Ma
anagement Disscussion and Analysis
A
for th
he three and six months end
ded June 30,
2012
(Ex
xpressed in U
U.S. Dollars)
Dated: Au
ugust 1, 2012
For further information
i
on
n the Company
y reference shou
uld be made too the Companyy’s public filinggs which are avvailable
on SEDAR
R at www.sedaar.com. Inform
mation is also available at thhe Company’ss website www
w.coromining.ccom. In
addition, reference should
d be made to the risk factorrs section of thhe most recenntly filed Annuual Informationn Form
(“AIF”) or the
t Company’ss audited and consolidated fin
nancial statemeents for the yeaar ended Decem
mber 31, 2011..
The followiing information
n is prepared in
i accordance with Internatioonal Financiall Reporting Staandards (“IFRS
S”) and
denominated
d in United Sttates dollars, unless
u
otherwise noted. Thiss MD&A shouuld be read in conjunction w
with the
Company’s unaudited finaancial statemen
nts for the threee and six monthhs ended June 30, 2012.
This MD&A
A may contain forward looking statements based on assuumptions and juudgments of m
management regarding
events or reesults that may
y prove to be inaccurate
i
as a result of expploration or otther risk factorrs beyond its ccontrol.
Actual resullts may differ materially
m
from
m the expected results.
r
Ta
able of Conten
nts:
1 PR
ROFILE AN
ND STRATE
EGY...................................................................................... 2 2 PR
ROJECTS UPDATE
U
............................................................................................... 3 3 OU
UTLOOK ................................................................................................................ 9 4 Q2
2 2012 FINA
ANCIAL PO
OSITION REVIEW
R
.... ......................................................... 10 5 Q2
2 2012 EXP
PENDITURES REVIEW
W.............. ......................................................... 13 6 RISKS AND CRITICAL ACCOUNT
TING ESTIM
MATES & POLICIES ....................... 16 7 SU
UMMARY OF
O FINANC
CIAL PERF
FORMANCE
E AND FIN
NANCIAL P
POSITION........ 18 Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 1
1
PRO
OFILE AND STRATEGY
S
Y
1.1 Profille
Coro Miniing Corp. (thee “Company” or “Coro”) iss an exploratioon/developmennt stage mininng company thhat was
incorporateed in 2004 and
d is listed on th
he Toronto Sto
ock Exchange, under the sym
mbol “COP”. A
As of August 1, 2012
the Compaany had 138,29
93,934 shares outstanding
o
and a market cappitalization of C
CA$ 30 millioon. The Company has
its registered corporate office in Vancou
uver, Canada.
It is curren
ntly advancing
g the Berta (secction 2.2), El Desesperado
D
((section 2.3), C
Chacay (sectioon 2.4) and Llaancahue
(section 2.6) copper porp
phyries in Chiile and its San
n Jorge projectt in the Provinnce of Mendozza, Argentina ((section
2.5).
1.2 Strateegy
Coro was founded with the
t goal of bu
uilding a minin
ng company fo cused on mediium-sized basee and preciouss metals
deposits in
n Latin America. It intends to
o achieve this goal
g through thhe exploration for, and acquissition of, projeects that
can be dev
veloped and placed
p
into pro
oduction. Thee Corporation’ s strategy is tto become a m
mid-tier produccer and
intends to do this by id
dentifying, seccuring and developing resouurces that aree located in arreas with estaablished
infrastructu
ure. To minim
mize any politiical and execution risks assoociated with itss strategy, Corro intends to fo
focus its
strategy in politically stab
ble countries.
1.3 Cash and Financin
ng
As of Junee 30, 2012 the Company
C
had cash and cash equivalents off $7.9 million ((December 31,, 2011: $12.0m
m) and a
working capital of $7.3 million (Deccember 31, 20
011: $12.0m). From inceptiion to June 330, the Compaany has
cumulativeely raised $50..2 million in cash
c
through equity
e
offeringgs and the salee of investmennts. No debt haas been
raised by the
t Company at
a this time. From
F
inception
n, the cash has predominantlyy been used too acquire and aadvance
the San Jorrge project ($26 million), and
d evaluation, accquisition and exploration off projects in Chhile ($27 millioon).
1.4 Key Personnel
P
and
d Competenciees
The Board
d of Directorss is comprised
d of three Ind
dependent Direectors, one Ouutside Director and two Exxecutive
Directors. The Board is chaired by Ro
obert Watts, an
n Independent Director with over 40 yearss of experiencee in the
mining ind
dustry. The board has signifi
ficant experiencce in the fieldds of Exploratioon, Accountinng & Finance, Mining
Law, and Mining
M
Operattions. The Outtside Director represents
r
the Company’s m
major shareholdder Benton Reesources
Corp. (“B
Benton”). Alan
n Stephens is th
he President an
nd CEO of thee Company and has over 36 years of internnational
mining exp
perience includ
ding Latin Ameerica.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 2
2
PR
ROJECTS UPDATE
U
2.1 Overview

Final results from Berta
B
and initiattion of resourcee drilling (Jul 22012)

Filed Updated EIS in Mendoza forr San Jorge (Ju
ul 2012)

n 2012)
Initiall drill results frrom Berta (Jun

Presen
ntation of San Jorge PFS to OFEMI
O
(Apr 2012)

Drillin
ng commenced
d at Berta (Marr 2012)

Releaased PFS San Jo
orge Leach Op
peration in Prov
vince of San Juuan (Mar 20122)

Amen
nded San Jorgee acquisition terrms (Feb 2012
2)

Optio
oned El Desesperado property
y in Chile (Feb 2012)
2.2 Berta Property, Ch
hile
In June 20
011, the Comp
pany announceed the acquisitiion of Berta P
Property, whichh is a 506 hecctare property located
approximaately 20km wesst of the villagee of Inca de Orro in the III Reegion of Chile, at an elevationn of 1,700m. T
The Inca
de Oro po
orphyry copperr project being
g developed by
y PanAust andd Codelco is loocated immeddiately adjacentt to the
village of the
t same namee. Anglo Ameriican’s Manto Verde
V
operatingg copper minee is located 33kkm to the northhwest of
Berta, and Capstone Min
ning’s Santo Domingo projecct (acquired forr approximatelly $725 millionn), is located 330km to
the northeaast.
Coro may acquire 100% of the Berta property
p
for a total
t
of $6 milllion ($1 millioon paid). In adddition, a 1.5% NSR is
payable on
n any sulphide copper production together with
w any by-prooduct metals. F
For full acquissition details reeference
should be made
m
to section
n 4.4. The Com
mpany has also
o acquired addditional groundd surrounding thhe Berta propeerty.
The follow
wing table summarizes the qu
uarter by quarter expenditurees for the last eeight quarters aand indicates tthe year
to date (“Y
YTD”) expenditures over the last three yearss and life to daate (“LTD”) exxpenditure on thhe project.
Table 1: ($0
000’s)
Berta Expeenditures
Consult, lab
b & prof.
Drilling & trenching
t
General & admin
a
costs
Property inv
vestigations
Property acq
quisition
Travel & acccommodation
Total explo
oration costs
Qu
uarterly
Q310 Q41
10 Q111 Q21
11 Q311 Q41 1 Q112
5
3
88
409
277
4
2
67
15 7
70
20
00
1
1
3
4
20
00
486
1644
441
Q2212
1163
8874
9
1151
8800
8
2,0005
2010
-
YT
TD
2011
200
200
2012
251
1,151
11
221
800
12
2,446
LTD
259
1,560
15
445
1,001
16
3,296
Consulting
g, labour and professional feees in Q1 and Q2
Q 2012 relate tto costs associated with overrseeing the receent drill
program. In
I Q1 2012 driilling and trencching costs inclluded 2,340 m
metres of reserve circulation (““RC”) drilling and Q2
2012 inclu
udes a further 8,180
8
metres off drilling. Thee 32 hole (10,5220m) 2012 proogram includedd a highlight inntercept
of 134 metters at 0.87% copper
c
equivaleent. The resultts from the 20112 program weere included inn the Company’s news
releases daated June 13, 2012
2
and July 31, 2012. The results have pprovided the C
Company with the encouragem
ment to
commencee an infill grid
d drilling RC program on 50m
5
centres aiimed at definiing an NI 43--101 compliannt oxide
resource fo
or the higher grade
g
portion of
o Berta Sur an
nd Berta Centrral. Subsequennt to period ennd, the Compaany also
commenceed sampling off diamond drilll core and surfface trenches too define metallurgical param
meters. Q3 20111 costs
for drilling
g relate to the 24
2 hole (4,360m
m RC drilling program). Thee drill results inncluded a highhlight interceptt of 200
metres at 0.70%
0
copper equivalent.
e
Fo
or full results of
o this drill proogram referencee should be maade to the Com
mpany’s
news releaase dated September 27, 2011.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 3
Included within
w
property
y investigation costs are the assay
a
costs asssociated with tthe aforementioned drill cam
mpaigns.
