TSX- and Aim-listed Orosur on Monday announced an exploration and option agreement with gold major Newmont Mining, which will see the gold major earn into the 207.5 ha Anzá project in Antioquia, Colombia.
Newmont has also invested $2-million through a private placement in the cash-strapped junior, which recently warned of its “difficult” financial position after closing down operations at San Gregorio, in Uruguay.
As a result of the placement, Newmont will own 19.9% of Orosur.
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 $30-million in qualifying expenditures over 12 years, completing an National Instrument 43-101-compliant feasibility study and making $4-million in cash payments.
Upon Newmont completing the Phase 3 earn-in, Orosur may elect for Newmont to solely fund all expenditures until commercial production starts at Anzá. Should the company pursue this option, Newmont’s ownership will increase to 80% in the Anzá project.
“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,” commented Orosur CEO Ignacio Salazar.
Orosur’s London-listed stock responded positively to the news, surging by 300% to 7.28p each on Monday.