Good evening and welcome to our London South East Orosur Mining webinar. We've had almost 200 registrations for the event, and thank you very much indeed for joining us live. I'm Donald Leggatt, Director of IR Media at London South East, and I'm your host for this evening. We're delighted to welcome the senior management team at Orosur Mining. Chairman Louis Castro and CEO Brad George will be co-presenting tonight, or indeed it's just Brad actually, just been told, and then taking live questions from you afterwards. We've already received lots of questions, mainly around Anzá and the state, status of the JV, a few on tin in Brazil and gold in Argentina. We have just Orosur Mining with us this evening, so timings are a little bit more relaxed than they sometimes are. Brad's going to present.
I have a quick housekeeping announcement for you all. We're developing the investor relations service which London South East offers, are rebranding that part of the business focusIR. Whenever we speak to brokers, companies and PRs, we'll now be known as focusIR. To our retail audience who watch our interviews and webinars, we remain London South East, best known for its lse.co.uk website, its free data, and moderated bulletin boards. Tonight I'm joined by Brad George and Louis Castro at Orosur Mining, the London-listed South American metals explorer with projects in Colombia, Brazil and Argentina. In summary, in March it appeared that phase II of Anzá was underway with $2 million received from the Newmont Agnico JV. However, it would take several months to create the JV company. Well, no great surprises there.
On fourth of May, Orosur did surprise investors with an RNS announcement which said that Agnico Eagle Newmont had effectively placed Anzá on care and maintenance. Well, to explain all that further, I'm joined by Brad George. Welcome, Brad.
Donald, good to see you again so soon.
That's right. Well, in slightly interesting circumstances it has to be said. We've got a lot of good positive response from the interview which you did, and now you've joined us to put the whole thing in context with, I suspect, a fairly new look presentation. Over to you.
Thanks, Donald. Now the presentation, given the context and of the response from the market with the from the announcements, I'll run through the presentation as fast as I can. Then I guess try to throw to questions, because that's going to be probably the most interesting part of today's presentation. I obviously will speak about Ataquimes and El Pantano, but I think we all understand that Anzá is the one where there is the highest level of uncertainty. It's great to have Louis here to answer all the complicated commercial questions. Hopefully we can pass those on to him. I'll run through this as quick as we can. Usual disclaimers, clearly the share price performance is not what we would have liked.
You know, it is what it is, and we all understand the reasons for this. I'm fairly thick-skinned, and you know, reasonably comfortable with taking the blame for this and having calls on my head. I would, however, make the point that I've made over and over again that you know, Anzá has been and will for some time continue to be our primary price driver. Of course we can't control Anzá. We've had nothing to do with Anzá since it began operations in 2020 again. Yes, we might've done the work, but we do the work under the instruction of Agnico and Newmont. It's their money. They make all the decisions. If we've come to the market and said this is what will happen, that's simply us telling you what they've told us.
I'm not, you know, passing the blame. I'm simply pointing out the fact that the price you pay for having majors on your joint venture is that you have zero control, and I mean absolutely zero control. You know, we are as frustrated as everybody in some of the decisions that have been made and the way it's worked out as a result of internal, external situations. You know, it is what it is. The balance sheet of course is still fairly strong, and that's also a salient point that we're just shy of $4 million. That puts us in a fairly comfortable position and certainly in a far better position than most juniors in the space. The investment case really hasn't changed, albeit the Anzá project remains somewhat uncertain.
$4 million in the bank or thereabouts. Three primary projects, one of those, Anzá of course, is advanced, albeit clearly somewhat in abeyance. We are focused entirely on gold and we might for the moment call tin a battery metal. You know, the battery metals are normally, you know, your lithiums and your nickels and things, but tin's the one that we thought was a very interesting game to play, at a much smaller market. Anzá of course is still as we speak under JV. That hasn't changed. It may change, but we can discuss later on.
Two earlier stage projects, El Pantano and Ataquimes in Brazil and Argentina, both which were brought into the company for, we believe are very sound reasons and those reasons are, I think now beginning to show fruit and we can explain later on. Anzá first of course. I won't go too much into technicals of Anzá because obviously not a lot has happened for the last few months, and many of you would have seen, I won't sort of bore you with the details. We are north of Bogotá, west of Medellín in the Mid-Cauca Belt which runs along the eastern side of the Andes mountain range in northern Colombia. This is a back-arc basin system, and the Mid-Cauca Belt with these north-south structures plays host to most of the big gold projects in Colombia.
The chief of which is Buriticá, which is about 50 km north of us, currently being mined by Zijin, the Chinese firm. But that was obviously discovered by Continental Gold and Zijin took it over. They're all variations on the same theme geologically. There are porphyries at depth, and above the porphyries there are epithermal systems and veins feeding off those porphyries. The gold projects can come in a fairly wide variety of flavors as these veins come off those porphyries and interact with the host rock. It's a complicated environment, as we found out, but it does from time to time throw up some very juicy gold projects. The land holding is key. We have a large land holding. This hasn't changed.
We're a touch over 200 sq km, which was designed to cover what we believe at the time, and still do believe, is the main mineralized structure. The Aragón Fault running roughly north to south or, you know, south to southeast or southwest to northeast. We're all, well, by and large in the one municipality, which is key. Even though the mining law is state by state, the municipalities do play a role in the social aspects and approvals for mining. The Antioquia municipality is actually very mining friendly, and that makes a big difference for us. The terrain's rugged. It's certainly tough for an old guy like me, so it is quite expensive place to work, which is one of the key issues of having major partners.