Also inclu
uded in Q4 20
011, property investigation
i
costs
c
are the ccosts of a gridd chemistry sampling progrram, an
Induced Po
olarization (“IP”) survey an
nd initial recon
nnaissance mappping program
m. Q1 2012 pproperty investtigation
costs inclu
ude topographicc surveying and
d grid layout work.
w
The properrty is compriseed of 506 hectaares is being accquired througgh an option aggreement with a local Chileaan claim
owner and
d wholly owned
d ground. Thee property acqu
uisition cost inn Q2 2011 relattes to the first option paymennt upon
signing thee agreement an
nd the $800,000
0 in Q2 2012 reelates to the seecond option paayment (refer ssection 4.4).
2.3 El Dessesperado, Ch
hile
In Februarry 2012, the Co
ompany entereed into an optio
on agreement tto acquire the El Desesperaddo property forr a total
of $13 million ($200,000
0 paid) (section
n 4.4). In addittion, a 1.9% saales royalty is ppayable on anyy production fr
from the
property, over
o
which Corro has a first rig
ght of refusal.
The 698 heectare property
y hosts porphy
yry copper stylee mineralizatioon and is located approximattely 7km northhwest of
the city off Calama, and 16km
1
southweest of the world
d famous Chuqquicamata coppper mine, in thhe II Region of Chile.
The Toki Cluster
C
porphy
yry copper depo
osits currently being evaluateed by Codelco,, are located im
mmediately to tthe east
of the pro
operty. They comprise thee major Toki,, Quetena, G
Genoveva and Opache centters of porphyyry Cu
mineralization, each containing severall hundred million tonnes of copper oxide rresources, gradding 0.4-0.5%C
Cu, and
entirely co
overed by grav
vels. Based on
n outcropping alteration,
a
lithoologies and coopper oxides, C
Coro believes there is
good poten
ntial in the un
ntested northerrn part of the El Desesperaddo property too host significcant mineralizaation of
similar stylle to the adjaceent Genoveva and
a Quetena deeposits.
The follow
wing table summ
marizes the quaarter by quarteer expendituress for the last eigght quarters annd indicates thee YTD
expenditurres over the last three years an
nd LTD expenditure on the pproject.
Table 2: ($0
000’s)
El Desesperrado Expenditu
ures
Consult, lab
b & prof.
Drilling & trenching
t
General & admin
a
costs
Property inv
vestigations
Property acq
quisition
Travel & acccommodation
Total explo
oration costs
Quarterly
Q310 Q410
Q
Q111 Q211
Q
Q311 Q
Q411 Q112 Q
Q212
5
30
19
200
230
24
YTD
2010 2011
-
2012
LTD
5
49
200
254
5
49
200
254
As El Dessesperado wass acquired in February 2012, no costs exxist prior to Q
Q1 2012. Thhe Q1 2012 pproperty
investigatio
on costs relatee to topographiic surveying an
nd grid layoutt work, the Q22 2012 costs reelate to a geopphysical
survey und
dertaken to help
p target the pro
oposed drill pro
ogram later in 2012. The prooperty acquisitiion payment reelates to
the initial payment
p
due on
n signing of th
he option agreement (section 44.4).
2.4 Chaca
ay, Chile
The Comp
pany owns 100
0%, subject to a 2% Net Proffit Interest (cappped at $2 milllion), of the C
Chacay copper project
which is lo
ocated 12km so
outheast of Tecck Resources’ Relincho propperty, in Chile. The Companny completed a NI 43101 compliant report in
n April 2011, which is avaailable on its website and www.sedar.coom. Prior to Coro’s
acquisition
n, a total of 30 holes (6,537m)) had been drillled other comppanies with onnly limited dataa available to C
Coro.
Since acqu
uisition, Coro has
h drilled 24 RC holes (5,758m) and 4 diiamond Drill hholes between 2009 and 2011 (most
recent- Jully 2011), with all campaigns having interceepted significaant secondary ccopper minerallization. A signnificant
chalcocite blanket has been identified at the Nacho Zone, with m
minimal testingg to date of thhe underlying pprimary
sulphides.
The follow
wing table summ
marizes the quaarter by quarteer expendituress for the last eigght quarters annd indicates thee YTD
expenditurres over the last three years an
nd LTD expenditure on the pproject.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 4
Table 3: ($0
000’s)
Chacay Exp
penditures
Consult, lab
b & prof.
Drilling & trenching
t
General & admin
a
costs
Property inv
vestigations
Property acq
quisition
Travel & acccommodation
Total explo
oration costs
Qu
uarterly
Q310 Q41
10 Q111 Q21
11 Q311 Q41 1 Q112
21
53
5
26
43
4
29
81
6
15
59
41
60
06
208 (1155)
3
1
7
5
5
2
2
8
29
60
6
41
8
32
2
9
10
17
1
14
122
8
25
23
32
107
73
33
297
(99)
48
Q2212
2
1
1
2
6
2010
57
64
1
186
8
316
YT
TD
2011
69
647
8
89
27
840
2012
8
3
33
10
54
LTD
27
336
1,032
392
89
1,876
In Q4 2010
0 and Q1 2011
1, an 8 hole (2,424 metre) RC
C drill program
m completed, w
which includedd a highlight inntercept
of 170 meetres at 0.63% copper. In Q2
Q 2011, the Company
C
comm
menced at 4 hhole (1,975 meetre) diamond drilling
program, th
he final resultss of which werre reported in October
O
2011 aand included 1154 metres at 00.67% copper. For all
drill resullts reference should be maade to the fu
ull news releeases containeed on the Coompany’s webbsite at
www.corom
mining.com. The credit in Q4 2011 relaates to the revversal of an acccrual for the aforementioned drill
program.
Included within
w
property investigation costs
c
are the asssay costs assoociated with thee aforementionned drill prograams. In
Q2 2010, the
t Company also
a completed
d a six-line kilo
ometre Titan D
DCIP survey. T
The Q1 2012 pproperty investtigation
include thee costs relate to
o the payment of the annual mining
m
rights ((taxes) on Chaacay. Work in 22012 has been limited
as the Com
mpany has focu
used on the optiioned propertiees at Berta andd El Desesperaddo rather than Chacay.
2.5 San Jo
orge, Argentin
na
2.5.1 Sttage of Development:
In Argentin
na, the Compaany is currently
y developing th
he medium sizze San Jorge poorphyry copperr-gold deposit,, located
in the Prov
vince of Mendo
oza. San Jorgee is a developm
ment stage propperty with an eestablished NI 443-101 resourcce. Coro
is acquiring
g the project frrom Franco Neevada (section 4.4).
4
In March 2012,
2
the Comp
pany announceed an alternativ
ve developmennt plan for Sann Jorge that invvolved the consstruction
of an SXE
EW heap leach plant in thee neighboring province of S
San Juan. Thhe announcem
ment of the altternative
developmeent plan also included the reesults from a Preliminary
P
Feeasibility Studdy (“PFS”) on the San Juan Copper
Leach Pro
oject (“SJ Projject”). This PFS
P
was preseented to the rrecently formeed Federal Orrganization of Mining
Provinces (“OFEMI”), which
w
includes the provinces of Mendoza aand San Juan, in April 2012 and the Comppany has
filed an up
pdated EIS (July
y 2012) to inco
orporate the raiilway envisageed in the recentt PFS.
Current legislation (Law
w 7722) in thee Province of Mendoza prohhibits the use of sulphuric acid required in heap
leaching off copper ore.
Prior to th
he developmen
nt of the SJ Prroject the Prov
vincial Legislatture of Mendooza, on Augusst 24, 2011, haad voted
against rattifying the Com
mpany’s Envirronmental Imp
pact Declaratioon (“EID”) forr a float only project that hhad been
approved by
b the Governm
ment on Mend
doza in Februarry 2011. The vote took placce prior to the elections, whiich were
held on Occtober 23, 2011
1 without the conclusions of the
t legislature’’s commission s who had spennt a number off months
evaluating the EID, and more
m
pertinenttly, the validity
y of the processs which led too its approval. Coro has com
mpleted a
legal revieew of the proccess that led to
o the no ratifiication vote annd believes it has grounds tto file suit agaainst the
Mendoza government
g
and certain indiv
viduals, involveed in the processs.
Law 7722 that prohibits the
t use of sulp
phuric acid and
d required the rratification of tthe EID for thee float only prooject has
been subjeect to legal chaallenges of its constitutionality by Coro annd several otheer parties since its inception iin 2007.
Prior to developing the flloat only project and the intro
oduction of Laaw 7722, Coro had completedd an engineerinng study
on a heap leach operatio
on in Mendozaa (refer to section 2.5.3). Cooro expects thaat the legal chhallenges to Laaw 7722
may be ressolved in 2012, whereby Law
w 7722 could be
b declared uncconstitutional, which could reesult in the rem
moval of
the ratificaation requirem
ment of the Co
ompany’s app
proved EID foor the float onnly project annd the removal of the
prohibition
n against the use of sulphuricc acid in the Province
P
of Meendoza. Notwiithstanding, thhe Company inntends to
continue to
o advance the development
d
of
o its San Juan Copper Leachh Project due thhe uncertain poolitical environnment in
Mendoza.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 5
2.5.2 Flloat Only -Env
vironmental Approval:
A
The EIS on
o the Float only project (submitted Occtober 2008) was acceptedd for evaluatioon by the Proovincial
Governmen
nt in Mendozaa in March 2009. After accepttance, the EIS went through ffour significannt stages prior tto being
approved. In Septemb
ber 2009, the National Technological U
University ("U
UTN") of Mendoza compleeted its
independen
nt and impartiial evaluation of the EIS on
n behalf of thee Provincial G
Government off Mendoza. Thhe UTN
report stateed that the EIS
S has satisfacto
orily complied with all nationnal and provinncial regulationns, and has conncluded
that the Pro
oject, if develo
oped in full com
mpliance with these
t
regulatioons, would have a highly posiitive economicc impact
on the Prov
vince of Mendoza in general and the districct of Uspallata iin particular.
