Orosur Mining Orosur Mining Inc. - Q2 2019 Update and Results

 
TIDMOMI 
 
 

Orosur Mining Inc. ("Orosur" or "the Company") (TSX/AIM: OMI), a South American-focused gold developer and explorer announces the results for the second quarter ended November 30, 2018 ("Q2 19" or the "Quarter"). All dollar figures are stated in thousands of US dollars unless otherwise stated.

HIGHLIGHTS

 
 
    -- On September 10, 2018, the Company completed several agreements with 

Newmont for the Anzá exploration property in Colombia:

The non-brokered private placement of $2 million; and,

An exploration agreement with venture option. 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 making cash payments to Orosur equaling a total of $4 million

over Phases 1 and 2, spending a minimum of $30 million in

qualifying expenditures over twelve years, and in addition

completing NI 43-101 compliant pre-feasibility and feasibility

studies.

 
    -- The re-organisation process has been ongoing in Uruguay since June 

2018. In August 2018, the Company placed its San Gregorio mining

operations under care and maintenance. On December 18, 2018, the

Company announced Loryser had reached a payment plan with its

creditors (currently signed by approximately 70% of creditors, by

value). This agreement contemplates that net proceeds from the sale of

Loryser's assets in Uruguay together with the issuance of 10 million

common shares of Orosur shall fully satisfy all amounts owing to

Loryser's creditors as well as provide funds for Loryser to conduct

this process and close operation responsibly. Loryser would manage the

process, to be completed within two years. The issuance of common

shares of Orosur is subject to approval of the Toronto Stock Exchange.

The Agreement is now subject to consideration by the Court and the

Intervenor, and normal procedures for approval, like public notice,

which the Company expects to conclude in the first half of 2019. Once

approved by the Court, the Agreement will be legally binding for all

the creditors and Loryser's creditor protection status will cease

together with Intervenor's control over Loryser.

 
    -- During the three months ended November 30, 2018, the Company incurred 

a net loss of $1,874 ($252 for the three months ended November 30,

2017), which included care and maintenance costs of $613 at the San

Gregorio mine, restructuring costs of $645 relating to the termination

of employees at San Gregorio, and corporate expenses of $639 ($749 for

the three months ended November 30, 2017). Gold production and

revenues ceased in August 2018.

Ignacio Salazar, CEO of Orosur, said:

"After many months of hard and patient work, the Company has managed to crystalize two deals which provide a platform to transform Orosur: an agreement in Colombia with Newmont which provides the structure, financing and technical support to build a significant project in Anzá, and a significant vote of confidence from an impressive majority of 70% of the Loryser creditors to our proposed plan to reach a fair and balanced solution to the re-organisation proceedings in Uruguay. We are delighted with these two milestones and very aware of the work in front of us and our commitment to deliver on both agreements."

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 Colombia, the ability to continue operations in Uruguay, and the approval by the Court of the Agreement in Uruguay, expectations that the Agreement will become legally binding on all creditors of Loryser and successful emergence from creditor protection proceedings and Intervenor control. 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 the outcome of current discussions and negotiations with respect to the Company's assets in Uruguay, the results of future exploration in Colombia, and other risks and uncertainties which are described in Section 8 of the Management's Discussion and Analysis for the three months ended November 30, 2018 and for the year ended May 31, 2018. 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 advantageous 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.

About Orosur Mining Inc.

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

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 and Interim CFO of the Company (responsible for arranging release of this announcement on behalf of the Company) on: [phone].

 
Orosur Mining Inc. 
Condensed Interim Consolidated Statements 
of Financial Position 
Thousands of United States Dollars, 
except where indicated 
                                               As at          As at 
                                               November 30,   May 31, 
                                               2018 ($)       2018 ($) 
Assets 
Cash                                           1,047          1,390 
Accounts receivable and other assets           718            1,550 
Accounts held for sale                         -              120 
Inventories                                    5,357          6,100 
Total current assets                           7,122          9,160 
Accounts receivable and other assets           73             73 
Property plant and equipment                   3,490          6,578 
and development costs 
Exploration and evaluation costs               9,354          9,755 
Restricted cash                                194            201 
Total non-current assets                       13,111         16,607 
Total assets                                   20,233         25,767 
Liabilities and Shareholders' Equity 
Trade payables and accrued liabilities         19,331         17,845 
Current portion of long-term debt              1,711          1,730 
Warrants                                       89             68 
Environmental rehabilitation provision         139            139 
Total current liabilities                      21,270         19,782 
Long-term debt                                 211            211 
Environmental rehabilitation provision         5,236          5,283 
Total non-current liabilities                  5,447          5,494 
Total liabilities                              26,717         25,276 
Capital stock                                  65,290         63,290 
Contributed surplus                            5,929          5,893 
Deficit                                        (76,042 )      (67,780 ) 
Currency translation reserve                   (1,661  )      (912    ) 
Total shareholders' equity (deficit)           (6,484  )      491 
Total liabilities and shareholders' equity     20,233         25,767 
 
