Shares in Orosur Mining Inc (AIM:OMI, TSX-V:OMI) pushed over 5% higher after the company provided an update on its flagship Anzá project in Colombia.
The project is subject to an exploration agreement with Colombian company Minera Monte Águila (MMA), which is a joint venture between Newmont Corporation and Agnico Eagle Mines.
Orosur and MMA are advancing negotiations of a joint venture (JV) agreement that would govern the development and operations of the project. The JV would hold the project mining concessions and applications, with MMA as manager.
The process to create the JV mining company has now commenced and is expected to take several months to complete, Orosur said. During this process, MMA will be able to continue exploration at the project, and any expenditures incurred by MMA during this interim period will form part of the phase 2 qualifying expenditures.
MMA has agreed to pay the US$2mln phase 2 payment contemplated by the exploration agreement to Orosur. These funds are expected to be received from MMA soon, Orosur noted.
Once formed, the JV company will be owned 49% by Orosur and 51% by MMA.
MMA may earn an additional 14% ownership in the JV if it has spent US$20mln in qualifying exploration expenditures on the project on or prior to the fourth anniversary of the parties entering into the Mining Company Constituent Documents.
If the phase 2 earn-in is completed, MMA would own 65% of the JV and Orosur the remaining 35%.
In a statement, Orosur executive chairman Louis Castro commented: "We are pleased that MMA will be advancing to phase 2 of the project and that the US$2mln will be paid soon. Both actions support the company's continued belief in the strength and potential of the project."
Orosur shares were trading 5.11% higher at 9.25p orning trade, having climbed as high as 10.05p early on.