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Orosur Mining Inc. – Third Quarter 2020 Results & Board Change

--(BUSINESS WIRE)--  SANTIAGO, Chile

(“Orosur” or “the Company”) (TSX/AIM: OMI), a South American-focused gold developer and explorer, is pleased to announce the results for the third quarter ended (“Q3 20” or the “Quarter”) as well as the appointment of , aged 61, as Chairman and Non-Executive Director of the Company to replace , who has retired from the Company's board.Orosur Mining Inc.February 29, 2020Louis CastroRobert Schafer

HIGHLIGHTS

Outlook and Strategy

The Board adopted an aggressive strategic plan to restructure its business, and recapitalize and transform the Company by advancing its Anzá project in (now with Newmont as a partner), whilst progressing other opportunities, as well as finding a fair solution in for all stakeholders. This strategy remains unchanged.ColombiaUruguay

In , Newmont met its Year 1 commitments and payments pursuant to the Exploration Agreement. In , Newmont made the third cash payment to Orosur with the fourth and final payment of this sort expected in .ColombiaMarch 2020September 2020US$500k

In Phase 1, Newmont may earn a 51% ownership interest in Anzá by spending in qualifying expenditures over four years and making cash payments to Orosur equalling a total of during the first two years of the Phase 1 earn-in period. During the first two years of the Exploration Agreement (commencing ), Newmont is committed to spend a minimum of per year on qualifying expenditures (“Minimum Work Commitment”), or pay Orosur cash in lieu of completing said minimum work commitment, in order to maintain the Phase 1 earn-in right. In years 3 and 4, the Minimum Work Commitment increases to per year.US$10 millionUS$2 millionUS$1 millionUS$4 millionSeptember 2018

The Exploration Agreement comprises a three-phase earn-in structure, allowing Newmont to earn up to a 75% ownership interest in the Anzá project by making cash payments to Orosur equaling a total of over Phases 1 and 2, spending a minimum of in qualifying expenditures over twelve years, and in addition completing N.I. 43-101 compliant prefeasibility and feasibility studies through the end of Phase 3.US$4 millionUS$30 million

In , Loryser is focusing its activities in the implementation of the Creditors Agreement. The Creditors’ Agreement requires Loryser to manage and complete the sale and payment process within two years, starting from the date of the ratification by the Court in .UruguaySeptember 2019

Board Changes

has been appointed Chairman and Non-Executive Director of the Company replacing , who has retired from the Company's board.Louis CastroBob Schafer

is a chartered accountant and former investment banker with more than 30 years' City and industry experience. Louis is a non-executive director and Chairman of the Audit Committee at Stanley Gibbons Group plc, Jangada Mines plc and Tekcapital plc. He was previously CFO at , an AIM listed upstream company operating in , and CEO at investment bank and broker, where he represented a significant number of mining and oil & gas clients, including clients in .Mr. CastroEland Oil and GasNorthland Capital PartnersNigeriaSouth America

joined the in . He has recently been elected as President of the US-based "" ("SME") and is focusing his time in this new role.Mr. SchaferBoard of OrosurSociety for Mining, Metallurgy and ExplorationJune 2018

, CEO of Orosur, commented:Ignacio Salazar

“We are pleased to announce the appointment of Louis to the Orosur´s Board and welcome his proven track record in the industry and in capital markets over decades. Louis’ significant experience is of notable value given the Company’s focus on advancing the Anzá Project in whilst progressing other opportunities. It is with great regret that the Board has accepted Mr. Schafer’s decision to retire. We wish him all the best in his professional and personal endeavours and thank him for his service to the Company and its shareholders.”Colombia

For further information, please contact:

, Chief Executive Officer , VP Corporate Development Tel: +1 (778) 373-0100Orosur Mining Inc
Ignacio SalazarRyan Cohen


[email protected]

/ Tel: +44 (0) 20 3 470 0470– Nomad & Joint BrokerSP Angel Corporate Finance LLP
Jeff KeatingCaroline Rowe

The information contained within this announcement is deemed by the Company to constitute inside information as stipulated under the Market Abuse Regulation ("MAR"). Upon the publication of this announcement via , this inside information is now considered to be in the public domain. If you have any queries on this, then please contact , VP Corporate Development of the Company (responsible for arranging release of this announcement on behalf of the Company) on: +1 (778) 373-0100.Regulatory Information ServiceRyan Cohen

AboutOrosur Mining Inc.

