Orosur Enters into Strategic Agreement and Closes US$2.0M Private Placement with Newmont for Exploration of Anzá Property in Colombia
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Orosur Enters into Strategic Agreement and Closes US$2.0M Private Placement with
Newmont for Exploration of Anzá Property in Colombia
Medellin, Colombia, September 10, 2018. Orosur Mining Inc. (“Orosur” or the “Company”) (TSX: OMI) (AIM:
OMI) today announces that it has completed a non -brokered private placement of US$2,000,000 (the
“Private Placement”) with Newmont Mining Corporation (NYSE: NEM) and an exploration agreement with
venture option (the “Exploration and Option Agreement”) with Newmont Colombia S.A.S., a wholly-owned
subsidiary of Newmont (together with Newmont Mining Corporation, “ Newmont”), for the Anzá exploration
property (“Anzá Project”) in Colombia.
ANZÁ PROJECT
The Anzá Project is located in Antioquia, Colombia, and comprises total land holdings of 207.5 km² in
exploitation and exploration concessions and concession applications, covering more than a 20 km
segment of the prospective Tonusco Fault.
EXPLORATION AND OPTION AGREEMENT
The Exploration and Option Agreement includes a three-phase earn-in structure allowing Newmont to earn
up to a 75% ownership interest in the Anzá Project by spending a minimum of US$30.0 million in qualifying
expenditures over twelve years, completing an NI 43 -101 compliant feasibility study and making cash
payments to Orosur equaling a total of US$4.0 million over Phases 1 and 2.
In Phase 1, Newmont may earn a 51% ownership interest by spending US$10.0 million in qualifying
expenditures over four years and making cash payments to Orosur equaling a total of US$2.0 million during
the first two years of the Phase 1 earn -in period. Upon Newmont’s completion of Phase 1, it may elect, in
its sole discretion, to exercise its option to form a joint venture with Orosur.
In Phase 2, Newmont may elect to earn an additional 14% ownership interest in the Anzá Project by sole -
funding US$20.0 million in qualifying expenditures within four years, completing an NI 43 -101 compliant
pre-feasibility study and making cash payments to Orosur equaling a total of US$2.0 million.
In Phase 3, Newmont may elect to earn an additional 10% ownership interest in the Anzá Project by
completing an NI 43-101 compliant feasibility study within four years.
Joint Funding and Financing Option
Upon Newmont completing the Phase 3 earn -in, Orosur may elect for Newmont to solely fund all
expenditures until the commencement of commercial production at the Anzá Project. If the Company elects
for Newmont to do so:
• Newmont’s ownership interest shall increase by 5% to 80% in the Anzá Project;
• Upon the commencement of commercial production, Orosur shall commence contributing funds for
adopted programs and budgets in proportion to its ownership interest or suffer diluti on of its
ownership interest; and
• Newmont shall receive 90% of Orosur’s distribution of earnings or dividends until such time as the
amounts received equal the aggregate amount of expenditures incurred by Newmont on behalf of
Orosur, plus nominal interest.
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PRIVATE PLACEMENT
Newmont purchased 29,213,186 common shares at a price of C$0.091 (GBP 0.054) per share for
aggregate proceeds of US$2.0 million which includes the initial advance of US$0.25 million previously
announced on July 10, 2018. The figures are based on CAD exchange rates of CAD$1.00:0.5922GBP and
CAD$1.3292:US$1.00.
Application has been made for the new common shares to be admitted to trading on AIM. It is expected
that Admission will become effective at 8.00 am (GMT) on or around Septembe r 11, 2018. If Admission is
delayed, any variations to this timetable will be announced via a Regulatory Information Service.
As a result of the Private Placement, the number of common shares issued and outstanding is 146,800,091.
The total number of options and warrants outstanding shall remain unchanged at 17,207,677. The common
shares issued pursuant to the Private Placement are subject to a hold period expiring four months and one
day following the closing date in accordance with applicable Canadian securities laws.
After giving effect to the Private Placement, Newmont Mining Corporation owns approximately 19.9% of
the Company's issued and outstanding common shares on an undiluted basis. As part of the Private
Placement, Newmont was granted a right to participate in future equity offerings of Orosur to maintain its
equity ownership level at 19.9%
Proceeds from the Private Placement will be used for testing and advancing the Anzá Project and/or for
general working capital.
Ignacio Salazar, CEO of Orosur, commented:
“After a lengthy process of evaluating potential partnerships with a number of companies, we are very
pleased to have entered into this significant transaction with an industry leader like Newmont, known for its
exploration track record, proprietary technology, financial strength, and its focus on leading in safety, social
and environmental responsibility.
Completing the Private Placement and entering into the Exploration and Option Agreement accomplishes
a number of key strategic elements for Orosur. These include strengthening the Company’s cash position
and providing a well-structured deal to advance the Anzá Project.
We look forward to re -commencing exploration efforts at Anz á shortly and are excited to add the breadth
of Newmont’s exploration pedigree and backing to our efforts.”
Advisors
Maxit Capital LP is acting as financial adviser to Orosur with respect to the transaction and Fasken
Martineau DuMoulin LLP is acting as legal counsel.
END
About Orosur Mining Inc.
Orosur Mining Inc. (TSX: OMI; AIM: OMI) is a fully integrated gold producer, developer and explorer
focused on identifying and advancing gold projects in South America.
About Newmont Mining Corporation
Newmont is a leading gold and copper producer with operations primarily in the United States, Australia,
Ghana, Peru and Suriname. Newmont is the only gold producer listed in the S&P 500 Index and was named
the mining industry leader by the Dow Jones Sustainability World Index in 2015, 2016 and 2017. Newmont
is an industry leader in value creation, supported by its leading technical, environmental, social and safety
performance. Newmont was founded in 1921 and has been publicly traded since 1925.
Forward Looking Statements
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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, the exercise by Newmont of Phase 1, Phase 2 and Phase 3 of the Exploration and Option
Agreement, the completion of a pre-feasibility and feasibility study with respect to the Anzá Project, receipt
by Orosur of cash payments by Newmont, the formation of a joint venture and other terms and conditions
of the Exploration and Option Agreement and the expected use of proceeds. There ca n 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 the results of future exploration at the Anzá Project, the decision of Newmont to
continue to make qualifying expenditures and cash payments to Orosur, the right of Newmont to termination
the Exploration and Option Agreement, the successful approval of pending concession applications and
other risks and uncertainties set out in the Company’s most recent annual information form filed on SEDAR.
The Company’s continuance as a going concern is dependent upon its ability to obtain adequate financing
and to reach profitable levels of operations. 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. Although
the Company has been successful in the past in obtaining financing there is no assurance that it will be
able to obtain adequate financing in future or that such financing will be on terms advant ageous to the
Company. 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.
For further information, please contact:
Orosur Mining Inc
Ignacio Salazar, Chief Executive Officer
Ryan Cohen, VP Corporate Development
Tel: +1 (778) 373-0100
Cantor Fitzgerald Europe – Nomad & Joint Broker
David Porter/Keith Dowsing
Tel: +44 (0) 20 7894 7000
Numis Securities Limited – Joint Broker
John Prior / James Black / Paul Gillam
Tel: +44 (0) 20 7260 1000
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 Regulatory Information Service, this inside information is now considered to be in the
public domain . If you have any queries on this, then please contact Ryan Cohen, VP Corporate
Development of the Company (responsible for arranging release of this announcement on behalf of the
Company) on: +1 (778) 373-0100.