The secon
nd stage of thee approval pro
ocess, a Secto
oral Review w
was completedd in February 2010, was a process
coordinated and supervissed by the Prov
vincial Secretarry of the Envirronment and inncluded more tthan 10 opinionns from
provincial bodies which endorsed the project.
p
With the positive reesults and connclusions from the Sectoral R
Review,
the third sttage, a formal public
p
hearing was held Octo
ober 26, 2010 w
where the merrits of the projeect were debateed prior
to the project being subm
mitted to for ap
pproval. The Public
P
Hearingg was attended by more than 2,000 individuuals and
gave the people of Mend
doza, and particcularly the resiidents of Uspaallata, the oppoortunity to exprress their view
ws about
the develop
pment of San Jorge.
J
The Interdisciplinary Com
mmission for the
t Environmen
ntal Evaluationn of Mining Prrojects ("CEIA
AM" in Spanishh) of the
Province of
o Mendoza theen completed its
i compilation
n, collation andd evaluation off the previouslly completed ssectorial
reviews; th
he outcome of the public hearring and publicc consultation process; and thhe results of addditional hydroological
studies, and recommendeed in December 2010, that thee EIS be approoved by the proovincial governnment.
On Februaary 7, 2011 the Provincial Government
G
off Mendoza appproved the EIS
S, and the ressulting Environnmental
Impact Declaration ("EID
D") was submittted to the Prov
vincial Legislaature for ratificcation. The EID
D is conditionaal, inter
alia, upon San Jorge com
mplying with th
he highest stan
ndards of envirronmental proteection, controll and monitorinng prior
to, and durring the constru
uction and opeeration of the project, includinng the requirem
ment for the paaste tailings deeposit to
be made impermeable with
w a liner. The Provinciaal Legislature of Mendoza vvoted against ratifying the E
EID on
August 24,, 2011.
2.5.3 Ecconomics:
The follow
wing table summ
marizes the economic studiess undertaken too date on San Jorge. The Coompany had innitiated a
Leach Onlly Study in Mendoza
M
prior to
t the implementation of 77722 law whichh banned the uuse of toxic chhemicals
including sulphuric
s
acid in mining, in July
J
2007. As a result of the iimplementationn of 7722, the Company propposed to
develop a float only proj
oject in Mendo
oza. As a resu
ult of the no raatification votee that occurredd in August 20011, the
Company evaluated the development alternatives available
a
and completed a PFS on proccessing the oxxide and
enrichment blanket in Saan Juan (SJ Projject).
Table 4: Sa
an Jorge Econom
mic Evaluations
Base Case (NPV10%)
Average Caash Costs (Years 1 to 5)
Average Pro
oduction
(Years 1 to 5)
Mine Life
Initial CAPE
EX
Prepared By
y
Report Typee
Date
Q2 2012 MD&A (expressed in U.S. Dollars)
Pre-tax
P
NPV
Pre-tax
P
IRR
After-tax
A
NPV
After-tax
A
IRR
Price
P
Deck
Before
B
Credits
After
A
Credits
Copper
C
(tonnes)
Gold
G
(ounces)
San Juaan-Leach
Only
$260m
41%
$133m
29%
$2.880/lb Cu
$1.26
$1.26
25,000
n/a
10
$184
PR
ROPIPE
PFS
M
Mar 2012
Mendoza-Mend
dozaFloat Onlyy
Leach Only
$291m
m
$1159m
31%
%
28%
$82m
m
$$77m
18%
%
20%
$1.65/lb Cu annd $600/oz gold
$0.911
$$0.90
$0.699
$$0.55
51,0000
244,000
42,0000
n/a
166
10
$277m
m
$1162m
G
GRD MINPROC
C
AUSEN
NCO
PEA
A
PFS Stanndard
April 20088
April 2008
TSX Symbol: COP
Page| 6
For full deetails of the SJJ Project refereence should bee made to the Company’s N
News Release 112-04 dated M
March 5,
2012. For a full discussiion of the resu
ults from the Float
F
Only Proj
oject Preliminaary Economic A
Assessment (““PEA”),
reference should
s
be madee to the Compaany’s News Reelease 08-09 daated April 22, 22008.
2.5.4 Ex
xpenditure to date:
The Comp
pany only cap
pitalizes costs associated with
w
its develoopment projectt, San Jorge. The followinng table
summarizees the quarter by
b quarter exp
penditures for the
t last eight qquarters and inndicates the YT
TD expenditurres over
the last thrree years and LTD
L
expenditu
ure on the projeect. The table has been prepaared on a pro-fforma basis connsistent
with the IF
FRS adjustments that were reccorded in 2010
0.
Table 5: ($0
000’s)
San Jorge Expenditures
E
Engineering
g
Environmen
ntal & permitting
g
Geology
Misc. development costs
Property acq
quisition costs
Share based
d compensation
Total costs capitalized
Quarterly
Q310 Q410 Q111 Q211 Q311 Q411 Q112
50
5
90
242
100
92
368
154
236
222
174
56
82
111
58
129
81
89
117
317
194
136
307
365
185
245
- 4,000
2
3
272
92
85
88
86
543
681
620 4,764
843
778
604
Q212 2010
12
101 180
59 142
140 158
- 2,000
42
14
354 2,494
YTD
2011 2012
- 112
390 157
187 176
443 385
4,000
364 128
5,384 958
LTD
2,654
2,352
4,486
7,124
10,619
838
28,073
The signifficant expendittures during Q2
Q 2010 & Q2 2011 were thhe option paym
ments of $2 m
million and $4 million
respectivelly (refer to section 4.4). Eng
gineering costs up to Q3 201 1 have been m
minimal as the C
Company awaaited the
ratification
n of the EIS on
n the Float Only
y Project. In Q3
Q 2011, the C
Company initiaated the PFS onn the SJ Projecct which
was complleted in Q1 201
12.
Environmeental and perm
mitting costs include the legal
l
costs, coommunity connsultation & ccommunicationn costs
associated with trying to obtain the soccial and enviro
onmental licensse to develop tthe project in U
Uspallata. Thee higher
costs in Q4
410 are related
d to the public hearing that was
w held in Occtober 2010. T
The higher costts in Q2 2011 and Q3
2011 are associated with the work bein
ng undertaken leading
l
up to tthe ratification decision in Auugust 2011. Inncluded
in Q1 2012 are legal costs associated with the ongo
oing permittingg issues of thee project. Thee increase in Q
Q2 2012
relates to th
he submission of an updated EIS to includee the proposed railway propossed in the PFS.
Geology costs are princip
pally compriseed of salary co
osts and the co sts of maintainning a camp att San Jorge. G
Geology
costs in Q2
2 2011 rose ass the result of one-off vehiclle and camp coosts. Costs weere higher in Q
Q1 2012 as a result of
one-off lab
bour costs.
Miscellaneeous developm
ment costs in Q1
Q 2011 weree lower due tto the receipt of $218,000 iin Value Addded Tax
(“VAT”) in
n Argentina. Due
D to the unccertainty surrou
unding the timiing and collecttion of VAT thhe Company haad fully
provided for
fo its VAT which resulted in the Company deferring this ccost as part of the developmeent costs at Sann Jorge.
Miscellaneeous developm
ment costs in Q3
3 2011 also incclude the costss of establishinng the Mineral San Jorge Fouundation
which wass designed to develop
d
the ag
gricultural and eco-tourist pootential of the large ranch onn which the prroject is
located, as
a well as asssisting in thee socioeconom
mic developm
ment of the U
Uspallata com
mmunity. The higher
miscellaneeous developmeent costs in thee first three qu
uarters of 20111 were due to aan increased prrofile and com
mmunity
consultatio
on and educatio
on program in Mendoza,
M
as th
he project apprroached the rattification decisiion.
Share baseed compensation relates to the
t accounting
g requirement to capitalize sshare based coompensation ((the fair
value of sttock options granted)
g
to ourr developmentt team. The llimited costs inn 2010 relate to most of thhe stock
options hav
ving vested in previous yearss and the increaase in Q1 20111 relates to an ooption grant in February 20111.
Impairmeent:
As a resullt of the decission by the go
overnment not to ratify the EID, the Com
mpany completed an assessm
ment of
impairmen
nt indicators in
n accordance with
w the requirrements of IFR
RS 6, Exploraation for and E
Evaluation of M
Mineral
Resources.. The Compaany plans to co
ontinue to adv
vance the San Jorge project and is pursuinng several alterrnatives
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 7
including legal remediees with the Province
P
of Mendoza
M
and an alternativee developmennt scenario invvolving
constructio
on of a processsing facility in
n the neighboriing province o f San Juan. N
Notwithstandinng its future plaans, the
Company concluded
c
thatt the failure to ratify
r
the EID is an impairmeent indicator.
