FUNDS raised from a new financing agreement with major shareholder Sentient Executive GP IV Ltd will allow Marengo Mining to begin a new drilling campaign at the Yandera Copper Project in Madang Province. Funds will also be used to support company operations as well as for working capital and general corporate purposes.

Pursuant to the terms of the debenture purchase agreement, Marengo, its PNG subsidiaries and Sentient have agreed to a transaction which will see Marengo issue and sell to Sentient 9.0% senior unsecured convertible debentures up to a principal amount of US$7.5 million. The debentures will mature on June 30, 2017.

Sentient and its related entities hold approximately 22% of the issued and outstanding common shares of Marengo and would hold about 88% of the common shares, assuming the conversion of all the debentures issued in connection with the transaction and the conversion by Sentient of all debentures issued and issuable under prior financings.

Marengo has previously described efforts to increase geological knowledge of the site and is pleased to report that this work has resulted in identification of drilling targets which the company is now pursuing. As contractors are available, and a rig remains mobilized on the site, the company intends to begin drilling these targets immediately.

Between 2006 and 2012, the company drilled 448 exploration, resource and geotechnical drill-holes and drove two adits to test various mineralised zones across the project. In September 2006, the Company commissioned a conceptual mining study (CMS) to include a preliminary mine design and open pit optimisation, metallurgical test work, plant flowsheet design and throughput options and capital and operating cost estimates. In July 2007, the CMS was completed and, based on the positive results, the company determined to proceed with a feasibility study.

Marengo commenced the study in 2008 based on its published copper resource, the prevailing copper price and state of global financial markets at the time. Since then, global resource markets have increasingly become more competitive, with, copper price falling, funding for exploration and development decreasing, and capital and operating costs escalating, bringing into question the economic viability of the development.
During the latter part of FY 2014, the new management team conducted a comprehensive evaluation of all aspects of the prior work conducted towards a feasibility study and concluded that, although progress had been made, further exploration and development work was required in order to finalize the study and as a result, the study was deferred.

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