This is a place for folk with deep pockets. The conversion of the application, so those red boxes are the applications. Now, we've been speaking for quite a long period of time now about converting those to granted licenses, and we've been working hard for the last 12 months to do that. The fact it hasn't been done is possibly one of the side effects of the recent change in government in Colombia last year to a new, slightly left-leaning president, that the mining bureaucracy has essentially ground to a halt in terms of many of the things that we'd like to see done simply aren't happening. New applications aren't being accepted. Applications aren't being converted. Integrations are delayed.
It's this non-workability of the bureaucracy that, to a large extent, is creating most of what we perceive as the political problems to the degree that most mining companies or exploration companies in the area now have stopped work. There's a few that are doing good work, but most exploration companies in Colombia have wound things back to a fairly slow pace, you know, just awaiting some kind of guidance from the government as to when these things will become unstuck. At the moment, we aren't getting any guidance on that. We are lucky that we do have some very substantial, very attractive granted titles so we can continue to work, but the applications remain somewhat bogged.
They're still secure, but somewhat bogged, and we'd hope to see those unstuck soon, but that's to a degree beyond our control. During COVID, when the project restarted with the entry of Agnico to join Newmont, drilling-wise, we stayed and drilled at the Apta prospect just to the south of the Mid-Cauca prospect. That was the original prospect that drew us to the project back in 2014. Drilling at Apta by the previous company had produced some spectacular results. We took it over, we drilled some more there, and then Newmont and Agnico came in. But obviously because of COVID, we need to operate safely within a bubble. So all the drilling and most of the work remained in the Apta COVID bubble. Although we did mapping and sampling along strike to develop new prospects.
Once COVID began to fall away, we were able to go and begin drilling to the north in early 2022, or early last year. As you might recall, the first few holes at Pepas were little short of spectacular, and that really got everybody excited, and then obviously we moved on to the prospects to the south, El Oble and El Cedro, looking very attractive geologically, geochemically, but as yet untouched drilling-wise. We would view those as very attractive drill targets to examine in the near term. To APTA in the middle of the prospect, it's been drilled since 2012. Some very high-grade numbers. It was originally found beneath old gypsum mine. It's turned out to be quite a complicated system. We think it's a hybrid VMS epithermal model.
We're seeing, you know, some great level of geological complexity over several pods, high-grade pods. It looks interesting. We think as a junior company that that's probably something we could move to a resource category if we chose to do so. Agnico and Newmont have chosen not to do so because that doesn't really give them any share price movement. Moving to an NI 43-101 resource is not really the sort of thing big companies do until the end. Different priorities, and again, the price we pay for having a major partner is that they won't do things that we would do if we were in charge of the project. A nice prospect. We think there's an ore body there, but we can't prove that until such time as we go back and drill to resource.
As noted, the move to Pepas beginning of last year had been awaited with great anticipation for some time, waiting for COVID to go. The first three holes were, you know, pretty amazing, and everyone got terribly excited. The issue, however, and this is inherent in the way drilling works, is that the first couple or the first hole into a new, let's call it ore body, but a new system, will give you numbers, but it won't tell you the orientation of the system, and particularly in this example, where the drill hole was positioned in the middle of the system and drilling outwards. Drilling from inside to out is not the way you want to do things. It doesn't really allow you to resolve dip or orientation.
What you would normally do then is to move the drill hole out to either side and drill back into the system, and in doing so, you'd be then able to resolve your dip and strike and shape. Then having done that, you would then begin to drill at more depth and drill it out. We didn't agree with the way the drilling then went on. Our JV partners decided to maybe do things a bit differently. They felt that they had some indications from stratigraphy that told them what the dip was, so they stepped out to the west and drilled deep holes down to what they thought was the target, and they missed it. You know, we've had some words with them about this, but obviously it's their money, they can do what they want.
We didn't feel comfortable with these decisions that they were trying to, in effect, answer two questions rather than answering one. They were trying to answer the dip and the depth at the same time. Having got the dip wrong, they, in effect, answered no questions. I think this was maybe, in hindsight, not a good idea, and obviously the impact on the share price was substantial because suddenly where's your ore body? We have a very firm thought that it dips to the east. But that leaves us with a very nice drill target should we ever go back. Obviously other events intervened and that remains untested.
For us, that's a very obvious drill target and it's one that makes the prospect for us, well, probably the key driver that makes this project very interesting for us in order to come back and reassume control. There's a walk-up drill target. That's the chats we're having. The key question, I guess, is where are we now? Phase I, the four year phase I ended in September last year, at which time $10 million were spent. They actually spent substantially beyond that. They spent about, at this stage, $3.5 million beyond that, which will roll over into phase II. They notified us in writing of their intention to move to phase II, and this was all done according to the rules.
The JV requires all notification to be in writing, so this was done. There were conversations about moving forward, but ultimately they paid us $2 million, as is required by the option in January, February. We had notification, we had the cash, and we had all firm reasons to believe that they were moving forward. We had spent a long time determining, and Louis will talk to this later on, determining the best way to restructure the company in order to exercise phase II. There had been some substantial changes to Colombian law that had made the previous plans no longer workable, so there was some issues there. But that was underway and moving forward.
You know, some time ago, well, not long ago, we were informed verbally, not yet in writing, that MMA were looking to reassess their priorities. Now, they didn't say specifically why, but I'm able to determine that really, you know, Newmont has moved on. They've just, in the news today, well, they are doing the Newcrest takeover, so that will keep them busy digesting that for the next 12 months. That will make them, when that goes ahead, probably at least three, pushing on four times as big a company that they were when they first came to the JVs. Their priorities have become, you know, significantly changed since they signed up with far more opportunities, and Agnico is not far behind, having done mergers themselves.