(TSX: OMI; AIM: OMI) is a precious metals developer and explorer focused on identifying and advancing gold projects in . The Company operates in and .Orosur Mining Inc.South AmericaColombiaUruguay

Forward Looking Statements

All statements, other than statements of historical fact, contained in this news release constitute "forward looking statements" within the meaning of applicable securities laws, including but not limited to the "safe harbour" provisions of the United States Private Securities Litigation Reform Act of 1995 and are based on expectations estimates and projections as of the date of this news release.

Forward-looking statements include, without limitation, the exploration plans in and the funding from Newmont of those plans, Newmont´s decision to continue with the Exploration and Option agreement, the ability for Loryser to continue and finalize with the remediation in , the ability to implement the Creditors’ Agreement successfully as well as continuation of the business of the Company as a going concern and other events or conditions that may occur in the future. The Company’s continuance as a going concern is dependent upon its ability to obtain adequate financing, to reach profitable levels of operations and to reach a satisfactory implementation of the Creditor´s Agreement in . These material uncertainties may cast significant doubt upon the Company’s ability to realize its assets and discharge its liabilities in the normal course of business and accordingly the appropriateness of the use of accounting principles applicable to a going concern. There can be no assurance that such statements will prove to be accurate. Actual results and future events could differ materially from those anticipated in such forward looking statements. Such statements are subject to significant risks and uncertainties including, but not limited, those as described in Section “Risks Factors” of the MDA and the Annual Information Form. The Company disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events and such forward-looking statements, except to the extent required by applicable law.ColombiaUruguayUruguay

Regulatory Disclosures

The following disclosures are required regarding Louis Emmanuel Castro’s appointment pursuant to Rule 17 and Schedule Two paragraph (g) of the AIM Rules for Companies:

Current directorships and partnerships:

Past directorships and partnerships held over the last 5 years:

Louis has no direct or indirect interest in the Company’s ordinary shares.

No further disclosure is required pursuant to AIM Rule 17 and paragraph (g) to Schedule Two of the AIM Rules for Companies.

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

The accompanying notes to the unaudited condensed interim consolidated financial statements are an integral part of these statements.

Orosur Mining Inc.

Source:Orosur Mining Inc.

  • In accordance with the Exploration Agreement with Venture Option over the Anzá project in (the “Exploration Agreement”) with Newmont Colombia S.A.S. (“Newmont”), Newmont made a cash payment of to Minera Anzá in to cover its outstanding commitments for the first Year of the Exploration Agreement ( to ) and to maintain its phase 1 earn-in rights.ColombiaUS$690kNovember 2019September 2018September 2019
  • In , the Creditors Agreement was finally approved by the Court in and, as a result, became legally binding on all trade creditors. During Q3 20, Loryser focused its activities in the implementation of the Creditors Agreement and the sale of its Uruguayan assets. As agreed in the Creditors Agreement, on , Orosur issued 10,000,000 common shares to a trust for the benefit of Loryser’s creditors.UruguaySeptember 2019December 19, 2019
  • As at , the Company had a cash balance of ( - ).February 29, 2020May 31, 2019US$463kUS$512k
  • After the end of the Q3 20, as previously announced on , an additional cash payment of was received by the Company from Newmont, in connection with maintaining its earn-in rights pursuant to the Exploration Agreement.March 5, 2020US$500k
  • Assets held for sale in have been recorded in this quarter and in the FY19 consolidated financial statements at the lower of book value or fair value. The consolidated financial statements were prepared on a going concern basis under the historical cost method except for certain financial assets and liabilities which are accounted for as Assets and Liabilities held for sale and Profit and Loss from discontinuing operations. This accounting treatment has been applied to the activities in and .UruguayUruguayChile
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Orosur Mining Inc.
Condensed Interim Consolidated Statements of Financial Position
(Expressed in thousands of United States Dollars)
Unaudited

