Analyst Comment25 Mar 2024 10:53
Orosur has taken an important first step toward resuming 100% ownership of
the Anzá Project (‘Anzá’ or ‘the Project’), targeting completion of a transaction
(‘the Transaction’) by the end of April 2024. The proposed consideration, as
set out in the letter of intent (‘LOI’) entered with Minera Monte Águila SAS
(‘MMA’), includes a net smelter return (‘NSR’) royalty of 1.5% plus cash
payments of up to US$15 million payable upon meeting certain agreed (but as
yet undisclosed) production thresholds. Recognising the development steps
that need to be taken to reach such a stage (including production of a bankable
feasibility study (‘BFS’), permitting, construction, etc.) still remain, perhaps, 7
to 10 years away, such deferral considerably derisks the Project for
shareholders. Orosur, in exchange, will regain complete control of a now datarich, potentially world-class opportunity that is clearly much more valuable
than what was handed to the JV some years back. In anticipation, the Board
is already planning for re-assumption of ownership and operatorship, which
appears particularly timely against a background of record gold prices and a
greater willingness amongst the international mining community to invest in
Colombia once again. With a number of ‘walk up’ drill-ready targets already
presented, on-site operations could even re-start before the end of Q2 2024,
possibly in tandem with initial discussions with potential development
partners. Retaining a forward cash runway sufficient to immediately
prioritise such work, the first results could arrive quite rapidly.
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