Welcome to the latest Ticker TV interview. I'm Donald Leggatt, and I'm joined today by Brad George, CEO at Orosur Mining. They're the gold exploration company focused on South America. Orosur owns 100% of the Anzá license in Colombia, where it's advancing the flagship Pepas project and beginning a drilling program nearby El Cedro. OMI also owns 51% of El Pantano in Argentina, where it's starting a maiden drilling campaign. It has a market cap currently of around GBP 82 million as of this morning, and Brad George joins us from London to talk through the development pathway for their four major projects. Welcome, Brad. It's always a joy and a pleasure to talk to you.
As always, Donald, I'm enjoying being here. I'm enjoying the weather.
You're enjoying the cold, the cold snap? It does good a little bit of cold.
I'm missing the cricket this weekend, although you don't care 'cause you're Scottish.
I don't care because I'm Scottish. Talk to me about football though, Brad.
Oh, no, we won't go there. Or rugby. We won't go there either.
Oh, lovely. Certainly won't go there. No, we're not doing so well. Now, life is currently, well, it's never dull for you, Brad, but it's certainly not dull at the moment. What's been happening in the last few months since we spoke?
Quite a lot. I'm very busy. Obviously, we're now drilling in two countries. Well, I say we, not me obviously, but the lads are, so that's good. You know, the market likes explorers who actually do explore-
Yeah
... which is sort of an odd thing to do, but far too many don't. That's encouraging, and that will mean results are flowing. I guess commercially, we've had the resource consultants on site in Anzá for the last couple of weeks, and they've got some feedback now, and we can discuss that later on. It does seem to be the conference season. I was over in Toronto a couple of weeks ago with back-to-back meetings and in Zurich and London, so it's obviously at an end of year rush for meetings.
Yeah. Now we're expecting a maiden mineral resource estimate or MRE for Pepas, the Pepas gold project by the year end. Why don't you summarize the work that's actually going on on the ground at Pepas at the moment, and is that timing still appropriate? Tell all.
Short answer is no. I mean, I had aimed for December, but ultimately, I also made the point that it's not my decision to make. This is entirely in the purview of the resource guys. What we did expect was. Well, you know, we've had some holes recently that were a little short of spectacular, very thick and very high grade. That's good. I mean, we love high grade. There's ounces there. When you get grades that are substantially above the background, that does create some statistical issues. They become outliers. When you're doing a resource that can create, not a problem, but it, you need to define those high grades and to get their size, and you must understand what controls them geologically.
If you don't do that, then the resource guys will always just dumb them down, top cut them. The consultant said, "Look, you know, it looks good, but we would like you to drill a few more holes here, and here around the high grade," which means that will then take us into. We'd hope to get that drilling done by end of first week December, get the results back and close the database mid-December, which means the numbers will be early January, and the report will be late January. We're pushed back a month, which is probably. Yeah, but done for a good reason. We're doing it to get a much better resource. There's no prizes for being fast in this situation.
I'd rather do things as per the book, and we want the best resource possible.
Okay. What comes next after the MRE is done and published? Do you still plan to move Pepas into feasibility? I suppose the million-dollar question is near-term production. Do you still have plans for near-term production?
Look, that is the plan, but I've always given the caveat that if we find something different, then we might change. By having a resource, we now move Pepas into the feasibility stage. Ultimately, there were three, you know, internal reasons for deciding to go to resource perhaps a bit earlier than other companies might have done. One, as a company, we had a couple of rough years, and we felt it needed to get some rounds on the board, some asset on the board to give us a valuation, so that was a commercial market reason. Secondly, yes, it just makes sense. What Pepas is, where it is, you know, all the usual near main road, it just makes commercial sense to pursue near-term production given the gold price and given its nature. That just makes sense, and we'll do that.
Third, it's a permitting issue. In Colombia, to begin the permitting process, you need to have a resource and a sort of mine plan. This is how the system works there. By getting the resource done, by getting a bit of a mine plan done, we can fire the starting gun on the permitting process, and we can then modify afterwards. We can change as we go along, but we've got to start the process. We'll get the resource done, we'll get a bit of a mine plan done, and we'll get that permitting process begun in, hopefully in Q1 next year, and it will take as long as it takes. Yes, we are pursuing near-term production. It still makes sense. The caveat being, if we find a monster, then, you know, all bets are off.