As at

As at

,Feb 29

,May 31

2020

2019

ASSETS
 
Current assets
Cash and cash equivalents

$463

$512

Accounts receivable and other assets

536

292

Assets held for sale

3,797

4,452

Total current assets

4,796

5,256

 

 

Non‑current assets

 

 

Property, plant and equipment

80

87

Exploration and evaluation assets

8,310

8,983

Total assets

$13,186

$14,326

 

 

EQUITY AND LIABILITIES

 

 

 

 

Current liabilities

 

 

Accounts payable and accrued liabilities

$295

$235

Warrants

-

13

Liabilities held for sale

22,234

23,393

Total liabilities

22,529

23,641

 

 

Equity

 

 

Share capital

65,670

65,290

Contributed surplus

5,981

5,947

Currency translation reserve

(1,922)

(1,653)

Total Deficit

(79,072)

(78,899)

Total (deficit) / equity

(9,343)

(9,315)

Total (deficit) / equity and liabilities

$13,186

$14,326

Orosur Mining Inc.

Condensed Interim Consolidated Statements of Loss and Comprehensive Loss

(Expressed in thousands of United States Dollars)

Unaudited

Three Months

Three Months

Nine Months

Nine Months

Ended

Ended

Ended

Ended

,Feb 29

,Feb 29

,Feb 29

,Feb 29

2020

2019

2020

2019

(Restated)

 

(Restated)

 
Operating expenses
Corporate and administrative expenses

()$351

()$332

()$1,061

()$1,165

Exploration expenses

(14)

(11)

(71)

(49)

Other income

-

-

501

-

Net finance cost

21

1

18

(4)

(Loss) on fair value of financial instrument

(20)

(320)

(11)

(341)

Net foreign exchange gain/(loss)

(6)

(2)

(16)

(30)

(370)

(664)

(640)

(1,589)

Net loss for the period for continued operations

()$370

()$664

()$640

()$1,589

 

 

 

 

Other comprehensive income (loss)

 

 

 

 

Cumulative translation adjustment

$-

$624

()$269

()$125

Total comprehensive loss for the period from continued operations

-370

-40

-909

-1,714

Income (loss) from discontinued operations

(203)

(1,362)

467

(8,698)

Total comprehensive loss for the period

(573)

(1,402)

(442)

(10,412)

 

 

 

 

Basic and diluted net loss per share for continued operations

$0.00

$0.00

$0.00

()$0.01

 

 

 

 

Basic and diluted net loss per share for discontinued operations

$0.00

()$0.01

$0.00

()$0.06

Weighted average number of common shares outstanding

159,618

150,278

153,380

136,774

Orosur Mining Inc.
Condensed Interim Consolidated Statements of Cash Flows
(Expressed in thousands of United States Dollars)
Unaudited
Nine MonthsNine Months
EndedEnded
,Feb 29,Feb 29

2020

2019

 

(Restated)

Operating activities
Net loss for the period

()$640

()$1,589

Adjustments for:

 

 

Share‑based payments

34

72

Fair value of financial instrument

(11)

341

Loss on sale of property, plant and equipment

-

12

Other

(68)

214

Changes in non‑cash working capital items:

 

 

Accounts receivable and other assets

133

(73)

Accounts payable and accrued liabilities

60

(264)

Net cash (used in) operating activities ‑ continued operations

(492)

(1,287)

 

 

Investing activities

 

 

Proceeds received for exploration and evaluation expenditures

1,030

-

Exploration and evaluation expenditures

(577)

(419)

Net cash provided by (used in) investing activities ‑ continued operations

453

(419)

Financing activities

 

 

Issue of common shares

-

2,000

Advances to discontinued operations

(10)

165

Net cash provided by (used in) financing activities ‑ continued operations

(10)

2,165

Net change in cash and cash equivalents ‑ continued operations

(49)

459

Cash and cash equivalents, beginning of period

512

80

Cash and cash equivalents, end of period

$463

$539

 

 

Net cash provided by (used in) investing activities ‑ discontinued operations

73

475

 

 

Net cash (used in) operating activities ‑ discontinued operations

(264)

(1,598)

 

 

Net cash provided by (used in) financing activities ‑ discontinued operations

10

34

Quick facts: Orosur Mining Inc

Price: 3.3

Market: AIM
Market Cap: £5.29 m
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