Accordingly, the Comp
pany has revieewed the variious possible development alternatives aand believes tthat the
probability
y weighted cassh flow estimaate from the prroject exceeds the carrying vvalue of the innvestment to ddate and
therefore has
h concluded that
t no impairm
ment provision
n is necessary aat this time. A key determinnant in this probbability
weighted fair
f value less costs to assesssment was the recent compleetion of the PF
FS on a leach ooperation in Saan Juan.
The San Ju
uan developmeent scenario has a fair value, after
a
tax, of $1133 million bassed on a coppeer price of $2.880 and a
discount raate of 10%. At June 30, 2012 the LME Copp
per price was $$3.45.
The value of the projectt is highly sensitive to a num
mber of assum
mptions includiing but not lim
mited to; the ppotential
developmeent scenarios av
vailable to the Company; cop
pper, gold, andd acid prices, cconstruction coosts; and the abbility to
obtain the necessary regu
ulatory and env
vironmental app
provals.
During 2012, the Federaal Governmentt of Argentina,, moved to Naationalize YPF
F, Argentina’s largest oil Coompany.
The Comp
pany is not awaare of any agen
nda to extend the nationalizaation process tto any other coompany in the oil and
gas sectorr in Argentinaa or to any otther sector off the economyy. The Comppany will conntinue to moniitor the
implication
ns of this natio
onalization and
d any potentiall impact on itss San Jorge prroject. Althouggh this nationaalization
has increassed the politicaal risk associatted with invessting in Argenttina, the Comppany currently does not belieeve that
this decisio
on will have a significant im
mpact on being
g able to recovver its investm
ment in San Joorge and thereffore the
Company has
h not taken an
a impairment provision at th
his time.
2.6 Otherr Chilean Explloration
In Chile, the Company’ss exploration portfolio
p
also includes the Lllancahue, El T
Tapao (optioneed terminated iin April
2012) and Celeste prosp
pects. These prospects
p
are exploration prrospects whichh have no estaablished resourrce; the
Company is
i currently plaanning to underrtake exploratiion programs oon these properrties.
Llancahuee:
The Llancaahue Copper property is locaated 38km soutth west of the ccity of Talca inn the VII Regioon of central C
Chile. In
2008, 7 RC
C holes were drilled
d
with thee last hole, (LL
LA-07), interseecting significaant mineralizatiion (which inccluded a
highlight intercept of 100m at 1.37% copper).
c
In 20
009, an additioonal 6 RC holle program andd a ground maagnetics
survey wass completed. The
T Company intends
i
to drill a few deep diaamond drill hooles later in 20112.
Celeste:
Located 47
7km northeast of the port off Chanaral, in the
t III Region of Chile, the C
Celeste Properrty is contiguoous with
and along strike to the northeast
n
from
m, the ENAMII owned Cerroo Negro Iron O
Oxide Copper Gold ("IOCG
G") type
deposit. In
n 2006-2007, th
he Company co
ompleted a surrface exploratiion program annd drilled 19 R
RC holes for a total of
3,650m. Th
he drilling indiicated that broaad zones of strructurally contrrolled, copper sulphide mineeralization are ppresent,
and will bee the target for future exploraation by the Company.
Other Pro
operties:
The Pocillaas prospect, is a low sulphidaation epitherm
mal prospect disscovered by Cyyprus Amax (““Cyprus”) in thhe early
1990's. Cy
yprus' had returrned values of 13m at 2.95 g//t Au includingg 2m at 12.8g/tt Au, 21m at 0.62g/t Au, andd 33m at
0.50g/t Au
u, these results have not been
n confirmed by
y Coro, and weere completed to the standarrds that existedd at that
time. The Company is cu
urrently attemp
pting to gain acccess to the prooperty as the suurface owners have denied acccess.
The Company also holds the Gloria pro
operty in the IIII Region of Chhile.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 8
The follow
wing table summ
marizes the quaarter by quarteer expendituress for the last eigght quarters annd indicates thee YTD
expenditurres over the last three years.
Table 6:
Other Explloration ($000’ss)
Consult, lab
b & prof.
Drilling & trenching
t
General & admin
a
costs
Property inv
vestigations
Property acq
quisition
Travel & acccommodation
Total explo
oration costs
Quarterly
Q
Q310 Q410 Q111 Q211 Q311 Q411 Q112 Q212
40
38
36
41
17
51
14
55
62
31
39
87
248
203
173
85
278
28
16
17
10
23
22
5
42
25
12
3
11
4
7
2
12
12
90
105
137
344
244
303
153
373
20100
1255
444
3
477
488
155
2822
YTD
2011
77
335
33
25
11
481
2012
69
363
70
24
526
Drilling co
osts include 3 holes (458 metres)
m
in Q4
4 2011 at El T
Tapao, where no significannt mineralization was
encountereed. Property acquisition
a
costts include $25,,000 in option payments for El Tapao in Q
Q2 2011 subseequently
dropped in
n Q2 2012 and
d the deemed value
v
of 150,00
00 common shhares for the accquisition of thhe Celeste propperty in
Q2 2010. The Company
y also fully prrovides for vallue added taxees (“IVA”) in Chile and theese costs are inncluded
within gen
neral and admiin. The provision for IVA increased due to the enlargeed explorationn programs connducted
from in Q1
1 2011 and bey
yond.
3
OUT
TLOOK
The Comp
pany continues to be encourag
ged by its explloration resultss in Chile, partticularly with tthe recent drilll results
from Bertaa and the explo
oration work un
ndertaken on El
E Desesperadoo. The politicaal climate in A
Argentina contiinues to
remain chaallenging, partiicularly in ligh
ht of the foreig
gn currency coontrols that havve recently beeen introduced and the
recent nationalization of YPF among otther things.
Berta, Chiile:
The Company is encouraaged by the ressults obtained from
f
the Berta project, and acccordingly hass elected to prooceed to
the second
d year of our option.
o
As currrently envisag
ged, we see goood potential for low cost, open pit, heapp leach,
copper cathode productio
on from Berta and we have also intersecteed significant uunderlying prim
mary sulphide copper
molybdenu
um mineralizattion which may
y form the bassis for a later fl
flotation projecct. We now inttend to compleete infill
drilling aim
med primarily at
a defining an NI43-101
N
com
mpliant oxide reesource, and a column test woork program too define
metallurgiccal parameters.
El Desespeerado, Chile:
In Februarry 2012, the Company op
ptioned the Ell Desesperadoo property, w
which hosts poorphyry coppeer style
mineralization and is located 16km sou
uthwest of the world
w
famous Chuquicamataa copper mine aand immediateely west
of the Tok
ki Cluster porph
hyry copper deeposits currentlly being evaluuated by Codelcco. The Toki Cluster comprrises the
major Tok
ki, Quetena, Genoveva
G
and Opache centeers of porphyry
ry copper mineralization eacch containing several
hundred million
m
tonnes of
o copper oxidee resources, graading 0.4-0.5%
% copper, and aare entirely covvered by graveels. The
Company is encouraged
d by the initiaal results of ou
ur surface expploration, whicch has confirm
med the potenntial for
discovery of
o additional members
m
at thee Toki Cluster. Drilling had initially been sscheduled for Q2 2012 but hhas now
been pusheed back to the second
s
half of the year to acccommodate thee additional ressource drilling at Berta.
Chacay, Chile:
C
The review
w of the drilll samples and
d surface map
pping confirmss that the enrrichment blanket is related to the
developmeent of extensiv
ve phyllic alterration of a graanodiorite hostt rock and varrious other typpes of porphyrries that
intrude it. The next step at Chacay is to
o undertake ad
dditional drillinng aimed at defining a resourrce for the enriichment
blanket an
nd to further ex
xplore the Luccho and SE tarrgets. As Chaacay is a whollly owned propperty, the Com
mpany’s
initial focu
us has been on
n our optioned properties to ensure
e
that we have sufficiennt information to justify makking the
ongoing op
ption paymentss and as a resullt the exploration work underrtaken at Chacaay this year, haas been limitedd.
Llancahuee, Chile:
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 9
The Llancaahue project iss 100% owned
d by Coro. In 2009,
2
a 6 holee reverse circullation drill proogram was com
mpleted,
including an
a intercept off 100m at 1.37%
% copper. Thee drilling to daate suggests thaat this minerallized intrusive,, and its
brecciated contact zone is
i of restricted
d areal extent. However, thee intensity of thhe alteration aand the accomppanying
high gradee copper molyb
bdenum mineraalization, togeth
her with the exxtensive propyylitic halo, suppport the conceppt that a
larger bod
dy of mineralizzed diorite or breccia compllex may be prresent. The C
Company intennds to further test the
property with
w a small diaamond drilling program in late 2012.
San Jorge, Argentina:
The Comp
pany’s fifth and
d most advancced copper-gold porphyry is located in thee politically chhallenging provvince of
Mendoza, Argentina. Th
he results of the
t PFS, have been presenteed to all of thhe members off the recently formed
Federal Organisation off Mining Prov
vinces ("OFEM
MI"), which iincludes the ggovernments oof Mendoza aand San
Juan. The Company has now updated its
i approved EIIS to incorporaate the railway that was proviided for in the PFS, to
rail the oree to the neighbouring provincce of San Juan, and this has bbeen submittedd to the governnment of Menddoza for
approval. A new EIS wou
uld then be preepared and subm
mitted for the pproposed plantt facilities in San Juan.