The view seems to be that they are now much bigger companies than they were. They're looking to reassess what they've now got as a much larger list of projects to fund. They can't fund them all, and they view that where things stand, and perhaps politically, but Colombia is the one that they might like to maybe put on the back burner for a while, and move on to other things. They've informed us verbally at this stage that they would like to assess the option going forward. At the moment, we've still not yet received any formal written notification. We are talking about how that might move forward.
You know, while that's frustrating to the market, we felt that that was important that the market be aware that we were talking, that they're aware that there was uncertainty. I would rather do that than to remain silent, because to remain silent implies that all things are going well, when actually it's more complicated than that. So we feel comfortable that, you know, that we are at least letting the market know what's going on, and we are pushing as quickly as we can with all the levers we've got to find some resolution, some plan moving forward. Now, what might those outcomes be? Well, you know, I don't have the ear of Agnico and Newmont, so I'm not privy to their internal workings. But as I see it, there are probably three, you know, general ways this might play out.
Option one, we carry on. We carry on restructuring. We get the work done, we get the new company set up. That essentially buys time for the politics to settle, for the bureaucracy to begin to work, and we move forward as before. Option two, MMA might view or might try to find a buyer for its 51% stake. Now, it has earned that stake. It's done all the required work to earn that stake. In order for that to crystallize, we must complete the restructuring of new company. If they do wanna find a buyer, we have to go through that system first. That might take some months. We do have the right of first refusal, but not being full of cash, that probably wouldn't happen.
The lever we do have to pull is that we would make sure that any new buyer is fully aware that they would need to adhere to the letter of the joint venture. We had for some time been talking to Agnico Eagle about making some concessions to make the project more attractive to them. If they sell, then that's off the table, and we go back to the default position of the JV. That is probably not going to be that attractive to a smaller company. The JV was written very specifically for a very large company with very deep pockets. For a smaller company, they will possibly look at that JV and find that the obligations cash-wise are quite onerous.
I'm not entirely sure what the list of buyers would look like, but it would be a short list. To my knowledge, there have been no conversations yet. No chats been had. It's a simple option they have available to them. Option three is that we want to or we would prefer to reassume control of the project, and we've made that quite clear to Agnico Eagle. I don't know how that would look. You know, there are variety of ways that might work out. We could buy the stake back in some way, or we could dilute them down and earn our way back in by investment, or a combination of both. The beauty of this for us is that if this happened, we would not need to go through the restructure.
We could do that, just leave things as they are and move forward and get back to trading quite quickly. At the moment, the situation is we've made it quite clear that we don't want to sell. We've made it quite clear that we actually want the project back, and we've made it quite clear that, you know, we've given them some ideas as to how we think that might go forward. They've informed us that they're assessing those options, assessing our, I won't call it an offer, but assessing our ideas, and they certainly would like to get back to us as quickly as possible. You know, they can drag on for a while, but they have no reason to do so. As things currently stand, they're paying the bills.
To maintain this project, even in a care and maintenance facility, is expensive. They wanna move on to other things, so fine. They're all under the same pressure to move this forward quickly. I fully expect that they are operating in good faith, and we can hopefully come to or advance discussions reasonably quickly. You know, we can, again, I'm sure there'll be questions we can expand at the end of the presentation. The other projects as you're aware of are in Brazil and Argentina. They're both early-stage projects. We explained the rationale very early on as to why we did this, largely because we felt that geologically, having looked at scores of projects, that most of the new projects on offer were very poor quality.
They'd been around the traps through six companies, and you're really flogging a dead horse. My view was that, you know, if five companies couldn't find it, then what am I gonna do? They just weren't really worth the money that was being asked. We went back to square one, and we argued that looking at grassroots projects, but with, you know, with a scientific mind, with a far more cost-effective way of finding bricked projects. We wanted early-stage projects, the criteria being very large, as large as possible landholdings. We wanted to be in regions that were not only mining-friendly, but where there was obviously evidence of big projects and big deposits.
We wanted a project to show clear signs of at least some mineralization process having gone on, so not just smooth pasture. We wanted very low or preferably zero entry costs. We wanted a JV that gave us a low cost for the first few years to give us time to get our feet on the ground and move forward. We wanted projects in good, easy terrain that we could advance quickly, cheaply. We wanted projects that gave us options, that were not just a binary outcome, that we could advance forward and add value, and then always at every stage assess whether we move forward again or we JV out or whatever. But every step of the way, there's an option. Both of these projects met both of those criteria.
To Araxá in Brazil, it's a tin project, but it's actually more than tin. The opportunity, again, it was a JV with a Canadian company, Meridian Mining, massive landholding, 3,000 sq km, in one of the world's largest tin-producing regions. Exploration-wise, it was essentially untouched because most of the mining there is undertaken by artisanals or local cooperatives. There are no foreign miners there per se. They just mine and they move forward, you know, day by day. Fine. No one's ever explored in what we would think of as a scientific or modern way. It's got, you know, largely untouched.
Because of the cumulative volume of production, there are a number of tin smelters in town, and therefore the infrastructure required to process the material is already in place, which means that our size cut-off is very small. If we had to ship material overseas, then of course your deposit needs to be bigger. Because we ship to town, we're fine. Again, that gives us the ability to make small things work quite quickly, and again, the options are there. The challenge of course is that, there's no work that had been done, so we need to go back to square one and collect all the underlying base data that would normally be in place. We're starting from scratch, starting low.
