Orosur Mining Inc. – Full Year 2017 Results: US$9.7M Cash from Operations, US$2M Profit before tax
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Orosur Mining Inc. – Full Year 2017 Results:
US$9.7M Cash from Operations, US$2M Profit before tax
SANTIAGO, Chile, August 29, 2017. Orosur Mining Inc. (“Orosur” or “the Company” ) (TSX: OMI) (AIM:
OMI), the South American -focused gold producer , developer and explorer is pleased to announce the
results for the fiscal year ended May 31, 2017 (“FY17”).
Highlights
Financial & Operational Results
• FY17 production of 35,371 oz (within stated guidance of 35-40 koz) following a significant increase in
production in Q4 (10,748 oz).
• FY17 Operating cash cost guidance of US$829 (confirmed within stated guidance of US$800 - 900/oz)
and representing an improvement on FY16: US$877.
• Average gold price received of US$1,258/oz (FY15: US$1,154/oz).
• Cash flow generated by operations was US$ 9.7M (FY16: US$7.6M) due to better operating
performance and gold price in FY17.
• Profit before tax was US$2.0M (FY16: loss of US$3.2M) due to higher gold price at $1,258/oz (FY16:
$1,154/oz) and lower overall costs of sales.
• Successfully built and developed the San Gregorio West underground mine in Uruguay (“SGW UG”)
from internally generated funds (total investment in SGW UG during FY17 was US$5.9M).
• The Company invested US$ 10.8M in capital and US$2.6M in exploration (FY16: US$3.9M and
US$2.8M, respectively). In addition to the construction of the SGW UG mine, the Company invested
in the completion of the construction of phase 4A of the new tailings dam during FY17.
• All-In-Sustaining Costs (“AISC”) of US$1,228/oz (FY16: US$1,069/oz). The increase was due mainly
to the additional development capex associated with building the SGW UG mine.
• Cash balance at the end of May 2017 was US$3.4M (Q3 US$2.4M and FY 2016 US$4.3M) with debt
of just US$0.4.
Exploration and Corporate
• Following completion of the equity raise announced on August 11 th, 2017, the company is in the
process of ramping up drilling in Colombia and plans to update the market on recent Exploration
progress in both Colombia and Uruguay in short order.
Ignacio Salazar, CEO of Orosur, commented:
“We are very pleased to report a successful FY17 having achieved a number of important corporate
milestones whilst simultaneously delivering in line with production and cost targets for the fourth
consecutive year.
Cost management and technical excellence remain central to our strategy, demonstrated by successfully
building and opening of the second UG mine in Uruguay during the year. The completion of the recent
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financing announced on August 11th 2017, which was oversubscribed and at a premium to the prevailing
market when negotiated, is an important step to support our growth strategy.
The quality of our assets, our track record on delivery and the recent financing position the Company well
for FY18 to make significant progress towards its growth potential and we look forward to reporting results
from the resource definition in Colombia, tapping the potential of the highly prospective 100km greenstone
belt we control in Uruguay and advancing Anillo in Chile,”
Operational & Financial Summary1
Fiscal Year (FY)
ended May 31
2017 2016 Change
Operating Results
Gold produced Ounces 35,371 35,773 (402)
Operating Cash cost3 US$/oz 829 877 (48)
Total Cash cost US$/oz 882 891 (9)
AISC US$/oz 1,228 1,069 159
Average price received US$/oz 1,258 1,154 104
Financial Results
Revenue US$ ‘000 44,226 42,866 1,360
Net income (loss) before tax US$ ‘000 2,028 (3,158) 5,186
Cash flow from operations2 US$ ‘000 9,664 7,603 2,061
Cash & Debt at the end of the period 2017 2016 Diff
Cash balance US$ ‘000 3,357 4,320 (963)
Total Debt US$ ‘000 403 352 51
Cash net of debt US$ ´000 2,954 3,968 (1,014)
1 Results are based on IFRS and expressed in US dollars
2 Before non-cash working capital movements
3 Operating cash cost is total cost discounting royalties and capital tax on production assets.
FY18 Outlook & Guidance
The Company expects production from the San Gregorio mine in Uruguay for FY18 to be between 30,000
- 35,000 ounces of gold, with operating costs of US$800 - US$900 per ounce.