If this is not
n politically feasible,
f
Coro will be obliged to consider llegal action aggainst the provvince of Mendooza and
certain ind
dividuals for daamages suffered
d as a result off the unlawful aactions of Auggust 2011. In aaddition, the 77722 law
that requireed ratification and banned th
he use of sulphu
uric acid in M endoza continuues to be subjeect to legal chaallenges
of its consttitutionality by
y Coro and several other partiies. The legal challenges conntinue to makee its their way tthrough
the judiciaal system in Mendoza
M
and the Company
y is still hopefful this law m
may be modifi
fied or deemedd to be
unconstituttional before year
y end, which
h may provide another avenuee to advance thhe San Jorge prroject.
Corporatee:
As of Junee 30, 2012, the Company had cash and cash equivalents off $7.9 million.
4
Q2 2012
2
FINANC
CIAL POSIT
TION REVIE
EW
4.1 Cash
h and Working
g Capital
Table 7: - Cash
C
and Work
king Capital ($0
000’s)
Cash and caash equivalents
AR and prep
paids
Investmentss
AP and accrruals
Net working
g capital
June 30, 20012
7,8868
43
27
(6330)
7,3308
Dec 311, 2011
11,965
76
479
(519)
12,001
The Comp
pany’s working
g capital positiion decreased from Decemb er 2011 princiipally as a resuult of the Com
mpany’s
exploration
n programs in
n Chile, this was
w partially offset
o
by the pproceeds from
m sale of 391,153 shares inn Levon
Resources Ltd, (“Levon””) of $CA0.4 million
m
at an aveerage price of C
CA$0.98.
Investmentts decreased ass a result of th
he sale of the aforementioned
a
d Levon shares. The Compaany continues to hold
152,632 sh
hares in Bearing Resources Lttd (“Bearing”).
The Comp
pany’s working
g capital requirrements for th
he next twelve months will bbe determined by the successs of its
exploration
n programs and the ability to
o advance San
n Jorge and theerefore it is diifficult to deterrmine the Com
mpany’s
exact work
king capital req
quirements. Th
he cash on hand
d, as of June 300, 2012, leavess the Companyy funded to achhieve its
remaining corporate objeectives in 2012.
.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 10
4.2
Otheer Assets and Liabilities
Table 8: -O
Other Assets and
d Liabilities ($0
000’s)
Property, plant and equipmeent
Mineral pro
operty interests
Total other assets
Total Assetss
June 30, 2012
638
28,073
27
28,738
Dec 31, 2011
629
27,115
27,744
40,264
Mineral prroperty interestts are compriseed of the capittalized developpment costs asssociated with the San Jorge project
(section 2.5
5).
Total assetts of Coro as at
a June 30, 2012 were $36.7
7 million (Dec 31, 2011: $400.3m) and totaal liabilities weere $0.6
million (Dec 31, 2011: $0
0.5m).
4.3
Equ
uity and Finan
ncings
Table 9: - Shareholders’
S
Equity
E
($000’s)
Common sh
hares
Contributed
d surplus
Accumulateed other compreh
hensive income
Deficit
Total shareh
holders’ equity
June 30, 2012
511,657
44,733
359
(20,,730)
366,019
Dec 331, 2011
51,650
3,986
342
(16,233)
39,745
The movem
ment in Deficitt and Accumulated other com
mprehensive inccome are explaained in sectionn 5.
Equity insstruments
Table 10: - Equity Instrum
ments
Common sh
hares outstanding
g
Options outstanding
Numberr
Weighteed average pricee
Warrants ou
utstanding
Numberr
Weighteed average pricee
Market capiitalization ($000
0’s)
Closing share price
June 300, 2012
138,293,934
Dec 31, 2011
138,268,934
11,740,000
CA
A$0.61
7,728,333
C
CA$0.74
-
2,777,777
C
CA$0.65
CA$37,339
CA
A$0.27
CA
A$47,011
C
CA$0.34
As of Aug
gust 1, 2012 the
t Company had 138,293,9
934 shares outtstanding. In M
March 2012, tthe Company granted
4,095,000 options at an exercise pricee of CA$0.41. A further 1000,000 optionss were grantedd in June 2012 at an
exercise prrice of CA$0.30. The 2.7 milllion warrants as of Decembeer 31, 2011 exppired unexercissed on June 300, 2012.
The follow
wing table show
ws the significant financings of the Compaany over the laast three years and the intendded and
actual use of the proceeds from these financings.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 11
Table 11: - Use of Proceed
ds Table
Shares
Description
n
(000’s)
Jan 09 - Uniit Issuance
27,273
Feb09 - Uniit Issuance
13,636
Oct 09 - Waarrant Exercise
5,000
Price
CA$
$0.11
$0.11
$0.18
Net Proceeds
P
(US$000’s)
2,393
1,197
845
Dec 09 - Waarrant Exercise
Jun 10 – Un
nit Issuance
$0.18
$0.36
951
$4,203
4.4
5,600
12,500
Intended Use
Working cappital
Working cappital
W
Working capital & Llancahue drillling
W
Working Capital iincluding advanccing
San Joorge
San Jorge Payment and working cappital
Acttual Use
As iintended
As iintended
As iintended
As iintended
As iintended
Con
ntractual Obliigations
The follow
wing table show
ws the contracctual obligations of the Com
mpany includinng property opptions paymennts as at
June 30, 20
012:
Table 12: - Contractual
C
Obligations as of June
J
30, 2012
($000’s)
Operating lea
ases
Property Opttion Payments (section
(
4.4.1)
San Jo
orge1,2
Berta
El Desesperado1
Total
1
2
2012
(paid)
2012
20113
2014
68
68
136
23
Thereafter
-
800
200
1,068
5,000
5,068
4,,250
1,,500
500
6,,386
3,500
1,300
4,823
3,000
3,000
Total
227
9,250
5,800
5,000
20,277
Excludes royaalty payments and nett profit interests.
In February 20
012, the acquisition terms
t
on San Jorge were
w revised but weree not finalized and thherefore the previous acquisition costs aree reflected in this tablle.
As of Junee 30, 2012 the Company
C
had no
n significant commitments
c
ffor capital expeenditures.
4.4.1 Prop
perty Option Payments
P
San Jorge:
In Februarry 2012, the Co
ompany signed
d a non-binding
g memorandum
m of understannding to amendd the terms of the San
Jorge Purcchase Agreement. The amend
ded terms replaace all of the exxisting obligatiions under the previous agreeements.
The amend
ded terms requ
uire annual pay
yments of $1.2
25 million, forr 10 years, payyable quarterlyy, commencingg in the
quarter end
ding March 31
1, 2012. In add
dition a 7.5% net
n smelter royyalty (“NSR”) payable on alll gold produceed from
the propertty. The annual payments are not payable when
w
that paym
ment is exceedeed by the gold NSR paymentt. Coro
may at any
y time, prepay the outstandin
ng amount with
h a one-time paayment equal tto the net preseent value of thee future
payments, using a 5% diiscount rate. No
N other consiideration, obliggations, paymeents, or royaltiies are due, annd Coro
may withd
draw from the Agreement
A
at any
a time by nott making the duue payments.
As of Aug
gust 1, the docu
umentation of these revised terms was nott finalized, andd Franco Nevadda has agreed to defer
the first qu
uarterly paymen
nt until the sign
ning of the deffinite agreemennt.
Under the previous agreeements, the Company had paiid $7.5 millionn and had a furrther $10 millioon payable ($55 million
in May 2012, and $5 milllion May 2013
3), less the agg
gregate value oof the 1,000,0000 common shaares of Coro thhat were
previously issued. $16 million
m
of the above paymen
nts above wouuld have beenn treated as ann advance paym
ment on
either: (a) the existing obligation
o
to pay
p $0.02 per pound on thee mineable prooven and probbable copper ssulphide
reserves up
pon commenceement of comm
mercial producttion or (b) the existing obligaation to pay $00.025 per pounnd on the
mineable proven
p
and pro
obable heap leeachable copper reserves uppon commenceement of comm
mercial producction. In
addition, Coro
C
had also agreed to pay a net smelter return producttion royalty off 1.5% on all nnon-copper prooduction
from produ
ucts produced at
a the San Jorg
ge project. For any productionn of copper in excess of that derived from the total
mineable, proven and pro
obable heap leeachable reserv
ves and the miineable, provenn and probablee sulphide reseerves the
Company agreed to pay (i) $0.015 perr pound of cop
pper containedd in ore processsed by a mill, in excess of tthe total
pounds of copper contain
ned in the mineeable, proven and
a probable suulphide reservees and (ii) $0.002 per pound of copper
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 12
contained in
i ore placed on
o leach pads, in excess of th
he total poundds of copper coontained in the mineable, prooven and
probable heap
h
leachable reserves.
r
Berta:
In June 2011, the Compaany entered into an agreemen
nt to acquire a 100% interest in a 506 hectaare portion of thhe Berta
property fo
or a total of $6
6 million by making
m
the following staged option paymeents; $1.0 milllion (paid); 24 months
from signin
ng: $1.5 millio
on; 36 months from
f
signing: $3.5
$
million. Inn addition, a 1.5% NSR is paayable on any ssulphide
copper pro
oduction togeth
her with any by
y-product metalls.
