MEDELLIN, Colombia -- (Business Wire)
Orosur Mining Inc. (“Orosur” or the “Company”) (TSX: OMI) (AIM: OMI)
today announces that it has completed a non-brokered private placement
of US$2,000,000 (the “Private Placement”) with Newmont Mining
Corporation (NYSE: NEM) and an exploration agreement with venture option
(the “Exploration and Option Agreement”) with Newmont Colombia S.A.S., a
wholly-owned subsidiary of Newmont (together with Newmont Mining
Corporation, “Newmont”), for the Anzá exploration property (“Anzá
Project”) in Colombia.
ANZÁ PROJECT
The Anzá Project is located in Antioquia, Colombia, and comprises total
land holdings of 207.5 km² in exploitation and exploration concessions
and concession applications, covering more than a 20 km segment of the
prospective Tonusco Fault.
EXPLORATION AND OPTION AGREEMENT
The Exploration and Option Agreement includes a three-phase earn-in
structure allowing Newmont to earn up to a 75% ownership interest in the
Anzá Project by spending a minimum of US$30.0 million in qualifying
expenditures over twelve years, completing an NI 43-101 compliant
feasibility study and making cash payments to Orosur equaling a total of
US$4.0 million over Phases 1 and 2.
In Phase 1, Newmont may earn a 51% ownership interest by spending
US$10.0 million in qualifying expenditures over four years and making
cash payments to Orosur equaling a total of US$2.0 million during the
first two years of the Phase 1 earn-in period. Upon Newmont’s completion
of Phase 1, it may elect, in its sole discretion, to exercise its option
to form a joint venture with Orosur.
In Phase 2, Newmont may elect to earn an additional 14% ownership
interest in the Anzá Project by sole-funding US$20.0 million in
qualifying expenditures within four years, completing an NI 43-101
compliant pre-feasibility study and making cash payments to Orosur
equaling a total of US$2.0 million.
In Phase 3, Newmont may elect to earn an additional 10% ownership
interest in the Anzá Project by completing an NI 43-101 compliant
feasibility study within four years.
Joint Funding and Financing Option
Upon Newmont completing the Phase 3 earn-in, Orosur may elect for
Newmont to solely fund all expenditures until the commencement of
commercial production at the Anzá Project. If the Company elects for
Newmont to do so:
-
Newmont’s ownership interest shall increase by 5% to 80% in the Anzá
Project;
-
Upon the commencement of commercial production, Orosur shall commence
contributing funds for adopted programs and budgets in proportion to
its ownership interest or suffer dilution of its ownership interest;
and
-
Newmont shall receive 90% of Orosur’s distribution of earnings or
dividends until such time as the amounts received equal the aggregate
amount of expenditures incurred by Newmont on behalf of Orosur, plus
nominal interest.
PRIVATE PLACEMENT
Newmont purchased 29,213,186 common shares at a price of C$0.091 (GBP
0.054) per share for aggregate proceeds of US$2.0 million which includes
the initial advance of US$0.25 million previously announced on July 10,
2018. The figures are based on CAD exchange rates of CAD$1.00:0.5922GBP
and CAD$1.3292:US$1.00.
Application has been made for the new common shares to be admitted to
trading on AIM. It is expected that Admission will become effective at
8.00 am (GMT) on or around September 11, 2018. If Admission is delayed,
any variations to this timetable will be announced via a Regulatory
Information Service.
As a result of the Private Placement, the number of common shares issued
and outstanding is 146,800,091. The total number of options and warrants
outstanding shall remain unchanged at 17,207,677. The common shares
issued pursuant to the Private Placement are subject to a hold period
expiring four months and one day following the closing date in
accordance with applicable Canadian securities laws.
After giving effect to the Private Placement, Newmont Mining Corporation
owns approximately 19.9% of the Company's issued and outstanding common
shares on an undiluted basis. As part of the Private Placement, Newmont
was granted a right to participate in future equity offerings of Orosur
to maintain its equity ownership level at 19.9%
Proceeds from the Private Placement will be used for testing and
advancing the Anzá Project and/or for general working capital.
Ignacio Salazar, CEO of Orosur, commented:
“After a lengthy process of evaluating potential partnerships with a
number of companies, we are very pleased to have entered into this
significant transaction with an industry leader like Newmont, known for
its exploration track record, proprietary technology, financial
strength, and its focus on leading in safety, social and environmental
responsibility.