At current gold prices this will allow the Company to continue to focus on expanding its resource base in
Uruguay both from underground and surface operations, with the aim of increasing its mine life and/or
increasing production by utilising the spare capacity in the San Gregorio plant.
As in the past, variations in production and unit costs will occur quarter on quarter as the mine plan draws
ore from several sources at varying grades and stages of development or stripping. The Company plans
to achieve its production and cost targets over the course of the year.
The Company is preparing to commence a 15,000m drilling campaign in its highly prospective Anzá project
in the mid-cauca belt of Colombia. The Company will update the market with drilling results during the year
as the program advances.
FY17 Financial Summary
Cash operating costs for the year were $829/oz (FY16: $877/oz), a reduction of 6%, due primarily to lower
operating costs related to lower tonnes transported, p rocessed at higher grades during the year and
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continuous technical improvements and cost management efforts. The Company successfully reached its
cash operating cost guidance of US$800 - 900/oz for the year.
All-in-sustaining costs (“AISC”) were $1,228/oz (FY16: $1,069/oz). The increase was due mainly to the
additional development capex associated with the SGW UG mine, including ramp, access and ventilation
work while at the same time in FY17 the company did not have the benefit of the exemption of the royalty
granted for FY16. AISC peaked at $1,345/o z in Q2 17 and since then, the Company started to reduce
capital investment during the remainder of FY17.
Cash flow generated by operations before working capital investment was US$9.7M (FY16: US$7.6M) due
to better operating performance in FY17 as explained above.
Contribution margin FY17 was US$11.1 (FY16: US$6.8M) and Profit before tax was US$2.0M (FY16: loss
of US$3.2M) due to higher gold price at $1,258/oz (FY16: $1,154/oz) and lower costs of sales overall. Net
profit after tax for the year was US$2.6M (FY16: loss of US$1.2M).
The Company invested US$10.8M in capital and US$2.6M in exploration (FY16: US$3.9M and US$2.8M,
respectively). In addition to the construction of the SGW UG mine, the Company invested during FY17 in
completing the construction of the phase 4A of the new tailings dam.
Cash balance at the end of the year was US$3.4M compared to US$4.3M at May 31, 2016. The decrease
in cash was mainly due to the development of the SGW UG mine (total investment in SGW UG during the
year 2017 was US$5.9M). The SGW UG mine was financed fully from cash from operations. Total debt
as at May 31, 2017 was US$0.4M compared to US$0.4M at May 31, 2016. This debt relates to leases on
small vehicles and equipment.
The Company has a US$1.5M committed and undrawn line of credit with Banco Santander available as at
May 31, 2017, and as of the date hereof.
Exploration Update
Following the equity raise announced on August 11th, 2017, the company is in the process of ramping up
drilling in Colombia and plans to update the market on recent Exploration progress in both Colombia and
Uruguay in short order.
END
Forward Looking Statements
All statements, other than statements of historical fact, contained or incorporated by reference in this news
release, including any information as to the future financial or operating performance of the Company,
constitute "forward-looking statements" within the meaning of certain securities laws, including the "safe
harbour" provisions of the Securities Act (Ont ario) and 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. There can be no assurance that such statements will prove to be accurate. Such statements are
subject to significant risks and uncertainties, and actual results and future events could differ materially
from those anticipated in such statements. Forward-looking statements include, without limitation success
of exploration activities; permit ting time lines; the failure of plant; equipment or processes to operate as
anticipated; accidents; labour disputes; requirements for additional capital title disputes or claims and
limitations on insurance coverage. 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.
About Orosur Mining Inc.
Orosur Mining Inc. is a full y integrated gold producer , developer and exploration company focused on
identifying and advancing gold projects in South America. The Company operates the only producing gold
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mine in Uruguay (San Gregorio), and has assembled an exploration portfolio of high quality assets in
Uruguay, Chile and Colombia. The Company is listed in Canada (TSX: OMI) and London (AIM: OMI).
For more information please visit www.orosur.ca
For further information, please contact:
Orosur Mining Inc
Ignacio Salazar, Chief Executive Officer
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
FTI Consulting
Ben Brewerton / Oliver Winters / Sara Powell / Emerson Clarke
Tel: +44 (0) 20 3727 1000
– Financial Statements Follow –
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Orosur Mining Inc.