El Tapao:
In May 2011, the Compaany entered into an agreemen
nt to acquire a 100% interest in the El Tapaao property by making
four annuaal payments of
o $25,000 ($2
25,000 paid), followed by a final paymeent of $1.0 m
million. The Ell Tapao
agreement was terminated in April 2012
2.
El Desespeerado:
In Februarry 2012, the Co
ompany entereed into an optio
on agreement tto acquire the El Desesperaddo property forr a total
of $13 milllion by makin
ng the followin
ng option paym
ments; On signiing: $0.2 milliion (paid); 12 months from ssigning:
$0.5 millio
on; 24 monthss from signing
g: $1.3 million
n; 36 months from signing: $3 million; and 48 monthhs from
signing: $8
8 million. In addition,
a
a 1.9%
% sales royaltty is payable oon any producction from the property, overr which
Coro has a first right of refusal.
5
Q2 2012
2
EXPEN
NDITURES REVIEW
R
The follow
wing table detaiils the Compan
ny’s expenditurres by quarter aand YTD.
Table 13: ($
$000’s)
Expenditurres summary
Net Sales
Exploration
n costs (section 5.1)
Other Expen
nses (section 5.2
2)
Loss beforee tax and equity
y earnings
Deferred inccome tax (recovery) expense
Equity loss & dilution gainss
Loss (Earnings)
Other Comp
prehensive Loss (Income)
Comprehen
nsive Loss (Inco
ome)
Basic loss (eearnings) per shaare
Fully diluted
d loss (earnings)) per share
Q310
Q
Q410 Q111
Quartterly
Q211 Q311 Q411 Q112 Q212
2010
YTD
20111
2012
115
337
245
99 (11,861) 2,549
1,278 1,028
809 1,114
455
291
872 2,408
799
418
598 1,5233 3,280
667 3,3588 1,217
214 (11,524) 2,794
276 (281)
(146) (1,196)
-
2,087 2,142
-
746 1,671 2,826
-
1,265 4,8811 4,497
- (281)
732
-
68 (12,444) 2,513
2,087 2,142
746 1,671 2,826
1,997 4,6000 4,497
(174) 1,214 (527) (224)
207
1,913 3,356
219 1,447 3,033
159 (697) (17)
2,156 3,9033 4,480
$0.06 $0.02 $0.06 $0.01 $0.02
$0.06 $0.02 $0.06 $0.01 $0.02
$0.01 $0.066 $0.03
$0.01 $0.066 $0.03
53
(225) (523)
121 (12,669) 1,990
$0.00
$
$0.00
$
$(0.13) $0.02
$(0.11) $0.02
As the Co
ompany is in the
t exploration
n and development stage it has no sales or revenues. Deferred incoome tax
expense in
n Q4 2010 arosse as a result of treating the Company’s
C
invvestment in Vaalley High as hheld-for-tradingg rather
than equity
y accounting for
f the investm
ment. In Q1 2011, the decreease in the fairr value of the Company’s held-fortrading seccurities combin
ned with the ad
dditional tax lo
osses generatedd in Q1 2011, rresulted in the reversal of thee future
income tax
x liability and the
t recognition
n of a future inccome tax recovvery in Q1 2011.
Equity and
d dilution losses (gains) repreesented the Com
mpany’s share of the losses fr
from Valley Hiigh and dilutionn losses
(gains) as a result of Vaalley High issu
uing more com
mmon shares. T
The increase inn equity lossess is due the inncreased
activity at the Valley Hig
gh’s Cordero property
p
after th
he discovery hhole in 2009. N
No equity earniings or dilutionn losses
were recog
gnized in Q1 2011,
2
as a ressult of the disp
position in Q44 2010 which caused a channge in the accounting
treatment of
o the Company’s investmentt from equity accounting
a
to hheld for tradingg.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 13
Other com
mprehensive inccome principallly arises from
m converting thhe Company’s Canadian funcctionally denom
minated
balance sheet into the U.S
S. dollar reportting currency.
5.1
Ex
xploration cossts
The follow
wing table sum
mmarizes the quarter by quarter
q
expendditures and YT
TD expendituures on the Company’s
exploration
n properties in Chile.
Table 14: ($
$000’s)
Exploration
n Chile
Consult, lab
b & prof.
Drilling & trenching
t
General & admin
a
costs
Property inv
vestigations
Property acq
quisition
Travel & acccommodation
Total explo
oration costs
By Project:
Berta (sectio
on 2.2)
Chacay (secction 2.4)
Flores
Llancahue
El Desesperrado
Other
Total explo
oration costs
Quarterly
Q310 Q410
Q
Q111 Q211
Q
Q311 Q
Q411
61
91
63
84
50
135
158
41
605
617 (53)
31
42
88
256
212
177
17
25
39
83
131
170
225
1
5
20
14
25
18
25
114
337
245 1,278 1,028
455
26
17
4
231
25
1
108
13
-
200
732
34
10
486
297
(2)
-
165
(10)
1
68
115
79
337
124
302
247
245 1,278 1,028
299
455
Q112
109
277
88
173
200
25
872
Q212
220
879
288
199
800
22
2,408
20100
1011
677
1266
2333
488
233
5988
YTD
2011
147
647
344
122
225
39
1,523
2012
329
1,156
376
372
1,000
47
3,280
441
48
12
230
141
872
2,005
6
12
24
361
2,408
3166
866
100
1855
5988
200
840
47
10
426
1,523
2,446
54
24
254
502
3,280
Drilling co
osts in Q1 and Q2 2012 relatee to the drill prrogram at Bertta (section 2.2)). Q4 2011 drillling relates to a short
drill progrram (3 holes, 458
4 metres) att the El Tapao
o prospect whhich did not yiield any signifficant results aand has
subsequenttly been dropp
ped. These costts were offset by
b the reversall of an accruall for Chacay drrilling from Q3 2011.
The Q3 20
011 drilling relates to the 24
4 hole (4,360m
m) reverse drilll circulation pprogram underttaken at Berta. In Q2
2011, the Company
C
initiaated a 4 hole 1,975 meter diaamond drilling program at Chhacay (completed July 2011)), which
explains th
he higher drilliing & trenching costs, and prroperty investiigations costs iin Q2 2011. Inn December 20010 and
January 20
011, the Compaany completed a 2,424 meter RC drill progrram at Chacay,, resulting in hhigher drill costts in Q1
2011 and Q4
Q 2010.
General & administration
n costs include a portion of alll administrativve costs of runnning the Comppany’s Santiagoo office
and a prov
vision for Chillean Value Ad
dded Taxes (“IIVA”). In Chiile, IVA is nott refundable inn cash and is applied
against oth
her IVA credits. The increasse in Q2 2011, Q3 2011 andd Q2 2012 is ddue to the provvision for IVA
A on the
increased drilling
d
program
ms in the respeective quarters..
The properrty acquisition
n costs in Q2 2011
2
comprisee $200,000 in ooption paymennts for Berta aand $25,000 inn option
payments for El Tapao. Q1 2012 acq
quisition costs relate to the ppayment madee on signing oof the El Desessperado
option agreeement, while the Q2 2012 paayment relates to the second installment onn the Berta propperty.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 14
5.2
Otther Expensess
The follow
wing table detaiils the Compan
ny’s expenditurres by quarter aand YTD.
Quarrterly
Q410 Q111 Q2111 Q311 Q4111 Q112 Q2122
Table 15:
Expenditurres summary ($
$000’s)
Q310
Other Expen
nses
Depreciation
n and amortizatiion
Finance inco
ome
Foreign excchange loss (gain
n)
Legal and fiiling fees
Other corpo
orate costs
Realized gain on disposal
Salaries & management
m
fees
Share-based
d expense
Unrealized loss
l
(gain) on heeld-for-trading
5
5
3
(5)
(3
3) (21)
1
77
124
45
9
50
112
102
48
2) (4,805)
- (4,712
143
148
200
43
56
871
3) 6,064
(245) (7,543
99 (11,861
1) 2,534
9
3
7
(300) (23) (288)
9 1 (328)
2344
522
13
(1)
1044
118
877
- (8177)
2066
148
1677
26 1
66
3466
13 1 1,117
2966
8244 1,114
2911
6
7
(18) (28)
69 (1022)
48
199
75
622
(252)
1
192
1911
380
2400
299
288
799
4188
2010
YTD
20111
2012
10
122
13
(4) (51) (46)
(7)
2155 (33)
68
1022
67
98
1522
137
- (4,805) (251)
146
4066
383
119 1,1322
620
238 6,1955
327
668 3,3588 1,217
Finance income is comprrised of interesst income on caash and cash eequivalents. Fooreign exchangge losses are atttributed
to exchang
ge rate movem
ments on the Company’s funcctional currenccy, which is thhe U.S. dollar except for thee Parent
Company’s which is funcctionally Canad
dian.
Foreign ex
xchange loss (g
gain) are driveen by U.S. dolllar holding in the Canadian Parent Company, and Chileean and
Argentine Pesos balancess in our functio
onally denomin
nated U.S. dolllar subsidiariess and vary withh the depreciattion and
appreciatio
on of these currrencies.
