Oroco Signs Indicative Term Sheet For Cerro Prieto Construction Financing

VANCOUVER, British Columbia – (June 17, 2011) Oroco Resource Corp. (TSX-V: OCO) (“Oroco” or “the Company”) is pleased to announce that it has entered into an Indicative Term Sheet with a New York-based, private institutional investor in regard to a US$18 million gold prepayment agreement.  Under the terms of the Indicative Term Sheet:

1.   Net proceeds from the prepayment agreement, after deduction of a 3% fee, are to be used to develop the Cerro Prieto Oxide Gold Project in Sonora State, Mexico;

2.   The US$18 million prepayment is to be satisfied by the delivery by Oroco of 21,000 ounces of gold to the lender over a period of 36 months following closing.  Additionally, Oroco is to grant to the lender a series of warrants entitling the lender to purchase up to 8,400 ounces of gold from Oroco at a price of US$1,550 per troy ounce over the 24 month period beginning two years after closing; and

3.   Funding under the agreement will be subject to completion of legal documentation, receipt of regulatory approvals, including that of the TSX Venture Exchange, and conditions precedent typical of a transaction of this nature.  The net prepayment proceeds will be fully drawn down to an escrow account at closing, anticipated to occur in August, 2011.

Craig Dalziel, Oroco’s President, commented that “We are confident that utilizing our future gold production to fund the majority of our capital requirements at Cerro Prieto will be significantly less dilutive to Oroco and its shareholders than funding the mine construction and initial operations through share equity.  We anticipate that the strong economic model at Cerro Prieto will assist Oroco in securing, on similarly favourable terms, the $4,000,000 in additional working capital required to fund the project through to production.”

About Oroco

Oroco is a Canadian-based mineral exploration company with its primary focus on the accelerated development of the gold-bearing oxide zones of its Cerro Prieto Oxide Gold Project in Sonora State, Mexico. In late 2010, Oroco received a positive Preliminary Economic Assessment for the Project. The Cerro Prieto Project consists of the San Felix, San Francisco, Elba and Cerro Prieto concessions, totaling 2,729 ha, and the contiguous 4,224 ha Argonauta 6 concession.

For further information, please contact: 
Mr. Craig Dalziel, President and CEO
Oroco Resource Corp. 

Tel: 604-688-6200 

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