Orosur Mining Inc. - Full Year 2020 Results

London, October 15, 2020. Orosur Mining Inc. ("Orosur" or "the Company") (TSX: OMI) (AIM: OMI) announces the audited results for the fiscal year ended May 31, 2020. All dollar figures are stated in US$ unless otherwise noted. The audited financial statements of the Company for the year ended May 31, 2020; the related management's discussion and analysis ("MD&A"); the annual information form ("AIF") and the Forms 52-109F1 have all been filed and are available for review on the SEDAR website at www.sedar.com. The financial statements, the MD&A and the AIF are also available on the Company's website at www.orosur.ca.

HIGHLIGHTS

Colombia

  • In accordance with the Exploration Agreement with Venture Option over the Anzá project in Colombia (the
    "Exploration Agreement") with Newmont Colombia S.A.S. ("Newmont Colombia"), dated 7th September 2018, Newmont Colombia made a cash payment of $500K to Orosur in August 2019 and a payment of $690K to Minera Anzá (the Company's wholly owned subsidiary) in November 2019 to cover its outstanding commitments for the first year of the Exploration Agreement (September 2018 to September 2019) and to maintain its phase 1 earn-in rights.
  • On March 5, 2020, a cash payment of $500K was received by the Company from Newmont Colombia, in connection with maintaining its earn-in rights pursuant to the Exploration Agreement.
  • As announced on September 3, 2020, a further cash payment of $500K was received by the Company from Newmont Colombia, in connection with maintaining its earn-in rights pursuant to the Exploration Agreement.
  • After the year end, on 30th September 2020, Newmont Corporation ("Newmont"), entered into a Joint Venture Agreement ("Joint Venture") with Agnico Eagle Mines Limited ("Agnico") whereby the two companies will jointly assume and advance Newmont's prior rights and obligations with respect to the Anzá Project on a 50:50 basis, with Agnico acting as operator of the Joint Venture. The Joint Venture vehicle between Newmont and Agnico will change its name to Minera Monte Águila SAS ("Monte Águila").
  • Initial funding of approximately $650K from Agnico to restart the exploration program was received by Minera Anzá on October 2, 2020. This funding is to be directed solely to fund exploration on the Anzá Project for the 12 month period starting September 7, 2020 and is the first contribution of the required $4 million of expenditure for this 12 month period per the terms of the Exploration Agreement. This funding is not related to the payment in lieu for the shortfall of qualifying expenditure for the previous 12 month period ended September 6, 2020. The payment in lieu, which amounts to $582k is payable no later than November 7, 2020.

Uruguay

  • In Uruguay, with the Creditors Agreement finally approved by the Court in September 2019, and legally binding on all trade creditors, Loryser, the Company's Uruguayan subsidiary, focused its activities in the implementation of the
    Creditors Agreement and the sale of its Uruguayan assets. As part of that Creditors Agreement, Orosur issued in
    December 2019,10,000,000 common shares to a trust for the benefit of Loryser's creditors as contemplated in the
    Creditors Agreement.
  • In Q3 2020, Loryser signed a Settlement Agreement with DINAMA (Uruguay environmental agency) to recover the $1.3 million from the environmental guarantee it had executed previously. Pursuant to the Settlement Agreement, Loryser is continuing with the reclamation of the tailings dam and DINAMA will pay in instalments upon completion of a six-phase closure plan. The agreement is now effective after getting final approval from the Audit Tribunal, which oversees all Governmental accounts. The first of the payments from DINAMA in an amount of $150k was received by the Company on May 21, 2020.
  • After the year end, on August 6, 2020, the Company sold its mining and exploration permits in the San Gregorio Project area of Uruguay to Kiwanda Group LLC for an aggregate cash consideration of $550k of which $250k was received on completion and a further $300k is payable in August 1, 2021. Good progress is being made on the sale of Loryser's other assets including plant and equipment. The proceeds from all of these sales will be used to pay liabilities in Uruguay in connection with the aforementioned Creditors Agreement.
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Financial and Corporate

  • The consolidated financial statements have been 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 (at the lower of book value or fair value) and Profit and Loss from discontinuing operations. This accounting treatment has been applied to the activities in Uruguay and Chile.
  • On May 31, 2020, the Company had a cash balance of $782k, (May 31, 2019 $526k). As at the date of this announcement the Company had a cash balance of $642k.
  • During the course of Q4 2020, Louis Castro was appointed Chairman of the Board of Directors, replacing Rob Shafer. After the year end, Brad George was appointed Chief Executive Officer and Thomas Masney was appointed as a non-executive director, replacing Ignacio Salazar and HD Lee respectively.

