as far as i know, you need to tell white and black parts on your map. i have never tried transparent cutouts in alpha slot.
do it simple way - make your map black and white -... parts you dont want to see - black, visible - white.
I tried using a black and white image which in theory, using opacity, should make all the black parts of the image transparent. In the little material preview it gives, it shows the material as transparent in the black areas, but when i apply it, its just black in the black areas.. As a test, i made the entire opacity layer black, which should be fully transparent... once again in the material preview it's completely transparent.. but once applied it's just black. Idk what I'm doing wrong.. is it just not possible to mix textures in Corona yet?
Can someone else try this and tell me the results you get?