Consolidated Statements of Financial Position
(Thousands of United States Dollars, except where indicated)
As at May 31
2017($)
As at May 31
2016($)
Assets
Cash 3,357 4,320
Accounts receivable and other assets 1,519 1,770
Inventories 13,157 12,069
Total current assets 18,033 18,159
Accounts receivable and other assets 550 550
Property plant and equipment and development costs 16,160 10,106
Exploration and evaluation costs 17,677 17,250
Deferred income tax assets 3,115 2,534
Restricted cash 229 221
Total non-current assets 37,731 30,661
Total Assets 55,764 48,820
Liabilities and Shareholders’ Equity
Trade payables and other accrued liabilities 14,518 10,586
Current portion of long-term debt 202 253
Environmental rehabilitation provision 243 360
Total current liabilities 14,963 11,199
Long-term debt 201 99
Environmental rehabilitation provision 5,405 5,327
Total non-current liabilities 5,606 5,426
Total liabilities 20,569 16,625
Capital stock 61,162 60,751
Contributed surplus 5,836 5,925
Deficit (30,913) (33,497)
Currency translation reserve (890) (984)
Total shareholders’ equity 35,195 32,195
Total liabilities and shareholders’ equity 55,764 48,820
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Orosur Mining Inc.
Consolidated Statements of Profit/(Loss) and Comprehensive Profit/(Loss)
(Thousands of United States Dollars except for earnings per share amounts)
For the years ended May 31 2017 ($) 2016 ($)
Sales
44,226
42,866
Cost of sales (40,271) (42,073)
Gross profit 3,955 793
(2,398)
Corporate and administrative expenses (2150)
Restructuring costs 143 (1,709)
Exploration and evaluation costs written off (131) (351)
Impairment of assets - (4,229)
Obsolescence provision (113) (39)
Other income 1,527 4,009
Finance cost net (164) 24
Derivative gain/(loss) (458) 158
Foreign exchange gain/(loss) (333) 336
(1,927) (3,951)
Profit/(Loss) before income tax 2,028 (3,158)
Recovery for income taxes 557 1,948
Total Profit/(loss) for the period 2,585 (1,210)
Other comprehensive profit/(loss)
Cumulative translation adjustment 93 (727)
Total comprehensive profit/(loss) for the period 2,678 (1,937)
Profit/(Loss) per common share
Basic 0.03 (0.01)
Diluted 0.03 (0.01)
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Orosur Mining Inc.
Consolidated Statements of Cash Flows
(Thousands of United States Dollars, except where indicated)
For the years ended May 31 2017 ($) 2016 ($)
Net inflow (outflow) of cash related to the following
activities
Cash flow from operating activities
Net profit/(loss) for the year 2,585 (1,210)
Adjustments to reconcile net income to net cash provided
from operating activities:
Depreciation 7,143 5,975
Impairment of assets - 4,229
Exploration and evaluation expenses written off 131 351
Obsolescence provision 113 39
Fair value of derivatives 458 (92)
Accretion of asset retirement obligation 18 (210)
Deferred income tax assets (581) (1,983)
Stock based compensation 93 43
Loss/(gain) on sale of property, plant and equipment (241) 116
Other (55) 345
Subtotal 9,664 7,603
Changes in working capital
Accounts receivable and other assets (211) (38)
Inventories (1,200) 2,253
Trade payables and other accrued liabilities 3,932 (3,255)
Net cash generated from operating activities 12,185 6,563
Cash flow from investing activities
Purchase of property, plant and equipment and
development costs
(10,621) (3,701)
Payments for environmental rehabilitation (213) (241)
Proceeds from the sale of fixed assets 240 123
Exploration and evaluation expenditure assets (2,604) (2,793)
Net cash used in investing activities (13,198) (6,612)
Cash flow from financing activities
Proceeds on sale of common shares of Anillo SPA - 710
Loan proceeds 320 -
Loan payments (270) (1,128)
Net cash generated from/(used in) financing activities 50 (418)
Decrease in cash (963) (467)
Cash at the beginning of year 4,320 4,787
Cash at the end of year 3,357 4,320