Okay. Interesting. All the work that you're doing currently feeds into that MRE, and all the work that you're doing on the MRE then feeds into feasibility?
Yes. Yeah, and we've made the point, I guess also that from our point of view, we've only begun to explore in the Anzá project. Pepas is the first. That was an obvious walk-up target. We haven't touched APTA, we haven't touched El Cedro. Again, by having a resource at Pepas, we then have the market support to go and have some fun on those potentially bigger projects. The drilling at Pepas will complete, as I said, in December, and then the rig goes to the, you know, looking at bigger projects.
Okay, talking of where the rig goes, the other gold prospects at Anzá are El Cedro and APTA. What's happening there right now? What has the exploration work revealed? I mean, that's a biggie. Has it changed your thinking, and what are the plans?
I can give you a plan now, but the plan will change next week. Our plans always do, depending on the things, results that are coming. Exploration is fairly sort of a random business. The plan originally was to then move the rig after Pepas to APTA. We've kind of changed that now. We think that El Cedro, albeit undrilled, has slightly more exciting scale potential. The current plan is to look at drilling that in Q1. The caveat being we want to know more about El Cedro. I mean, it's a porphyry system. Maybe we have two of them.
Mm.
The issue, however, is that porphyry is often you know, while they're always the source of the fluid, the heat, the metals, they are, in general, a bit low grade. It's what's next to them and above them that's interesting, the epithermal systems-
Mm-hmm
that the porphyry feeds into. Those are the things that people want. We have El Cedro porphyry, very high grade in the center, but 8, 9 grams on the sides. We're commissioning an airborne magnetic survey now that'll be done in this couple of weeks, hopefully. That will better define these flanking epithermal targets, and we'll look to drill the El Cedro system as a first phase in Q1 next year. We think that once we prove the concept, it has a much bigger impact on us as a company. Anzá is nice, get it to resource, but that's not going to be a company maker. It'll be, you know, it'll be nice, but it's not going to be a monster.
El Cedro has potential that we think will be more appealing to, A, institutions and, B, larger gold corporates. That's the plan. We'll leave the rig around Pepas for a while, drill around it. El Cedro in Q1 and APTA after that. But again, next week, the plans might change. We think ultimately we do need to start testing these really big projects or really big prospects that to this point have been untouched.
You could have two company makers. Pepas could potentially be a company maker and, El Cedro could potentially be a company maker. Am I right?
Oh, absolutely. I mean, Pepas is, we think, certainly great for us because it just offers that very low-cost development, very low-cost production, you know, lots of cash flow early. For a small company, that's great. To get the market interest in the bigger end of town, you need to have millions of ounces. We've got a number of ways to play that game around Pepas, but certainly El Cedro is probably the obvious target that has the size potential. Now, I don't predict immediate success from the first drilling program, but if we can just prove the concept and get to numbers, then that gives us all sorts of options we can then explore. We can go it alone, we can JV, we can, you know, do a number of things.
Getting that at least over the first drill process and get the concept proven gives us, you know, a nice efficient point to reach at the end of Q1 next year.
That's El Cedro you're talking about there?
Yeah, absolutely.
Yeah. Excellent. Pepas and then potentially El Cedro, the two immediate priorities.
Yes. I mean, I think, you know, Anzá in the middle of project area, we need to run the last mile to get to a resource. While that will be a nice result, it's not going to be a Newmont-sized result. It'll be a nice result. Again, that'll be a nice adjunct to Pepas. It's just a sequence of how we do things. I mean, we'll do them all. It's just a question of which ones we do first and our view, which one gives us potentially the biggest bang for the buck in the current gold market. Now, that may mean, of course, we have a second rig at Anzá in the new year. So that's something we're giving quite serious thought to. You know, things will be getting busy.
