Orosur makes progress with Colombia-focussed strategy
South America-focussed gold developer and explorer Orosur Mining released its unaudited results for the first quarter ended 31 August on Wednesday, reporting that in the month of August, it received the second of four half-yearly $0.5m cash payments from Newmont Goldcorp as part of the previously-announced exploration agreement with venture option for the Anzá project in Colombia.
The AIM-traded firm also confirmed Newmont had paid $0.31m of the $1m minimum work commitment for the first year of the exploration agreement, and was required to meet the shortfall in cash to Orosur by 7 November in order to maintain its first phase earn-in right.
In Uruguay, as the company announced on 17 September, the court had approved the payment plan agreement between its wholly-owned subsidiary Loryser and Loryser’s creditors.
The ratification by the court meant that the creditors agreement was legally binding on all creditors, and that the intervenor’s control over Loryser had ceased.
Orosur said the creditors agreement provided that the net proceeds from the sale of Loryser’s assets in Uruguay, together with the issuance of 10 million common shares in Orosur, should fully satisfy all amounts owed by Loryser to its creditors, as well as provide funds for Loryser to conduct the process and manage the orderly closure of its operations.
The creditors agreement required Loryser to manage and complete the sale and payment process within two years, starting from the date of ratification by the court.
Orosur Mining said it had a cash balance of $0.55m as at 31 August, up slightly from $0.51m at the end of May.
“During the year ended 31 May 2018, the board adopted an ambitious strategic plan to restructure its business, and recapitalise and transform the company by advancing the Anzá project in Colombia, as well as finding a fair solution in Uruguay for all stakeholders and reducing its activities in Chile,” the board explained in its statement.
“The strategy remains unchanged and on course.
“In Colombia, the first two years of the exploration agreement - commencing in September 2018 - have relatively low minimum work commitments [of] $1m per year.”
The board said the minimum work commitment would increase in the third and fourth years, to $4m per year.
In order to maintain the first phase earn-in right, there were two additional semi-annual $0.5m cash payments due to be paid by Newmont to Orosur in March and September 2020, in addition to the payment of $0.69m to cover the shortfall of minimum work commitments of the first year.
“In Uruguay, with the creditors agreement finally approved by the court in September 2019, Loryser already started its implementation.
“The successful sale of assets locally in Uruguay and internationally in cooperation with broker Savona is a key component to optimising the outcome with creditors.
“The company is in the process of issuing the 10 million common shares in Orosur which is subject to the approval of the Toronto Stock Exchange.”