Legal and filing fees are higher in the first
f
half of each year as a reesult of annuall listing fees, aand legal & reggulatory
costs assocciated with the annual generaal meeting.
Other corp
porate costs in Q3
Q 2010, Q4 2010
2
and Q2 20
011 were higheer due to professional advisorry fees.
In Q4 2010, the Compan
ny disposed of 5,850,000 co
ommon shares of Valley Higgh at a price oof CA$1.10 foor gross
proceeds of
o CA$6,435,00
00. In Q1 2011, 2,069,300 Valley High sshares were solld at CA$1.81 for gross procceeds of
CA$3.7 miillion and the warrants
w
were sold
s
for gross proceeds
p
of CA
A$1.7 million. In Q4 2011, tthe Company received
gross procceeds of CA$1.1 million from
m the disposittion of 829,9000 Levon sharees (Levon acqquired Valley H
High in
March 201
11) at an averag
ge price of CA
A$1.34. In Q1 2012, the Com
mpany disposedd of the remainning Levon Shares for
gross proceeeds of CA$0.4
4 million at an average price of CA$0.98.
Salaries an
nd managemen
nt fees were low
wer in Q2 2010
0 as a result off certain officeers reducing theeir fees in an eeffort to
preserve th
he Company’ss treasury durin
ng the recession. Share-bassed expense reelates to stockk-based compeensation
expenses associated
a
with
h option grantss. In Q1 2011
1 the Companyy granted a traanche of options at CA$1.455 which
explains th
he increase in Q1
Q 2011.
The unreallized loss in Q1
Q 2011 repressents the reverrsal of the preevious periods’’ unrealized gaains. In Q4 20010, the
unrealized gain resulted from the chang
ge in accountin
ng practice froom equity accoounting to fair value. The losss in Q3
2011 throu
ugh Q1 2012 iss principally du
ue to the decreaase in the pricee of the Levon shares.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 15
5.3
Reelated Party Disclosure:
D
The Company considers the Executive Directors and Officers
O
of thee Company to bbe key manageement personneel.
Table 16- Key Management Personnel
Compensatio
on
Short-term em
mployee benefits
Share-based payments
p
Total
6
Three month
hs
ended June 300,
201 2
2544
16 5
41 9
Three moonths
Six m
months
Sixx months
ended Jun
ne 30, ended Ju
une 30, ended JJune 30,
2011
2012
2011
244
513
454
213
460
839
457
973
1,293
RIS
SKS AND CR
RITICAL AC
CCOUNTIN
NG ESTIMA TES & POL
LICIES
For a full veersion of the crritical accountiing estimates and
a policies refference shouldd be made to thhe Company’s audited
financial staatements for the
t year ended
d December 31,
3 2011, whiich are availaable on the Company’s webbsite at
www.corom
mining.com. In
n addition, refe
ference should be made to thhe most recenntly filed Annuual Informationn Form
available on SEDAR at ww
ww.sedar.com.
6.1
Diisclosure Conttrols and Internal Control Financial
F
Rep
porting
The Compan
ny’s disclosure controls and
d procedures are
a designed tto provide reaasonable assuraance that all rrelevant
information is communicatted to senior management,
m
to allow timely ddecisions regarrding required disclosure.
Internal control over finan
ncial reporting
g is designed to
t provide reassonable assuraance regardingg the reliabilityy of the
Company’s financial reporrting and the preparation
p
of financial stateements in comppliance with Innternational Fiinancial
Reporting Standards
S
(“IF
FRS”). The Company’s
C
internal control over financiaal reporting inncludes policiies and
procedures th
hat:
• pertaiin to the mainteenance of recorrds that accuraately and fairly reflect the trannsactions of the Company;
• proviide reasonablee assurance thaat transactionss are recordedd as necessary to permit preeparation of fiinancial
statemeents in accordaance with IFRS
S;
• ensure the Company
y’s receipts and
d expendituress are made onlyy in accordancee with authorizzation of manaagement
and thee Company’s directors; and
• provide reasonable assurance regarding preventtion or timely detection of uunauthorized trransactions thaat could
have a material effectt on the annual or interim finaancial statemennts.
Management has concludeed that, as at Ju
une 30, 2012, the
t Company‘ s internal conttrol over financcial reporting w
was not
effective duee to the existen
nce of a materiaal weakness. A material weakkness existed iin the design of internal contrrol over
financial rep
porting caused by
b a lack of ad
dequate segregaation of duties in the financiaal close processs. The Chief Fiinancial
Officer is reesponsible for preparing,
p
auth
horizing, and reviewing
r
inforrmation that iss key to the prreparation of fi
financial
reports. He is also respon
nsible for prep
paring and rev
viewing the reesulting financcial reports. Thhis weakness has the
potential to result
r
in materiial misstatemen
nts in the Com
mpany’s financiial statements.
Management has concludeed, and the au
udit committeee has agreed tthat taking intto account thee present stagee of the
Company's development,
d
the
t Company does
d
not have sufficient size and scale to w
warrant the hirring of additionnal staff
to correct thee weakness at this
t time.
There were no
n changes in the Company’s internal con
ntrols over finaancial reportingg during the quuarter ended JJune 30,
2012 that haave materially affected, or are
a reasonably
y likely to matterially affect, its internal coontrols over fiinancial
reporting.
The Compan
ny’s managem
ment, including
g the Chief Ex
xecutive Officcer and Chief Financial Offiicer, believe thhat any
disclosure controls and prrocedures or in
nternal control over financiial reporting, nno matter how
w well conceivved and
operated, caan provide only
y reasonable and
a not absolu
ute assurance th
that the objectiives of the conntrol system aare met.
Further, the design of a co
ontrol system reflects the factt that there aree resource consstraints, and thhe benefits of ccontrols
must be con
nsidered relativ
ve to their costs. Because of
o the inherennt limitations iin all control systems, they cannot
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 16
provide abso
olute assurancce that all con
ntrol issues an
nd instances o f fraud, if anyy, within the Company havve been
prevented orr detected. Theese inherent lim
mitations includ
de the realitiess that judgmentts in decision-m
making can bee faulty,
and that breaakdowns can occur
o
because of simple error or mistake. A
Additionally, ccontrols can bee circumventedd by the
individual accts of some peersons, by collu
usion of two or
o more peoplee, or by unauthhorized overridde of the contrrol. The
design of an
ny systems of controls
c
also iss based in part upon certain aassumptions abbout the likelihhood of future events,
and there caan be no assurrance that any
y design will succeed
s
in achhieving its statted goals undeer all potentiall future
conditions. Accordingly,
A
because
b
of the inherent limittations in a coost effective coontrol system, misstatementss due to
error or fraud
d may occur an
nd not be deteccted.
6.2
Fo
orward Looking Statementss
Certain stateements includeed in this “MD
D&A” constitutte forward-lookking statementts, including thhose identifiedd by the
expressions “anticipate”, “believe”,
“
“plan
n”, “estimate”,, “expect”, “inttend”, “may”, “should” and similar expresssions to
the extent th
hey relate to th
he Company orr its managem
ment. The forwaard-looking staatements are nnot historical faacts but
reflect curren
nt expectationss regarding futture results or events.
e
This M
MD&A containss forward-lookking statementss. These
forward-look
king statementts are based on
o current exp
pectations and various estim
mates, factors and assumptioons and
involve know
wn and unknow
wn risks, uncerrtainties and oth
her factors.
Information concerning the interpretation
n of drill resullts also may b e considered fforward-lookinng statements, as such
information constitutes a prediction of what mineralization might bbe found to bbe present if aand when a prroject is
actually dev
veloped. The estimates,
e
risks and uncertaiinties describeed in this MD
D&A are not nnecessarily alll of the
important faactors that coulld cause actuall results to diff
ffer materially from those exxpressed in the Company’s foorwardlooking stateements. In addition, any forw
ward-looking sttatements repreesent the Comp
mpany’s estimattes only as of tthe date
of this MD&
&A and should
d not be relied upon
u
as repressenting the Com
mpany’s estim
mates as of any subsequent daate. The
material facttors and assum
mptions that weere applied in making the foorward-lookingg statements in this MD&A iinclude:
(a) execution
n of the Comp
pany’s existing plans or explo
oration program
ms for each off its properties, either of whiich may
change due to changes in the views of the
t Company, or if new infoormation arisess which makess it prudent to change
such plans or
o programs; an
nd (b) the accu
uracy of curren
nt interpretatioon of drill and other exploratiion results, sinnce new
information or new interp
pretation of ex
xisting inform
mation may ressult in changees in the Com
mpany’s expecctations.
Readers sho
ould not place undue reliancce on the Com
mpany’s forwaard-looking staatements, as thhe Company’ss actual
results, perfformance or acchievements may
m differ matterially from aany future ressults, performaance or achievvements
expressed orr implied by such
s
forward-looking statem
ments if knownn or unknown risks, uncertaiinties or other factors
affect the Company’s
C
bu
usiness, or if the
t Company’’s estimates oor assumptionss prove inacccurate. Therefoore, the
Company caannot provide any
a assurance that
t forward-lo
ooking statemennts will materiialize.