That again is why the JV is done the way it is, to have a low-cost burn for the first few years. As I said, 3,000 sq km. The JV, $3 million over four years burn three quarters. Tin is an unknown metal, but highly valuable. The price now is $25,000 a ton. Did hit a peak of $45,000 a ton last year, so it's quite volatile. Tin supply in the world is quite fragile, quite controlled by China or out of non-ITSG production out of Southeast Asia. It's a metal that's quite important, the primary use being solder. It is what solder is. It's increasingly becoming sought after, particularly by companies that really want to be able to secure their long-term futures.
It's a metal that's somewhat unknown, but it's called the spice of metals because there's a bit in everything. To us, it's a metal that's highly attractive. The other thing of course is that it isn't just tin. The other metal that's found often in the area in the same quantity is niobium. But niobium in the region is not really exploited in the same way for reasons I'll talk to later on. We have good base data. This map is the magnetic data that's provided free by the government, and we understand where the tin comes from. These large circular features are large grants. They're the source of the tin, and we then look at channels coming off those.
We know where to work, and we're moving forward from a regional start. We will get back in there and start second phase of work in June. For the last six months, we've been undertaking regional sampling. Because of the size of the area, we needed to start a broad brush, and there's a road network of roughly five by 10 km grid. We've been using that and taking extreme sediment samples across the entire area that took about six months. But that's now given us a very key map of where we think the primary areas are. These two images here is tin on the top and niobium on the bottom. As I said, we always find niobium with tin. That's the way the geology works.
The locals don't exploit the niobium because it's not something that they can smelt locally. It's, it tends to be just sold illegally or just given away or left in the ground. The two are roughly of similar value, so it's, sort of, it's highly attractive. We're now working on areas of high priority where we think the next phase of work will be done. I would, I guess, draw your attention to that little block out by itself to the eastern side where that circle is, which is one of our key areas of focus starting work in June. This is the blow-up of a satellite image of that little lease.
The key thing we see is that there are some very substantial old alluvial tin workings just to the north of that lease, which stop at the lease boundary. We, you know, we know that there was substantial tin mining going on right to the boundary of our license. Within our license, we know we've got substantial tin and niobium anomalism. You know, that's an obvious place where we think we are highly confident of finding some substantial tin niobium resources, and we'll assess those in coming weeks and coming months. The other project, I'm sort of conscious of time here, is El Pantano, Argentina, a gold project. We're in the south of Argentina in Santa Cruz Province. Again, a large land holding, 600 sq km.
Almost entirely unexplored, which is really quite unusual to find in a key producing region. On the surface, we're seeing evidence of a massive epithermal system. It's quite extraordinary to find this system that no one's ever walked over. The other odd thing is that we have the right to own 100%, which is very unusual sort of JV. Again, the optionality that we have is quite substantial. The major mine in the region is Cerro Negro, owned by Newmont, our biggest shareholder. They've come to the project. They like the project. No deal being offered or asked for, but we're certainly sharing data, and they are assisting us substantially technically to give us the benefit of their experience to move us forward.
They are watching and tuned from the sidelines. The challenge of course is that, one, no work being done. Again, work from scratch. It's a big system, which is the key benefit, but also how the hell or where do we start? Yeah, the concern is, well, on such a big project, where do you drill? We need to be very focused on making as much use as we can of the previous companies to help us focus the early work. You know, we are working closely with Newmont to really see what we can do. I won't bore you with technical geology. We're in the Deseado Massif. What we're looking here is rift systems. We have. We are well east of the Andes here now.
Underlying magmas come up, and they crack the rock, and they push the rocks apart, and we get these long, southeast, northwest rift valleys that are the major conduits of fluids coming forward. This is your standard model in the Deseado Massif. We're in a low sulfidation epithermal model, which is of a generic style. Exactly what Cerro Negro is. The key thing to notice, however, is in this particular style, the mechanism that causes the gold to come out of solution and form deposits is the boiling of the fluids. As the fluids come up from depth, they're hot, they want to boil. But they can't because of the confining pressure of the rocks. Only as they come up, they then begin to boil as the pressure reduces.
The gold dumps out, and the quartz veins then still carry on upwards, but there's no gold. We see quartz veins on surface that have no gold, but the gold is below. We need to change our focus and exploration assessment to focus less on surface geochemistry of gold and more on surface geochemistry of primarily mercury and arsenic, which are the main pathfinders, the gold having dumped out below. We've seen this example in the past Cerro Negro, where it was the third or fourth company that found the deposit because the previous three didn't understand this mechanism, and they were looking for gold at surface when the gold was 100 meters down. We understand this. We're seeing this massive system of epithermal alteration and pervasive coverage of mercury and arsenic. It's all looking very interesting.
Again, why we were there, and the main appeal, I guess, when we looked at this region in the JV, is that this was the first time that this whole lease package had been brought together in one block. Previously, it had been broken into other companies and other blocks. This is the first time it had ever been amalgamated. The image below, which is the very rough quality, regional geophysics, airborne magnetic data from the government, shows this huge southeast-northwest rift structure, which looks, to me it looks obvious. Again, why no one had been there before is somewhat confusing. We only put it down to the fact that, again, that the leases had never before been amalgamated. It's the right project at the right time when everything's put together.
We're at the moment coming to the end of our first major phase. You know, we're a long way south, our winters are quite cold. They'll be out of the field in about 10 days' time and stop for the winter recess. We're covering everything with ground magnetics to get much more detail of the structures of the rift, of that rift system that obviously control mineralization. We've done some major soil sampling work starting for gold, but ultimately then moving toward the mercury and arsenic. We're finding, you know, very large areas of pervasive geochemistry in pathfinders. To the north, we're finding huge areas of quartz veining. Everything we're expecting to see, we are finding. We're finding alteration, massive silica flooding, massive quartz veining, and massive geochemical anomalies.
