Taken from recent T & P read watch document.25 Jan 2021 09:31
Orosur now has limited execution or funding risk
As part of the recently completed private placement, Newmont was granted a right to participate in future equity offerings of Orosur in order to maintain its ownership level at 19.9% (following the Placing, Newmont’s participation was cut to 15.6%). The Exploration and Option Agreement originally entered into includes a three-phase earn-in structure to earn up to 75% through a minimum commitment of US$30.0 million in qualifying expenditures over twelve years, completing a NI 43-101 compliant feasibility study while making cash payments to Orosur totalling US$4.0 million during phases 1 and 2. Most recently, for example, on 10 November 2020, Orosur received the sum of US$582,170, from Minera Monte Águila S.A.S. (‘Monte Águila’), the new name for Newmont Colombia SAS, a Colombian company that is a 50:50 JV between Newmont and Agnico Eagle Mines Limited (‘Agnico’, NYSE:AEM, TSX:AEM), in connection with maintaining the earn-in rights pursuant to the Option Agreement. TPI estimates that cash generated from the Placing, along with existing cash/receipt of remaining instalments remains sufficient to carry Orosur through to the completion of a pre-feasibility study for APTA. Today’s news provides not only excellent verification of previous drill results, but also sufficient confidence for management to see activity ‘stepped up a gear’ by expanding and accelerating the campaign. Realistically, Monte Águila will wait for Minera Anzá to complete at least the planned 2400m over eight holes and then comprehensively analyse the data generated, following which they could then take a formal decision to assume operational control of the Anzá Project. On this basis, its participation could potentially increase to a majority within 18 or so months thereafter. In this respect, the Board’s decision to ensure that the campaign will not be unduly hindered by the Pandemic most certainly appears to be in shareholder’s best interests, particularly when considering drilling results reported by Los Cerros Limited (ASX:LCL) whose nearby Quinchia Project in the Mid-Cauca gold belt on 21 January 2021 reported latest drilling from its Tesorito South porphyry target returning its strongest gold intercept ever recorded, including 102m @ 2.11 g/t Au from 28m . This further demonstration of the regions exceptional prospectivity, resulted in Los Cerros’ share price spiking some 50% this news. Given the resounding verification delivered by MAP-072, together with the Board’s expectation that the remaining assays will produce similar polymetallic gradings and widths, the Anzá Project appears capable of driving strong mining economics. On this basis, TPI considers a positive decision from Agnico & Newmont could potentially be delivered within the next 12 to 18 months which, in turn, would add considerably to Orosur’s current valuation.
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