6.3
Otther Risks
Reference should be mad
de to the Com
mpany’s risks and critical aaccounting pollicies and praactices section of the
December 31, 2011, Management Discusssion and Analysis for a compplete discussioon on the risk ffactors associatted with
Nature of Operations;
O
Environmenta
E
al Permitting at San Jorgee; Foreign Poolitical Risk; Governmentt Laws,
Regulation & Permittin
ng; Estimates of Mineral Resources; K
Key Managem
ment and Coompetition; T
Title to
Properties; Commodity Prices;
P
Foreign
n Currency Risk;
R
amongst oother things.
6.4
Crritical Accoun
nting Policies
Reference should be mad
de to the Com
mpany’s risks and critical aaccounting pollicies and praactices section of the
December 31, 2011, Management Discusssion and Anallysis for a comp
mplete discussioon on the critical accounting ppolicies
associated with
w
Foreign currency translation; Inveestments in aassociates; Exxploration and
d Evaluation Costs;
Asset impaiirment; Recen
nt Accounting Pronouncemeents; amongst other things
6.5
NII 43-101 Comp
pliance Requiirements
Under Natio
onal Instrumentt 43-101 Stand
dards of Disclo
osure for Minerral Projects (“N
NI 43-101”), iff an issuer discclosures
in writing sccientific or tech
hnical informattion about a miineral project oon a property m
material to the iissuer, the issuuer must
include in th
he written discllosure the name and the relatiionship to the iissuer of the quualified personn who: (a) preppared or
supervised th
he preparation of the informaation that form
ms the basis forr the written disclosure or (b)) approved the written
disclosure. For
F the purposes of this MD&
&A, Alan Step
phens, FIMMM
M, President annd CEO of the Company, a geeologist
with more th
han 36 years of experience iss the Qualified
d Person for thee purposes of N
NI 43-101 hass approved the written
disclosure in
n this MD&A. This MD&A
A references a number of pprevious new rreleases in resspect of discloosure of
technical maatters relating to
t mineral prop
perties and refeerence should bbe made to theese news releasses to fully undderstand
these referen
nces.
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 17
7
SUMMAR
RY OF FINA
ANCIAL PER
RFORMANC
CE AND FIN
NANCIAL PO
OSITION
(Unaudited
d)
Summaary of Financiaal Performance
Qu
uarterly
Taable 17: ($000’s))
YTD
Q31
10
Q410
Q111
Q21 1
Q311
Q
Q411
Q112
Q212
2011
2012
-
-
-
-
-
-
-
-
-
-
62
6
31
3
17
1
5
11
15
Neet Revenues
Exxploration Expeenditures
C
Consulting, lab.&
& prof. fees
D
Drilling and tren
nching
G
General & admin costs
P
Property investig
gations
P
Property acquisiition costs
T
Travel & accomm
modation
Tootal Exploration
n Costs
Coorporate and Otther Costs
Depreciation & amortization
Finance income
Foreign exchang
ge loss (gain)
Legal and filing
g fees
Other corporate costs
Realized gain on
n disposal
Salaries and man
nagement fees
Stock-based pay
yments expense
U
Unrealized gain on held-for-trad
ding
Tootal Corporate & Other
91
158
42
25
20
337
63
41
88
39
14
245
844
6055
2566
833
2255
255
1,2788
50
617
212
131
18
1,028
135
(53)
177
170
1
25
455
109
277
88
173
200
25
872
220
879
288
199
800
22
2,408
147
647
344
122
225
39
11,523
329
1,156
376
372
1,000
47
3,280
5
5
(5
5)
(3)
1
77
45
4
9
11
12
102
- (4,712)
14
43
148
43
4
56
(245
5) (7,543)
99
9 (11,861)
3
(21)
124
50
81
(4
4,805)
166
871
6,065
2,534
9
(300)
91
522
12 1
1755
26 1
1300
8099
3
(23)
(328)
13
118
148
66
1,117
1,114
7
(28)
234
(1)
87
((817)
167
346
296
291
6
(17)
70
47
75
(253)
192
380
299
799
7
(28)
(102)
19
62
1
191
240
28
418
12
(51)
215
102
152
(4,805)
406
11,132
66,195
33,358
13
(46)
(33)
67
137
(251)
383
620
327
1,217
Eaarnings before tax
t & equity earrnings
Future income tax (expense)
Equity earnings and dilution gaiins
21
14 (11,524)
276
(146
6) (1,196)
2,779
(281)
-
2,0877
-
2,142
-
746
-
1,670
-
2,826
-
44,881
((281)
-
4,497
-
68
6 (12,444)
53
5
(225)
12
21 (12,669)
2,498
(524)
1,974
2,0877
(1744)
1,9133
2,142
1,214
3,356
746
((527)
219
1,670
(224)
1,446
2,826
207
3,033
44,600
((697)
33,903
4,497
(17)
4,480
Looss (earnings)
Other Compreheensive Income
Coomprehensive Loss
L
(income)
Baasic loss (earning
gs) per share
Fully diluted loss (earnings)
(
per sh
hare
$0.0
00
$0.0
00
$(0.13)
$(0.11)
$0.02
$0.02
$0.0 1
$0.0 1
$0.02
$0.02
$$0.00
$$0.00
$0.01
$0.01
$0.02
$0.02
$$0.03
$$0.03
$0.03
$0.03
26
2
17
1
4
85
8
11
15
231
25
1
106
337
108
13
124
245
2000
7322
344
100
3266
1,2788
485
297
(2)
246
1,028
165
(10)
1
299
455
442
47
12
230
141
872
2,005
6
12
24
361
2,408
200
840
47
10
426
11,523
2,446
54
24
254
502
3,280
Exp
ploration Expeenditures by project
p
Ch
hile:
Berta
Chacay
Flores
Llancahue
o
El Desesperado
Other
Tootal exploration
Q2 2012 MD&A (expressed in U.S. Dollars)
TSX Symbol: COP
Page| 18
Taable 18: ($000’s))
Sum
mmary of Financcial Position
Q111
Q2111
Q311
Q310
Q410
2,617
43
2,661
628
19,427
2,205
1,040
5,550
3,842
6,619
171
1,805
24,521
7,985
84
8,979
17,048
625
20,109
2,211
1,409
5,763
3,934
6,619
173
37,782
118,838
100
2,424
221,362
649
220,729
2,211
1,563
5,900
3,992
6,619
445
442,740
15,1116
668
2,3004
17,4888
6445
25,4993
2,2111
1,7999
6,2007
4,1221
10,6119
5337
43,6226
544
544
579
276
855
401
401
Sharreholders’ Equity
Common sharess
Contributed surp
plus
A
AOCI
Deficit
Totaal Shareholderss’ Equity
Totaal Liabilities an
nd Equity
41,827
3,246
106
(21,204)
23,976
24,519
42,090
3,266
331
(8,760)
36,927
37,782
Weighted average # of shares (000’ss)
Worrking Capital
104,275
2,117
99,094
16,192
Fin
nancial Position
n
Assets
Cash and cash equivalents
e
A
AR and prepaids
Other current asssets
Total Current Assets
A
Property, plant and
a equipment
Mineral property
y interests
Engineeriing
Environmental & permittiing
General & administration
n
Geology
Property acquisition
a
costss
Share-bassed compensation
Other assets
Tootal Assets
Liaabilities
A
AP and accrued liabilities
Deferred incomee tax liability
Q411
Q1112
Q212
12,017
57
1,028
13,102
650
26,336
2,301
2,021
6,572
4,202
10,619
622
40,088
11,965
76
479
12,520
629
27,115
2,543
2,195
6,739
4,310
10,619
710
40,264
10,9971
91
58
11,120
6630
27,7719
2,6642
2,2251
6,9984
4,4426
10,6619
7797
39,4469
7,868
43
27
7,938
638
28,073
2,654
2,352
7,179
4,487
10,619
838
36,649
9669
9669
586
586
519
519
7704
7704
630
630
449,630
3,112
855
(1 1,258)
442,339
442,740
51,8000
3,1889
1,0228
(13,3600)
42,6557
43,6226
51,897
3,281
(185)
(15,491)
39,502
40,088
51,650
3,986
342
((16,233)
39,745
40,264
51,6650
4,4452
5566
(17,9903)
38,7765
39,4469
51,657
4,733
359
(20,730)
36,019
36,649
1228,830
220,912
135,6226
16,5119
137,874
11,488
135,170
12,001
138,2269
10,4416
138,271
7,308
Taable 19: Selected
d Annual Inform
mation
Neet sales or revenu
ues
Earrnings (loss) beffore discontinued
d operations
Earrnings (loss) beffore discontinued
d operations per-share
Earrnings (loss) beffore discontinued
d operations dilu
uted per-share
Neet earnings (loss))
Neet earnings (loss)) per-share
Neet earnings (loss)) diluted per-sharre
Tootal assets
Tootal long-term fin
nancial liabilitiess
Caash dividends decclared
Q2 2012 MD&A (expressed in U.S. Dollars)
22010
10,,709
00.11
00.09
10,,709
00.11
00.09
37,,782
-
TSX Symbol: COP
20111
(7,4662)
(0.006)
(0.006)
(7,4662)
(0.006)
(0.006)
40,2664
-
2012
(YTD)
(4,497)
(0.03)
(0.03)
(4,497)
(0.03)
(0.03)
36,649
-
Page| 19