It's looking good. We now stop for winter in a few days' time, and we will come back after winter and move those forward and begin to define drill targets to look at drilling hopefully end of this year. I'll leave it there. Really, where we are in the next six months is what's going to drive us as a company and drive the share price. Point one, obviously resolve Anzá, because everything beyond Anzá will depends upon the outcome. We're moving forward to the Ariquemes, defining zones. We want to define work programs at El Pantano and define drill targets. Obviously, the resolution of Anzá will have effects on the other projects in terms of workflow and money.
That number one priority is Anzá, and the other projects may be modified depending on the outcome of Anzá. That's the number one priority. Failing that, we move forward on other projects which we see moving toward advanced stage in the second half of this year. I'll leave it there and happy to throw it over to questions, to both myself and Louis.
Okay. Thank you very much indeed, Brad. That was very interesting. You never fail to surprise. You're very sanguine and taking all that in your stride, Brad. Very good.
My middle name is Sanguine.
Well, I thought that was fascinating. Thank you. I got some interesting detail about, you know, the two other projects. I thought that was fascinating as well. Anyway, as you say, probably that's not what people are here for tonight. How would you summarize the current situation of Anzá, Brad? You're the man who's been speaking to all these folks. What's the latest?
Look, I fully understand the angst and the uncertainty about Anzá. I'm not being, you know, dismissive of that. Again, I stress my comment at the beginning, we have limited ability to control what's going on there. I mean, if it was our project and we were in control, then we'd be having a very different conversation. You know, we enjoy the security of having major companies spend their money, which was tremendous. If they wish to choose their change their minds, as they're entitled to do, then we need to obviously adapt to that. Now, I don't care which way they go, whether they stay or go, but I want them to stay or go. I don't want them to sit there for six months thinking about it.
The uncertainty is, I think, what's killing us, and certainly what is frustrating Louis and I, is that we want to be able to react to their decision. To do that, they've got to make a decision. This is currently where we are. We're trying to push that as hard as we can.
Presumably indecision is something that you're familiar with from super majors and majors because they've got a heck of a structure to pass things up and then back down to, and to take decisions. That if you say that Newmont had taken over Newcrest, you seem to be indicating that was news today, then they're talking about other things. They've got other things to look at, haven't they?
Well, they do. If we look at the timing. Newmont entered the joint venture in late 2018. Early 2019, they did a merger with Goldcorp, which is a similar scale merger. That took a year to digest, you know, because you're getting two big companies stuck together. It's a big. I mean, little old Anzá is a long way down the list.
That's where we.
Technical issues with you, Brad. Your internet connection has gone down on us a wee bit. Why don't we cross to Louis?
Yep, go ahead.
Give Louis the next question, and maybe you switch your machine on and off again. Would you do that for me, please? Louis-
Yes.
Can I ask you, have Newmont and Agnico been in touch since the fourth of May announcement?
We-
Brad was talking, it's not formal.
No.
You want it in writing. They've not been in touch in writing, but informally, have they been back in touch with you?
We're talking to them regularly. There's two processes going on right now. They're keen to get on as we are. This costs them about $700,000, $500,000-$700,000 a year just on care and maintenance. They've got a very strong motivator there to get on with this.
Look, care and maintenance is not particularly a good thing for them either.
No, exactly. That's pushing them to get on with this and sort it one way or another. Plus, they're a big company, and the options they're looking at, they want to pursue. The three options are talk to us. We're having discussions with them. As Brad said, we've got some ideas for them. They need to come back to us with those. Secondly, we're moving ahead with the restructuring so that we're doing the restructuring through a merger for reasons I will go into in a few minutes. I think there's another question which leads to that. The restructuring is taking time, but we are talking to them on a weekly basis. The relations are good. It's principally with Agnico.
Agnico are the guys who are driving Minera Monte Águila, which is a combined JV. We talk to them principally. It's happening.
I suspect Newmont, it's unavoidable. They've got their hands full with other things, haven't they?
They're pretty busy. No, we're in touch with their chaps who were involved in this since the beginning, so I can get hold of them, and I do get hold of them when I need to. It's enough to talk to Agnico as representing both of their interests at this stage.
Good. Brad, are you back with us?
I'm back. Sorry, I had a bit of a Wi-Fi issue. Apologies.
No. The Wi-Fi is how Wi-Fi is, you know. Where would we be without tentacles? Okay. Interesting, if quite challenging question from Francesco Cicero, who kicks us off by asking you, Brad, in fact, "While accepting that things don't always go to plan, you must have seen the current situation coming well in advance," he says. "Have you got an unambiguous step-by-step plan for the next months and a clear set of priorities that you will pursue to get OMI out of the current situation?
Well, that was, I guess, addressed in the last slide. I mean, yes, we have a plan, but that's not ironclad because it is entirely subject to what happens with point one. You know, we understand that not only is Anzá of most appeal to the market, it's of most appeal to us. The other projects, you know, we're very excited by, and particularly, I personally find El Pantano quite exciting. But I get that it's early stage, and I get that it won't be the market for some time to come. Anzá is a project that, for a junior company, is really quite extraordinary.
The ability for us to walk up there and re-drill Pepas in what I think is a, you know, the correct way, pardon me now, I don't wanna throw Nico under the bus, is really quite exciting. We just have to get it. That's the key. If we can get that project back in a form that we think is workable, then that becomes number one priority. You know, that's one branch of decision tree. The other branches are we move the other two projects forward to the point where they begin to show results that the market will begin to value. This, I guess, is the key that for 20 years, you know, the markets don't value early-stage exploration. The markets value drilling. That's the way the market works.
