(Sharecast News) - Orosur Mining updated the market on its Anzá Project in Colombia on Monday, the centrepiece of an exploration agreement with Minera Monte Águila (MMA), a joint venture equally owned by Newmont and Agnico Eagle Mines.
The AIM-traded firm said MMA, serving as the project's operator, is a collaboration platform for Newmont and Agnico in Colombia, focusing on the exploration and development activities of the Anzá Project.
Orosue's collaboration with MMA began in September 2018, as they embarked on a first phase that ended in September 2022, granting MMA a 51% interest in the project.
Following that phase, a $2m option payment was made to Orosur in early March last year, signalling the transition towards the second phase of exploration.
However, Orosur was informed last May that MMA could reconsider its involvement in the next phase.
Orosur announced on Monday that on 22 March, it entered into a non-binding letter of intent with MMA, outlining a potential transaction that would see it repurchasing MMA's stake in the Anzá Project, thus restoring full ownership.
The terms of the proposed deal included a net smelter return royalty of 1.5% and conditional cash payments totaling up to $15m, depending on reaching specific production milestones.
It said completion of the transaction was contingent on factors including successful negotiations, due diligence, and other customary conditions.
Orosur said it was optimistic about finalising the deal by the end of April, subject to fulfilling the prerequisites.
In anticipation of regaining full control over the Anzá Project, Orosur had initiated preparatory actions including staffing, community engagement, and securing the permits necessary for operations.
"After such a long period in abeyance, we are excited at the prospect of reassuming ownership and control of Anzá at this time of buoyant gold prices and heightened market interest in precious metals," said chief executive officer Brad George.
"Most importantly, the structure of the transaction whereby all consideration is deferred and contingent upon production allows us to immediately direct our resources into the ground."
At 1509 GMT, shares in Orosur Mining were up 22.51% at 2.9p.
Reporting by Josh White for Sharecast.com.
Orosur Mining (OMI)