issue 156,050 warrants entitlingthe holder to acquire 156,050 shares at 7 cents apiece until June 1, 2017.

In addition, the company has placed a C$150,000 debenture dueOct. 31, 2018. The debt bears a 14% annual interest, secured by shares in the company'sChilean subsidiary, which retained a 3% royalty on the Copaquire gold asset that was sold to a unit. The companywill also grant to the debenture holder 1,500,000 warrants exercisable at 12 centsper share by Oct. 31, 2018.

The placements are expected to close by May 6.

Chilean Metals plans to use the raised proceeds to almost equallyfund administrative expenses and the preparation of a drill program in Chile.