We need to move those projects as fast as we can, as cheaply as we can, to the point where the results are tangible enough that the market began to see some value. That's ultimately the summary of that last slide is to get things moving to the point where the market itself can begin to see the value and begin to ascribe the value to us. Point one is the key that determines the direction.
Okay, let's throw the next question to Louis. Our second question tonight from an investor is this one from Dave Hilton: "With all the recent uncertainty, would you consider selling Anzá sooner rather than later if required to fund the other projects? And if so, would there be a minimum figure you'd consider accepting? And if such offer was received, would shareholders get to vote on this, minus Newmont, if they were the ones making the offer?
Well-
You've been pretty clear that Newmont and Agnico are not playing silly buggers and that's not what's gonna happen.
Yeah.
But, um-
Yeah. Taking each of the points in turn, and thanks. A good question, actually. I'm sure lots of other people will have similar questions. Would we consider selling Anzá? I think it's the wrong time to sell. The politics aren't right. We're not gonna get top value for this, and there's a lot of work still to be done on that processing before you maximize the value. You know, would I consider selling it now? The answer, probably not. You're never gonna say no if the right number comes along. By the way, you're saying, what's the question is, what's the minimum? My response is, you know it when you see it. I certainly wouldn't put a ceiling on any number that may or may not be coming.
Yeah, if it's big enough, of course, we'd need to look at it.
Do you still believe in Anzá as a project?
Say again?
Do you still believe in Anzá as a project?
I think.
Do you think it has tier one potential?
I think the project is unique. I really do think I believe personally this could be a mining district, not one mine. We've looked at two out of three things that we have drilled have shown fantastic bonanza grades, APTA and Pepas. Lupino, less so. There's another five targets to go to. Do the sums. This could be a very, very interesting mining district going forward.
However, coming back, the next question that Dave had there was to say, "Look, would we need shareholder approval?" The answer to that is just in the dull but, you know, rules that we follow on AIM, which is, if there's a fundamental change in the business which represents 75% or more of the company, yes, we do need to go to shareholders, and shareholders do get a vote. That will depend on where the other two projects are now. We're no longer a one-asset company. We've got three assets. Brad's absolutely right to point out the promise of those other two assets which we think are quite exciting, in particular the Argentinian one. There we are. We know the market's all about Anzá right now.
Those are the answers I have right now in response to that.
Okay, let's talk about the new company. Is it a deadline for Agnico Eagle Newmont until the new company has to be established, or can they play hardball with us or simply dither for as long as they want? I suspect it's lack of a decision rather than hardball. That's what you seem to be saying to us.
No, you're right, though. Look, it's lack of a formal decision. We haven't had that formal decision, as Brad said. We haven't had it in writing. But there's clearly they are looking at their options and the need to get the data ready if they're gonna be in a position to make a choice. That's to say, put the data together, so if they wanna sell, they can sell. They're going to do that. If they want to stay, they can also do that and look at where they are and where the politics are gonna be in a few months' time. If they want to sell to us, we're here for discussions. We've approached them, and we're in discussions. I don't know how long that's gonna take.
you know, we do talk to them regularly, so there will be discussions on that option as well. All options are up in the air. Can they play hardball? Look, I think it's big companies, so they're making decisions that I think they're gonna get on with it. It costs them a lot of money to just sit there doing nothing. They are pushing on the restructuring. In due course, they will look to see if there are any buyers for that stake. Depending on what the politics is and what offers they may or may not have will drive their decision as to which option they follow.
You think they're too big to, you know, bother about, you know, trying to squeeze you on price and all those different things. It's just a case of-
Yeah. Donald, look, anybody can play hardball and get difficult. The fact is we're sitting on $3.8 billion of cash, so we're hardly in any time pressure right now. If these guys do not follow phase II, the requirements for phase II, the 51% they own right now, we get back. The 51% reverts to us, and they get left with 49%. Now, that might still-
What do they need to do to?
Not comply with phase II [crosstalk] which is every year they need to spend $4 million. Now, they've already done the first year $4 million. Phase II doesn't start until this blessed joint venture company is together, and I'll come back to the timing of that. From that point at which the joint venture company is formed, that first year of $4 million they've spent already. After that, if they don't carry on spending, this project reverts to us at 51%. That's why they need to get on with things as well.
Okay. This is a Brad question. Brad has alluded to the preferred option of Orosur bringing Anzá back into Orosur's own hands. How do you expect to achieve this, Brad? Will there be significant dilution for current holders? And have conversations been had with potential investors? Well, it's fairly early days, but what's your thoughts on that?
Well, I guess there's two questions here. I mean, dilution is a fact of life for any junior company. As much as, you know, we get abused for it's a fact of life. To this point, I think, we have been pretty good on that respect. We raised $6 million back in 2020, and we haven't raised money since. We've done a good job on that in that sense. Would there be dilution?
To be fair to you, that means you've still got $4 million, haven't you?
Yes, it does. It's more than likely. There's always gonna be dilution. The degree will depend upon the outcome. Well, if that happens, which way do we go? If we buy the project back, we're not gonna give them cash. We'd rather not give them cash. There'll be money putting into the ground drilling wise. There will need to be additional cash raised, but not immediately. We'd raise cash as and when the result dictates somewhere down the line. Have we had chats? No. We've not approached brokers. We have, at this stage, no plans to raise capital until and unless we need the money based upon results. Yes, there'll be dilution. There always is. At the moment, that's not on our plan to do it. There are no forecasts for that.
Okay. Both Dave Hilton and this is a Louis question.
Mm-hmm.
Both Dave Hilton and Steve W mentioned Turner Pope and the Collective Mining company-
Yeah
-being a possible partner. Have discussions taken place with them? For the broader audience, if you could explain who Collective Mining actually are.
