Orosur Mining (TSX:AIM:OMI) Strategic Agreement and Closes US$2.0M Private Placement with Newmont

 

Orosur Enters into Strategic Agreement and Closes US$2.0M Private Placement with Newmont for Exploration of Anzá Property in Colombia

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.”

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 Newmont Mining 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.

 


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