All right. Let's talk Toronto. Let's talk Zurich. You were at the Red Cloud mining conference in Toronto, then you went to Zurich, where they predicted the end of the world. What were the institutions telling you when you met them? Were they saying, "Yes, we want to invest in Orosur. Yes, we want to invest in Colombia"? What was the mood?
Well, in Toronto, they already have. We've now got a shareholding base pretty evenly spaced between the U.K., which is more retail dominant, and then North America is now half the company, but institutions. One from the capital raising and two from the sale of the Newmont stake. We've got, you know, some really nice chunky names there. 1832 Fund, Rob Cohen, Eric Sprott personally, the Sprott Funds, Zecna, Ninepoint. We've got a nice mix of, you know, very nice funds. Now, these are all long-term mining funds, so they know what they're doing. They know the game. They like us for our technical. They like the project, they like the geology, they like the numbers. They look at the stuff, and they like the fact that we're offering two different ways of doing it.
We have a near-term production, small but high grade, and these really big untouched exploration projects. Their view is Pepas is a valuation, the rest is for free. They like that optionality that gives them. They also like the fact that we have this listing in the U.K., which gives liquidity.
Mm.
They can, you know, hold in Canada, but they can trade in the U.K. It kind of works well for them, so they're very happy. In Zurich last week, there are mining funds, but there's also this large group of family offices and other hedge funds that sort of are somewhat new to the game. They see the world running into problems. They talk of the Great Reset. You know, at some point, the bond markets will shut in two years' time, and they're seeing gold going to the moon, which is a bit terrifying. They want to be in the space, but they're facing quite a steep learning curve. I said, "Well, okay. Well, if you want gold, go and buy Agnico.
You know, maybe the junior markets are a place that needs some more homework. Certainly the appetite there is extraordinary. Every meeting you have, it just astounds me to see people that just think, "Well, we've got $1 billion." I think, who are these? Who are these people? There's so many pockets of money that are sitting around North America and Europe that I've never heard of, that have more zeros than I can count.
Mm.
The gold appetite is not going away. Yeah, I'm not saying we're gonna go to the moon, but certainly it's just the beginning.
It's a learning curve for you as well, I would have thought, Brad, encountering all these different institutions with their different needs and demands.
Well, there is that, and you do have to sort of try to aim yourself to what their needs are. That doesn't mean we sort of change tack every day. Again, we have the benefit of, you know, having these different things on offer. We can be all things to all people, so it is appealing. The Europeans, yes, as a view, do tend to be more focused on that nearer term production. You know, that gives us the benefit of having a foot in both camps.
Okay. Let's turn to El Pantano, the Argentinian gold project, located in a major Argentinian gold belt.
Yes.
I read the SP Angel report, broker note, the other day, and they're big on the Argentinian gold belt. It's a nice phrase, so I've picked it up. El Pantano is a bit under the radar so far. It's certainly getting more to the top of the agenda, but for years we've never heard of it. What are you hoping to establish with the current drilling program? It's quite a big drilling program. Then what comes next?
Yeah. I'm trying to temper the market's expectations. I think there's a slightly disturbing view that Pepas is the way exploration works. It's not. You don't walk up and drill the first hole and get that. Exploration is normally, you know, slow, painful, agonizing. It's a long drawn out process. We're not gonna walk up and drill a monster. That's not what this is about. This is a project chosen for its geology. It shows signs of having a massive epithermal system, but never been drilled. The challenge there is, well, if it's so big, where's the first hole going to go? We don't know, so we'll just whack a few in and see what turns up.
Yeah, history tells us, it normally takes, you know, a couple of phases of drilling to start to get interesting. That's the challenge for juniors because the market won't pay for that. The market gets bored after second hole. Again, by having Pepas, we have the luxury of being able to do these things. My view is this program is just geology. All we've done so far is surface work, mapping, sampling, geophysics, nothing subsurface. This is our first attempt to get below the dirt. The key objectives are, you know, find some structures, find out where we are vertically in the system, show the system is fertile and active, and I'll be happy. That will then lead us to second phase. We might get lucky, and that'd be amazing, but ultimately, it's just proving the concept.