Sure. We'll do, Donald. It's Collective Mining, and they're quoted on TSXV. The chap who runs it is a guy called Ari Sussman. Ari very successfully sold Continental Gold, which is active in Colombia, to Zijin. They're the ones that got the massive project just to the north of us. He did rather well for himself and put money into Collective Mining. He's been really funding it all the way along until about two months ago when Collective Mining raised some $30 million in Canada to develop. It's a copper project they have currently in Colombia. They're one of the few companies that are really active right now. Most other people, as Brad said, have slowed down in Colombia for the reasons that we've already outlined.
Mm-hmm.
My view is it's slightly too early to talk to them yet. Let's see where we are with Agnico Eagle so we know what it is we have to play with. Until that's settled, you know, you're turning up without knowing whether you've got to play football. You haven't even got the ball yet. There's really no point doing that.
You've got to let it settle.
Yeah, totally. Plus we know them. We have spoken to Ari in the past at the time that we were talking to Agnico and Newmont. The relationship goes back a long time. When we have to pick up the phone, if we want to pick up the phone, we can do that.
Okay. Very good answer. Louis, let's continue with you. Oliver Middleton asks, "Has there been any suggestion by Newmont or Agnico or both that they might purchase the whole Anzá Project outright?" I suspect the answer is no.
No. They're looking at other options on this, actually, and that's not at the moment what they're looking to do. As Brad said, policies change, things change, and they're not one beast. Newmont and Agnico, their priorities are different. Their prerogatives will be different too going forward, so we'll have to see how things develop. Right now, no, I wouldn't say that's something which I think will happen.
Okay, also from Oliver: "How long can we remain in the situation where phase I is complete but phase II is not yet begun?
Well, look, shall I go into exactly what we're waiting to happen and why it's taking so long?
Well, yes, please.
Yeah, that.
In detail.
That might be helpful.
You can't give this in too much detail because everybody's fascinated by this on the boards.
Sure, okay. Well, look, because of the change in the rules, tax rules principally in Colombia a few years ago, the 90-day period where we're trying to squeeze everything in is just impractical because now we need to do a whole restructure before we can do that. B, you wouldn't want to do it anyway because you have to go and seek permission to effectively look for the authority for the titles to be transferred to a new company. For regulatory reasons and tax reasons, we can't then go down the three months, 90 days, let's get on with it. What we have to do now is create a new co. That's that new co has already been incorporated. That new co will be merged, so this is a downstream merger.
It's a merger of Minera Anzá, which is our company which owns the titles. That will be merged with new co. Once that's merged, we'll move out the non-target assets to a different company altogether, and then we issue the shares from new co, the initial new co that's already merged with MA. We'll be issuing 51% of the shares in that company to Minera Monte Águila in exchange for the $16 million odd that they spent on the project. All that.
That new co is definitely being progressed, and do you think it will definitely happen?
Yeah, that new co is gonna be incorporated. What's happening right now is the Newmont and Agnico are doing their due diligence because all of a sudden they have to be they have to come into our group structure, which they hadn't anticipated either. They're because we are merging our company with theirs. They're doing due diligence on Minera Anzá right now. It's clean, it's fine, it's all going well. But they need to do that. They need to tick the boxes and all the rest of it, Donald. These things take time. Every time on each steps, we also need to do an audit. That's why it's not 90 days. It'll be closer to seven or eight months, I'm afraid.
You know, that's the pace of things, and that's the way we need to do it to avoid an even longer time period, having to look for authorization for the transfer of titles and to avoid tax repercussions for both sides.
Rightly. There you go. Okay. Well, that was a great answer. Thank you. Oliver, Dave, and others ask the same question about the other projects. Over the next couple of years, Orosur still need to fund $1 million of spending in both the El Pantano and Anzá to meet their respective earn-in JV agreements. Is the expectation that the company's current resources are sufficient, or will you need to raise more money?
Yeah, no. With for these two projects, we've got the time to perform. Brad in particular, very good relations with Anzá. If we need to extend that because they wouldn't want to spend too much money on it too quickly, we've got better uses for funds, then I'm sure we'd get an extension on that. If you read it, yeah, it does look as if we're gonna have to spend a lot of money, but actually we're on time in relation to the expenditure for the El Pantano project. Anzá also is something which affords us flexibility. We're not gonna be running out of money to spend on those two projects.
Anzá, do you think you can stretch it out a little bit?
Yeah.
Okay. Very good. Let me also ask Louis, you've given the impression that Newmont. Well, I think, to be honest, we've covered this really. Sorry, Jeffrey. Is everyone just sitting on their hands, he says? Well, yes, they sort of are. Yes. Let's Louis, let's Kieran McGrogan.
Yeah.
He's thinking about the Schedule 9A, the element in the contract, in the agreement. In particular, the stipulated 90-day period.
Yeah.
What in your view needs to be done within the 90 days and how it's done? Well, you've just told me the 90 days.
Well-
is actually seven or eight months, and it's actually.
It is. For the reasons-
Kind of rubbing along, it turns into a very different thing.
Yeah
I don't know if there's anything you can add. Brad, would you like to add anything on that just to get a different perspective?
Well, I mean, no, I'll leave all the commercial stuff to Louis 'cause you know, he's far smarter than I am. Yeah, he makes the point that the JV, as it was written in 2018, it's a good JV, but the rules changed. Colombia changed the mining or tax laws after that, which made the original plan simply not workable unless we were prepared to pay a massive tax bill, which we're not. You know, we can't help that. That's the way the law changes. You adapt as you go. In terms of the other question about raising money, you know, obviously, when we say we're gonna spend $3 million in this part of that project, we only spend $3 million if every step along the way gives us positive results.
