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 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.
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.
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version on businesswire.com: https://www.businesswire.com/news/home/20180909005023/en/
For further information, please contact:Orosur Mining
IncIgnacio Salazar, Chief Executive OfficerRyan Cohen, VP
Corporate Developmentinfo@orosur.caTel: +1 (778)
373-0100orCantor Fitzgerald Europe – Nomad & Joint
BrokerDavid Porter/Keith DowsingTel: +44 (0) 20 7894
7000orNumis Securities Limited – Joint BrokerJohn Prior /
James Black / Paul GillamTel: +44 (0) 20 7260 1000