So far, what we've been seeing in the rocks are, it looks really interesting. I think I made the point on Twitter that our first truck of samples has got to the lab the other day. It's a very difficult place to work. It's remote. Windy as all get out. I mean, it's the windiest place in the world. It's just horrendous. It's expecting our first results in the next couple of hopefully next week. And that looks interesting to us versus what we've seen visually, and the numbers will tell. I don't expect monsters. All I want is hints and sniffs that will tell us that it's interesting.
We again get to the point saying, "Well, so what do we do then?" If we've got this massive project in one of the world's most well-endowed gold districts, that we're gonna have this sort of interesting concepts, again, middle of Q1 next year. Again, end of Q1 next year, we find ourselves with this position of, "Well, we've got one resource at Pepas, inferred resource, El Cedro concept proven, we hope. El Pantano concept proven, we hope." We have lots of balls in the air. We'll sit down with a bottle of wine and figure out, you know, what we then do next. It's a good problem to have.
Yeah, a very good problem to have. You have lots of optionality, as you might put it.
Well, I think that's key. I mean, to have one project is never a good idea because, you know, obviously, exploration by definition is a story of failure. By having multiple projects, you're one, increasing your probability of success, but you can do things. Our projects, I think the key point is, one, that they're big pieces of land in key districts, and the current drill program at El Pantano will pretty much take us to ownership of 100%. It'll get right to the last minute. We'll own both projects 100%. That then gives us options. We can sell, JV, spin out, do. Now we have no plan, but the options exist.
Again, that is the only key that we'll assess the results and assess the market at the time and decide what is the best way to go forward, which way do we go, depending upon results and depending upon market appetite. We have lots of choices on our plate.
Now, we don't very often talk about financials, Brad, but, perhaps we ought to.
You are Scottish after all.
Perhaps we ought to. What does the balance sheet look like at the moment? What are the financials looking like?
Actually very good. I mean, well, probably one key point is we've got rid of Uruguay, so that's made the balance sheet look a bit less obnoxious. That was smelly for many years as a result of that mine closure. So that was all written off, gone, done and dusted at the last result. So that's gone. Cash is king. Ultimately, I mean, we talk about what makes a junior mining company attractive and we can. You know, cash is one of those things people don't talk about it, so just being polite. Without cash, you're dead in the water. Again, we were very, you know, lucky or clever to have raised money when we did at the end of Beaver Creek.
That's given us a very strong cash balance that on current burn rate sees us well into 2027. Now, that may accelerate if things go well, but that's done for good reason. Having removed the prospect of more capital raisings in the near term, you get that market overhang, so we can now just crack on and do things. That luxury, we're not gonna go crazy, of course, but that luxury being able to do things now without worrying about the next capital raising is quite liberating. That really puts us in a strong position. We're also looking at new deals, not in any great rush.
You know, doing deals in the bull market's always a bit wary, but you know, large market cap, cash in the bank, you know, it makes things very positive for us as a company. You just remove that risk and that downside.
Okay. My final question for you, Brad. Why should OMI be on any mining investor's watchlist? Why you? Why Orosur rather than all the other gold plays?
Well, where to begin? Look, it depends who you ask. I mean, a lot of punters talk about the need for management talent, and we don't have any of that, so I'll avoid that question.
You're a terrible man, Brad.
My view is it's all about the rocks. I mean, you could have the best talent in the world. If it isn't there, it isn't there. I mean, you just don't make deposits, you find them. You just gotta have the right geology and lots of it. I think our key advantage now is that we have two really big projects in two really key belts that look good in terms of geology. That's all there is to it. I mean, my sense is, and not everyone agrees, that the only competitive advantage the junior miner has is access to the right ground. Everything else is just fluff and bluster.
Yeah, maybe someone cleverer than me could do it faster, but you just need the right land in the right places, and we've got that. You know, obviously, at the right time, when the market's receptive to that. To me, it's all about land and rocks. The rest is just, you know, dressing.
Brad George, CEO, Orosur Mining. Thank you very much indeed for joining us from London today for sharing the development pathway for four of your projects. Thank you so much. I'm sure the investors got a lot from that. Thank you.
Total pleasure.