If we spend $1 million that's negative, you know, we'll walk away. We don't have to have the money in the bank for all of these projects at the moment. We go stage by stage. Every step of the way, there's a decision, there's an assessment. You know, we examine the results, and we decide to continue or to move on. You know, it's always a question asking a question geologically that you know. If that's a positive response, then the next phase goes forward. Every little bite, we go along. We're absolutely comfortable with the money we've got that we can answer the main questions. We would only be moving forward to more advanced work, you know, once we get positive answers.
We're taking very small bites and very, very small steps. Obviously, we're being very cautious right now because of the uncertainty of Anzá, which if we get the answer we want, you know, can change everything. It's, you know, we're just being cautious.
Okay. Well, Francesco Cicero and several others make this point. The share price is at its lowest point in a couple of years, and would you consider buying material amount of shares as a positive buy signal about your support? He says, as a private holder like myself, I hold significantly more shares than you do, and under your leadership, I'm down 80% on my investment. I think he's cross. A few other people are across. What's your response to that one?
The same response we always give, that, you know, while we appreciate, you know, your support, our ability to match your investment is severely constrained. I mean, Louis and I have just recently bought some shares. Our ability to do so is very difficult. We are on blackout periods most of the year, or we know stuff, and we take a very firm view that we don't allow ourselves to trade unless there's absolutely nothing happening. That happens twice a year, if we're lucky. Obviously, for the last few months with these discussions with Newmont and Agnico going on, we're totally offside. We simply, you know, other companies may take a more relaxed view on that, but we take a very firm view that we only allow ourselves to trade in very specific periods.
Why aren't we buying more? Well, you know, I'm not as rich as I would like to be. So, you know, I appreciate those who own large amounts of shares, but everybody has their own particular circumstances, and I have mine. And I buy as many shares as I'm able to when I'm able to.
Okay.
Yeah, I would echo that. This is the third time I've gone in on weakness to buy, and I do what I can do. It's as straightforward as that. Nothing else.
Okay. Given that we've got you now, let's hold on to you. Paul Winning. Louis, let's hold on to you. Paul Winning asks, how does the board propose to restore shareholder value?
Well, I think we go through the steps that Brad just said. Let's resolve and sell. That's the principal one. Let's get something done here. The way here is we either get it back and we start to add value ourselves, or we get the restructuring done quickly, and we get Newmont and Agnico in a position where they can go and sell that 51%. Because we don't wanna be hanging around with nothing happening. Activity is what we need to be looking for, and that's what we're doing currently.
Louis, how does the board propose to be able to buy back the 51% equity position from the JV partners?
There are a number of options. One can put money into the ground, if you like, and dilute the 51% to less than 51%. 51% is the magic number that you need to get to have any influence over this thing. We buy the 51%. Now, we haven't got cash to give, but you know, we've got other currency that we would be able to use. That might be considered as well with the other side. There are ways and means of doing it. Is it gonna be some dilution? Well, that depends on the value that you get back. You may be diluted in shares, but actual value per share might go up precisely.
I wouldn't be so much worried about dilution 'cause the value, you will have that 51%. You have the control premium, which would be significant. I'd be surprised if the value per share doesn't go up, even if dilution has increased.
Yeah. The company ultimately is worth more. Yes. Okay. Brad, what happened to the samples which were sent back to Peru for retesting? Adam Johnson, Clint Roach asked that one.
They might be misunderstanding what that means. There are no samples in the lab in Peru. There are re-assays happening all the time when assays come back.
It's a re-assay.
Yeah. When an assay comes back over 10 grams a ton, it must go back for re-assay, because the normal fire assay has a 10-gram limit. There's always samples going back for re-assay, then they come back, and then we announce. That's been one of the drivers for, apart from the lab being slow, of delayed assays because we had lots of over 10 grams. That's always being re-assayed. As we speak, there are no assays in the lab.
Okay. Short and sweet. Louis-
Yeah.
Final question for the evening. We're out of time, I'm afraid. It's
Sure.
Three minutes past seven. Let's ask you the final question from Kieran McGrogan. Without formal creation of the new JV, MMA own nothing. OMI are 100% owners of the project at present. If the contract is not clear on time frames, do OMI intend to allow MMA unlimited time or draw a line in the ground, a time frame within which MMA will make decisions?
Let me just put something right straight away, actually. They're not strictly speaking 100% owners of the project right now, but they have earned their way to that 51%. Frankly, they gave us life, money. We wouldn't even be around today if they hadn't paid up as they had done in the past. That was Newmont before Agnico arrived. Agnico have delivered. They've created a new target. They've added value to the project. They've earned their 51%, and they've earned it in a good fashion. Probably done things a bit more expensively than we would have done, but they've earned the 51%. They do own the 51%. On time frames, I think we've been through that already, though, which is let's get the JV company done, and then we go from there.
Once they've got the 51%, do they wanna sell? Do they wanna stay? Or before then, are we gonna get a chance to buy the project back?
Okay. Terrific. Let's draw a line in the sand there. It's 7:04 P.M. That's well over an hour of questions and presentation. Thank you so much indeed. Thank you so much to Louis Castro, Chairman of Orosur Mining. Thank you so much to Brad George-
Welcome.
CEO of Orosur Mining. That's it from us after another great investor evening.
Thank you. It was a pleasure.
Thanks again to Brad, thanks again to Louis, and to the support team for doing such a great job. There's always people behind the scenes who get these folk here, so thank you very much indeed to them. Not forgetting the entire London South East team and London Broadcast Studios, who as always do such a terrific job. Thank you, everybody. Thank you one and all. Good night, and have a good evening, everyone.