Hello, and welcome to Flagstaff TV. Today, we are joined by Brad George who's the CEO of Orosur Mining. Brad, thank you so much for joining us today.
Catherine, always a pleasure.
Brad, can you tell us why this announcement yesterday? It seems like there's a lot more to do on this deal.
Yeah, look, well, there are two reasons. Firstly, our Chairman Louis Castro is in Colombia right now at Anzá. He's meeting the crew, meeting our team, meeting the mayor, meeting local people. There was a, I guess, a compliance issue that Louis down there now saying things to the people of Anzá that we felt we needed to get into the marketplace. We couldn't have this non-disclosure issue. One was compliance. Two, I'd made the point at the AGM back in December that, you know, we were getting the project back. That Agnico and Newmont were withdrawing, fine, we get it back. In what form? There were a number of options available. We either get it back 50% or we get 100% or whatever.
I felt that it was important that we now tell the market which of those options we are moving towards. We made it clear that our option preferred was 100%. That's now largely been agreed. All the parties are violently agreeing that that's the best thing for us, best thing for the project. We've agreed verbally on the terms of that deal. It's now just a question of the details of the transaction and the process. I just thought it was a useful thing to do, one, for compliance and two, to give the market a heads up on what direction we are now going, albeit we're not quite there yet. Yes, it was.
It seemed a bit odd, but it was, you know, we had this sort of fork in the road, and now we've chosen a fork and we're on that path. It's just a question of letting everyone know.
Why did your large JV partners decide not to progress? It seems like the project has great merit.
I always say I don't speak on behalf of Agnico and Newmont. Well, I mean, they're obviously two companies, which is an issue. They both have different motives. My reading, I'm not saying I'm in the loop. Newmont is a huge company. It's done multiple mergers since it began the JV. It's got more projects than it can deal with. It has to just assess and prioritize. It wants to move on to other projects, largely as a result of the recent Newcrest merger. Colombia is not on their radar screen. Agnico want to stay. They don't want to stay without Newmont, or they've made it clear they don't really like the JV. They came in after the JV. They've always said they weren't a big fan of the JV.
They're always pushing us to make modifications, and we refused. My reading again is that they would like to break it all up, let Newmont go away, and then come back to us and talk on their own, perhaps in the near term. Their view is let's just finish everything off and then free themselves up to come back and talk. It wasn't the project technically, it was just Newmont had bigger fish to fry and Agnico are looking for a way to, you know, come back to it in a different direction.
In the announcement, it was noted that there was still much to do in terms of finalizing and completing the deal. Can you speak to how long this will take and also what we might expect to hear as it progresses?
I look forward to the day that I don't have to send announcements through the Agnico and Newmont legal team who tend to beat things with a baseball bat. Our announcements as a result are very dry and very boring and say nothing. Yes, there's more to say, but it's not as long or as bad as the announcement would have us believe. I mean, we've agreed, albeit verbally, on the end game. We get the project back. We're all in agreement on the basic terms of that. The question now is, well, what is the process? That's not an easy question. We've been working for the first half of last year toward them moving forward. Then suddenly to pivot middle of last year to us getting the project back, everything changes.
We need to be very careful that whatever the transaction is, we don't. You know, we're very careful. We don't want to be incurring any major tax issues or any major liabilities. You know, these transactions sound easy in theory. They're not in practice once the lawyers are involved. You know, we're all comfortable now with what the end game is. We've got a pretty good idea of what the structure is, but that needs to be some examination. Now, the easiest way is we just tear the whole thing up and we get project back. One option is we buy MMA. You know, that's one option being tossed around.
We're dealing with both of our JV partners, with the lawyers, and trying to assess which of a number of options might be the best way for both, for all parties to get this done. I don't have an answer yet. In terms of the process, we're all pretty much comfortable with the terms. We will need to sign off on those terms with an LOI, and then it's just a question of getting the legal DD done. I would hope reasonably fast. As we go along, you know, we're quite comfortable that we're gonna make a few announcements to make the market aware of steps that we're going through. It won't be three months of silence. It'll be, you know, we'll keep things updated.
I would hope that everyone seems to be in a bit of a hurry, which is encouraging. Apart from the lawyers, which is probably expected. I would certainly expect this to happen probably a little bit faster than the market might be reading into the announcement.
Now, your partners have invested a lot of money. Are you going to have to buy the project back? If so, for how much and when?
The answer is yes. They've spent probably of the order of $16 million. They're not gonna give it to us for free. They're giving the project back in a far better condition than we gave it to them. That's what we want it back. The question is, well, what's the transaction? We don't have $60 million, so that's easy. We've made it very clear that, you know, we're not in the position, either in the ability or any will to pay up front. If there's going to be a purchase price, and there will be, our position is, and so far they're comfortable with this, that it will come out of cashflow, any mine we ultimately find and build.
This is going to be in 10 years' time. You know, once there's a mine going, they will retain an NSR and maybe some cash payments, which to us is highly encouraging. They realize that we just have no capacity or will to pay money up front. It makes no sense. It's a highly prospective project, but we're not yet at the point of a resource or a mine. There's still huge risk to be dealt with. Any kind of remuneration or payment for this return of the project is going to be in, well, in quite a few years' time, subject to exploration success, subject to building, operating a mine. Again, those are things that we'll hope to announce as quickly as we can.
Right. Finally, for today, if this project does go ahead, what then?
Yeah, there's a question, isn't it? I mean, that's the whole rationale of wanting to get the project back 100% was that we get options. The JV had a facility that they could simply cease to contribute, we take over control, and we dilute them down. Us having 51% is we're kind of trapped. We just have to spend and work. We can't bring a new partner, we can't resell, we can't. We don't really know what the end equity would be because they could always come back in at their own choice. Our sense always was that getting it back in entirety gave us options. We could then go it alone, sell the project, bring in a partner.
We had freedom to do what we wanted to do depending upon the market, depending upon the appetite out there. Colombia is becoming more attractive, or it's coming out of its couple of years of political malaise. It's becoming a place to be. We're seeing companies get excellent results. Short answer is, I don't know. I mean, my view would be I want to go and drill. You know, I'm just one voter of the board. I want to go and drill Pepas because that to me is a absolutely spectacular walk-up drill target there. We can drill that. If that works, we can move to resource quite quickly. That's my view. El Roble, El Cedro are what look to me to be a wonderfully prospective, big porphyry system with high-grade veins.
Again, you're just itching to get in there. So my sense would be we want to go and drill, but let's just get the project back and then we'll sit down as a board and we'll all, you know, raise our hands and, or whatever and decide on an outcome. But at least the point is we have the options and that is the key issue.
Brad, we look forward to hearing more about it. Thank you very much for your time today.
As do I. Cheers.
Thank you for watching Flagstaff TV.