Analyst Comment4 May 2023 12:10
Minera Monte Águila (‘MMA’) has updated Orosur with respect of its position
in relation to the Anzá Project (‘the Project’), confirming that it is reviewing its
options in relation to the Project and that it has reduced exploration
expenditures, effectively placing it in ‘care and maintenance.’ This comes
shortly after MMA’s equity participation of 51% in the three-phase joint
venture (the ‘JV’) had been secured following Orosur’s receipt of a US$2m
stage payment. While leaving all options open at this time, MMA’s decision
appears to be related principally to complexities surrounding the recent
merger activity of both Newmont Corporation and Agnico Eagle Mines Ltd, as
well as a more difficult political background in Colombia. Given that all
parties continue to recognise the Project’s exceptional forward potential and
that political concerns may dissipate in time, the JV’s development work
could possibly recommence. It may be more likely, however, that MMA will
seek third-party buyers for its 51% stake, or otherwise offer it back to Orosur
with a view to achieving a much quicker and cleaner resolution. Shareholders
could then be rewarded through its Board being able to negotiate more
advantageous terms via a new joint venture with a new partner, or otherwise
develop the Project independently. In the meantime, the stature of Orosur’s
earlier-stage projects in Argentina and Brazil continues to move forward in
alignment with the Board’s ambition to become a diversified LATAM explorer.
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