VANCOUVER, BRITISH COLUMBIA–(Marketwired – March 31, 2014) – Oroco Resource Corp. (TSX VENTURE:OCO) (“Oroco“) advises that Sonoran Resources LLC. and its Mexican subsidiary, SR Servicios Mineros, S.A. de C.V. ( jointly, “Sonoran“), have filed a lawsuit in Arizona against Oroco, Minas de Oroco Resources, S.A. de C.V. (“MOR“), and Goldgroup Mining Inc. (“Goldgroup“) arising from events and services related to the engineering, procurement and construction management agreement (“EPCM Agreement“) and related service agreements (the jointly, the “Sonoran Contracts“) between Oroco, Minas de Oroco and Sonoran in regard to the mine construction at Cerro Prieto, Sonora State, Mexico (the “Cerro Prieto Property“). In August of 2013, Oroco sold MOR, the owner of the Cerro Prieto Property, to Goldgroup.
In its claim, Sonoran alleges that Oroco (1) breached the Sonoran Contracts; (2) breached its duty of good faith under the Sonoran Contracts; and (3) made fraudulent and/or negligent misrepresentations which harmed Sonoran. Sonoran is seeking damages in an amount to be determined at trial, but claimed to be in excess of US$3,000,000, being the fees claimed to be payable to Sonoran pursuant to the Sonoran Contracts if they had been carried out, inclusive of a net amount of $177,066.43 in unpaid invoices, and 250,000 common shares of Oroco.
Further, Sonoran has also claimed that Goldgroup breached the Sonoran Contracts, to which Goldgroup was not a party, and that it intentionally interfered with Sonoran’s business expectations, causing the loss of at least US$3,000,000 of net profits from the fees claimed to be payable pursuant to the Sonoran Contracts if they had been carried out. As a part of the sale of the Cerro Prieto Property, Oroco agreed to indemnify and defend Goldgroup and Minas de Oroco against all claims brought by Sonoran arising from the events or services related to the Sonoran Contracts. It is Goldgroup’s and Oroco’s opinion that the claims against Goldgroup are completely without merit.
Oroco’s President Craig Dalziel had the following comments as to the merits of the Sonoran claims: “This suit is about Sonoran trying to force Oroco to pay unsupported, last minute invoices. After an unfortunate series of events which included the discovery of substantial double billings by Sonoran, baseless severance pay claims, competency concerns relating to Sonoran’s planning and engineering functions, and conspicuous timing in the rendering of those post-closing invoices, Oroco sought a detailed justification of them, which request was effectively denied. In the alternative, Sonoran has chosen a tact of legal bluster intended to advance their unwarranted claims. We have no doubt as to the strength of Oroco’s position in this matter.”
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
- Oroco Resource Corp.
Mr. Craig Dalziel
President and CEO