Orosur Mining Inc. OMIOMI, is pleased to announce a key development at the Company's flagship Anzá Project ("Project") in Colombia.
The Project is subject to an Exploration Agreement with Venture Option ("Exploration Agreement") with Colombian company Minera Monte águila ("MMA"). MMA is itself a JV between Newmont Corporation ("Newmont") and Agnico Eagle Mines Limited ("Agnico"), and is the Colombian entity by which these two companies jointly exercise their rights and obligations with respect to the Exploration Agreement over the Project.
Orosur is pleased to announce that further to the announcement of September 6th 2022, MMA has now provided the Company with a Phase 1 Earn-In Notice, having completed all of the obligations under the Exploration Agreement, including the investment of US$10 million in the Project. The Company has also been informed by MMA that it will enter Phase 2 under the Exploration Agreement, which will be governed by the JVA.
As set out in the Exploration Agreement, the Company and MMA will now begin the process of forming a new mining company (the "Mining Company") that will hold title to the Project's concessions and other mining interests. Phase 2 will commence once the Mining Company is constituted and the JVA is signed. The Company will initially have a 49% ownership interest in the Mining Company and MMA the remaining 51%. Once formed, the Mining Company will be managed by MMA.
The formation of the Mining Company is expected to take several months to finalise. In the interim period, MMA will be able to continue exploration at the Project, and any expenditures incurred by MMA in this interim period will form part of the Phase 2 qualifying expenditures under the JVA. In recognition of this continued exploration work, and provided that the parties continue to work towards forming the Mining Company and finalising the JVA, MMA has committed to making the Phase 2 payment of US$2 million to the Company no later than early January 2023.
After the formation of the Mining Company and entering into the JVA, MMA may earn an additional 14% ownership in the Mining Company by spending US$20 million in qualifying exploration expenditures on the Project over a maximum period of four years. If the Phase 2 earn-in option is completed, MMA would own 65% of the Mining Company and the Company would own the remaining 35%.
Orosur Executive Chairman Louis Castro commented:
"We are delighted to have reached this key stage in the Exploration Agreement. Together with our partners we are starting to prepare for Phase 2 of the Project, and we look forward to accelerated exploration activities during this period"