Completing the Private Placement and entering into the Exploration
and Option Agreement accomplishes a number of key strategic elements for
Orosur. These include strengthening the Company’s cash position and
providing a well-structured deal to advance the Anzá Project.
We look forward to re-commencing exploration efforts at Anzá shortly
and are excited to add the breadth of Newmont’s exploration pedigree and
backing to our efforts.”
Advisors
Maxit Capital LP is acting as financial adviser to Orosur with respect
to the transaction and Fasken Martineau DuMoulin LLP is acting as legal
counsel.
About Orosur Mining Inc.
Orosur Mining Inc. (TSX: OMI; AIM: OMI) is a fully integrated gold
producer, developer and explorer focused on identifying and advancing
gold projects in South America.
About NewmontMining Corporation
Newmont is a leading gold and copper producer with operations primarily
in the United States, Australia, Ghana, Peru and Suriname. Newmont is
the only gold producer listed in the S&P 500 Index and was named the
mining industry leader by the Dow Jones Sustainability World Index in
2015, 2016 and 2017. Newmont is an industry leader in value creation,
supported by its leading technical, environmental, social and safety
performance. Newmont was founded in 1921 and has been publicly traded
since 1925.
Forward Looking Statements
All statements, other than statements of historical fact, contained in
this news release constitute "forward-looking statements" within the
meaning of applicable securities laws, including but not limited to the
"safe harbour" provisions of the United States Private
Securities Litigation Reform Act of 1995 and are based on
expectations estimates and projections as of the date of this news
release. Forward-looking statements include, the exercise by Newmont of
Phase 1, Phase 2 and Phase 3 of the Exploration and Option Agreement,
the completion of a pre-feasibility and feasibility study with respect
to the Anzá Project, receipt by Orosur of cash payments by Newmont, the
formation of a joint venture and other terms and conditions of the
Exploration and Option Agreement and the expected use of proceeds. There
can be no assurance that such statements will prove to be accurate.
Actual results and future events could differ materially from those
anticipated in such forward looking statements. Such statements are
subject to significant risks and uncertainties including the results of
future exploration at the Anzá Project, the decision of Newmont to
continue to make qualifying expenditures and cash payments to Orosur,
the right of Newmont to termination the Exploration and Option
Agreement, the successful approval of pending concession applications
and other risks and uncertainties set out in the Company’s most recent
annual information form filed on SEDAR. The Company’s continuance as a
going concern is dependent upon its ability to obtain adequate financing
and to reach profitable levels of operations. These material
uncertainties may cast significant doubt upon the Company’s ability to
realize its assets and discharge its liabilities in the normal course of
business and accordingly the appropriateness of the use of accounting
principles applicable to a going concern. Although the Company has been
successful in the past in obtaining financing there is no assurance that
it will be able to obtain adequate financing in future or that such
financing will be on terms advantageous to the Company. The Company
disclaims any intention or obligation to update or revise any
forward-looking statements whether as a result of new information,
future events and such forward-looking statements, except to the extent
required by applicable law.
The information contained within this announcement is deemed by the
Company to constitute inside information as stipulated under the Market
Abuse Regulation ("MAR"). Upon the publication of this announcement via
Regulatory Information Service, this inside information is now
considered to be in the public domain. If you have any queries on this,
then please contact Ryan Cohen, VP Corporate Development of the Company
(responsible for arranging release of this announcement on behalf of the
Company) on: +1 (778) 373-0100.
View source version on businesswire.com: https://www.businesswire.com/news/home/20180909005023/en/
Contacts:
For further information, please contact:
Orosur Mining Inc
Ignacio
Salazar, Chief Executive Officer
Ryan Cohen, VP Corporate
Development
info@orosur.ca
Tel:
+1 (778) 373-0100
or
Cantor Fitzgerald Europe – Nomad &
Joint Broker
David Porter/Keith Dowsing
Tel: +44 (0) 20
7894 7000
or
Numis Securities Limited – Joint Broker
John
Prior / James Black / Paul Gillam
Tel: +44 (0) 20 7260 1000
Source: Orosur Mining Inc.
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