 
Orosur Mining Inc. 
Condensed Interim 
Consolidated 
Statements of 
Loss 
and  Comprehensive 
Income/(Loss) 
Thousands of United 
States Dollars, 
except for loss per 
share amounts 
                           Three months ended       Six months ended 
                           November 30,             November 30, 
                           2018 ($)   2017 ($)      2018 ($)   2017 ($) 
Sales                      -          9,028         4,202      20,979 
Cost of sales              -          (7,708 )      (7,119 )   (19,480 ) 
Gross profit               -          1,320         (2,917 )   1,499 
Corporate                  (639   )   (749   )      (1,041 )   (1,249  ) 
and administrative 
expenses 
Exploration expenses       (18    )   -             (162   )   (145    ) 
Exploration expenses       (27    )   (17    )      (93    )   (26     ) 
and written off 
Care and maintenance       (613   )   -             (613   )   - 
expenses 
Restructuring costs        (645   )   (750   )      (3,967 )   (810    ) 
Obsolescence provision     (5     )   (9     )      (5     )   (45     ) 
Other income               218        1             299        130 
Net finance cost           (28    )   (59    )      (70    )   (146    ) 

Loss on fair value         (42    )   -             (21    )   (10     ) 
of financial 
instruments, net 
Foreign exchange           (75    )   11            329        263 
gain (loss) 
                           (1,874 )   (1,572 )      (5,344 )   (2,038  ) 
Loss before income tax     (1,874 )   (252   )      (8,261 )   (539    ) 
Provision for              -          1             -          (2      ) 
income taxes 
Total loss for             (1,874 )   (251   )      (8,261 )   (541    ) 
the period 
Other comprehensive 
(loss) income 
Cumulative translation     (559   )   142           (749   )   (136    ) 
adjustment 
Total comprehensive        (2,433 )   (109   )      (9,010 )   (677    ) 
loss 
for the period 
Basic and diluted net      (0.02  )   (0.00  )      (0.07  )   (0.01   ) 
loss per share 
 
 
Orosur Mining Inc. 
Condensed Interim Consolidated 
Statements of Cash Flows 
Thousands of United States Dollars, 
except where indicated 
                                                   Six months ended 
                                                   November 30, 
                                                   2018 ($)   2017 ($) 
Net inflow (outflow) of cash related 
to the following activities 
Cash flow from operating activities 
Net Loss for the period                            (8,261 )   (542   ) 
Adjustments to reconcile net income to net 
cash provided from  operating activities: 
Depreciation                                       3,345      4,064 
Exploration and evaluation expense written off     93         26 
Obsolescence provision                             5          45 
Fair value of derivatives                          13         (20    ) 
Stock based compensation                           36         44 
Accretion of asset retirement obligation           19         38 
Loss (gain) on sale of property,                   14         (61    ) 
plant and equipment 
Other                                              53         20 
Subtotal                                           (4,683 )   3,614 
Changes in working capital: 
Accounts receivable and other assets               758        29 
Inventories                                        737        656 
Trade payables and other accrued liabilities       1,541      (360   ) 
Net cash generated (used in)                       (1,647 )   3,939 
from operating activities 
Cash flow from financing activities 
Loan payments                                      (19    )   (129   ) 
Investment in Anillo                               -          69 
Proceeds from sale of Talca                        60         - 
Loans received                                     -          1,500 
Proceeds from private placement                    2,000      2,894 
Net cash generated from financing activities       2,041      4,334 
Cash flow from investing activities 
Purchase of property, pland and equipment          (269   )   (6,164 ) 
and development costs 
Environmental tasks                                (66    )   (95    ) 
Proceeds from the sale of fixed assets             -          10 
Exploration and evaluation expenditure assets      (402   )   (3,317 ) 
Net cash used in investing activities              (737   )   (9,566 ) 
Decrease in cash                                   (343   )   (1,293 ) 
Cash at the beginning of period                    1,390      3,357 
Cash at the end of period                          1,047      2,064 
 
 

For further information, please contact:

Orosur Mining IncIgnacio Salazar, Chief Executive OfficerRyan Cohen, VP Corporate Development & Interim [e-mail]: [phone]

Cantor Fitzgerald Europe - Nomad & Joint BrokerDavid Porter/Keith DowsingTel: [phone]

Numis Securities Limited - Joint BrokerJohn Prior / James Black / Paul GillamTel: [phone]

View source version on businesswire.com: https://www.businesswire.com/news/home/20190114005868/en/

 
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(END) Dow Jones Newswires

January 15, 2019 02:00 ET (07:00 GMT)