Outlook and Strategy

During the year ended 31 May 2020 the Board continued to apply its strategic plan to restructure its business, and recapitalize and transform the Company by advancing its Anzá Project in Colombia (with Newmont as a partner, as explained above), whilst progressing other opportunities, as well as finding a fair solution in Uruguay for all stakeholders. The strategy remains unchanged post year-end.

In Colombia, Newmont completed commitments and payments of Year 2 of the Exploration Agreement. In March 2020, Newmont made the third out of four $500k cash payments to Orosur and the fourth payment of $500k was received in September 2020. As explained above, Newmont, and its new partner in the Anza project, Agnico Eagle, will need to spend $4 million on the Anza project between now and September 2021,to maintain its earn-in rights in the project, which should lead to an acceleration in the exploration and appraisal of the project in the coming year.

In Uruguay, Loryser has focused its activities on the implementation of the Creditors Agreement and will continue to do that in the coming year. The Company is well advanced in the sale of its assets in Uruguay and with the reclamation and remediation of the tailings dam.

Brad George, CEO of Orosur said:

"This year just ended has been one of transition for Orosur. San Gregorio had been the backbone for the company for many years, producing some 1.5Moz of gold during its life. 2020 however marks a new chapter where we shift focus to Colombia and the Anzá project, with our partners Newmont and Agnico. COVID-19 has clearly presented challenges, but with careful planning and operation, we hope to be active toward the end of calendar 2020, setting the foundation for an exciting 2021."

For further information, please contact:

Orosur Mining Inc Louis Castro, Chairman, Brad George, CEO info@orosur.ca

Tel: +1 (778) 373-0100

SP Angel Corporate Finance LLP - Nomad & Broker

Jeff Keating / Caroline Rowe

Tel: +44 (0) 20 3 470 0470

Flagstaff Communications

Tim Thompson

Mark Edwards

Fergus Mellon

orosur@flagstaffcomms.com

Tel: +44 (0)207 129 1474

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Orosur Mining Inc.

Consolidated Statements of Financial Position (Expressed in thousands of United States dollars)

As at

As at

May 31,

May 31,

2020

2019

(Restated

Note 1)

ASSETS

Current assets

Cash and cash equivalents

$

782

$

526

Accounts receivable and other assets

130

292

Assets held for sale of Uruguay

3,081

4,438

Total current assets

3,993

5,256

Non-current assets

Property, plant and equipment

72

87

Exploration and evaluation assets

6,479

8,483

Total assets

$

10,544

$

13,826

(DEFICIT) AND LIABILITIES

Current liabilities

Accounts payable and accrued liabilities

$

313

$

235

Liabilities of Chile discontinued operation

2,010

1,914

Warrants

-

13

Liabilities held for sale of Uruguay

17,389

21,332

Total current liabilities

19,712

23,494

Deficit

Share capital

65,670

65,290

Shares held by Trust

(380)

-

Contributed surplus

5,987

5,947

Currency translation reserve

(2,016)

(1,506)

Deficit

(78,429)

(79,399)

Total deficit

(9,168)

(9,668)

Total deficit and liabilities

$

10,544

$

13,826

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Orosur Mining Inc.

Consolidated Statements of Loss and Comprehensive Income (loss) (Expressed in thousands of United States dollars)

Year Ended

Year Ended

May 31,

May 31,

2020

2019

(Restated

Note 1)

Operating expenses

Corporate and administrative expenses

$

(1,493)

$

(1,823)

Exploration expenses

(44)

(45)

Exploration written-off

-

(7)

Other income

6

3

Net finance cost

(6)

(13)

Gain on fair value of financial instrument

11

57

Net foreign exchange loss

(1)

(23)

Net loss for the year for continued operations

$

(1,527)

$

(1,851)

Other comprehensive loss

Cumulative translation adjustment

$

(510)

$

(594)

Total comprehensive loss for the year

from continued operations

(2,037)

(2,445)

Income (loss) from discontinued operations

2,497

(9,768)

Total comprehensive income (loss) for the year

460

(12,213)

Basic and diluted net loss per share for continued operations

$

(0.01)

$

(0.01)

Basic and diluted net income (loss) per share for discontinued

operations

$

0.02

$

(0.07)

Weighted average number of common shares

outstanding

153,380

136,774

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Orosur Mining Inc. published this content on 14 October 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 15 October 2020 06:34:03 UTC