TIDMOMI
Orosur Mining Inc. ("Orosur" or "the Company") (TSX: OMI) (AIM:
OMI) announces the unaudited results for the fiscal first quarter
ended August 31, 2018 ("Q1 19"). All dollar figures are stated in
US$ unless otherwise noted.
Highlights
Operational
-- In August 2018, the Company placed its San Gregorio operations in
Uruguay under care and maintenance.
-- The reorganization process of Orosur's Uruguayan operating subsidiary,
Loryser S.A., has been ongoing since June 2018. Under the
reorganisation proceedings, the term for credit verification
ended on
September 3, 2018, and a court-appointed Controller has
validated all
the credits and has filed a report on the assets and debts of
Loryser
on October 3, 2018. The report is currently subject to review
and
potential reassessment before the creditors' meeting scheduled
for
December 2018. A final date for approval of the report,
including the
final list of creditors and assets, is dependent on whether
there are
any challenges. The Controller is preparing a second report
assessing
the status of Loryser and explaining the causes that led Loryser
to
the current situation.
-- Q1 19 production was 3,029 oz of gold, compared to 8,626 oz in Q1 18.
-- 65,163 tonnes of ore were processed at a grade of 1.28 g/t with
recovery averaging 93.01%. This compares to 268,964 tonnes at
0.96 g/t
and recoveries averaging 93.64%. for Q1 18.
-- The average gold price realized for the Quarter was US$1,261/oz (Q1
18: US$1,260/oz).
-- Average cash operating cost was US$1,040/oz, compared to US$901/oz in
Q1 18 due primarily to lower production and higher processing
and
administrative unit costs.
-- All-In-Sustaining Costs ("AISC") were US$1,342/oz compared to
US$1,348/oz in Q1 18. The decreases in capital expenditure
and
brownfield exploration were offset by lower production.
Financial
-- Restructuring costs of US$3.3 million (Q1 18: US$0.06 million) were
recognized as a provision for layoffs as a result of
substantial
reductions in staff at San Gregorio, leaving the Company with
24
employees at the end of August.
-- Loss before tax was US$6.0 million compared to a loss of US$0.4
million in Q1 18. This was mainly due to diminished operations
and
higher restructuring costs.
-- The Company invested US$0.3 million in capital expenditures and US$0.2
million in exploration compared to US$2.9 million and US$1.6
million
respectively in Q1 18. The Company has significantly decreased
its
investment related to the San Gregorio project compared to Q1 18
by
putting the mine in care and maintenance during Q1 19.
-- The Company's cash balance at August 31, 2018 was US$1.1 million
compared to US$1.4 million at May 31, 2018, with a deficiency in
net
working capital (current assets less current liabilities
including
cash) of US$14.6 million compared to US$10.6 million at May 31,
2018.
The total liabilities under the Loryser reorganization
proceedings
subject to the recent validation by the Controller were
US$12.3
million. This amount relates mainly to commercial creditors
and
financial debt as $6.2 million in labour liabilities and $5.4
million
in environmental liabilities are not part of the proceedings
unless
Loryser is put into liquidation.
-- As of the date of this announcement, the Company has a cash balance of
US$1.5 million, of which US$0.4 million is held by Loryser and
subject
to the reorganisation procedures. All the debt (US$1.9 million)
is
held by Loryser and subject to the reorganisation
procedures.
Significant Transaction After the Quarter
On September 10, 2018, the Company completed a non-brokered
private placement of US$2.0 million with Newmont Mining Corporation
(NYSE: NEM) and an exploration agreement with venture option with
Newmont Colombia S.A.S., a wholly-owned subsidiary of Newmont, for
the Anzá exploration property in Colombia. 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 spending a minimum of US$30 million in qualifying expenditures
over twelve years, completing an NI 43-101 compliant feasibility
study and making cash payments to Orosur equaling a total of US$4.0
million over Phases 1 and 2. Newmont purchased 29,213,186 common
shares at a price of C$0.091 per share for aggregate proceeds of
US$2.0 million which includes the initial advance of US$250,000
previously announced on July 10, 2018. Newmont now holds 19.9% of
the share capital of the Company.
Operational & Financial Summary1 First Quarter
ended August 31
2018 2017 Change
Operating Results
Gold produced Ounces 3,029 8,626 (5,597)
Operating cash cost3 US$/oz 1,040 901 139
Total cash cost US$/oz 1,096 944 152
AISC US$/oz 1,342 1,348 (6)
Average price received US$/oz 1,261 1,260 1
Financial Results
Revenue US$ '000 4,202 11,951 (7,749)
Net income (loss) before tax US$ '000 (6,118) (384) (5,734)
Cash flow from operations2 US$ '000 (3,617) 1,454 (5,071)
Cash & Debt as at August 31 2018 2017 Diff
Cash balance4 US$ '000 1,119 1,390 (271)
Total debt5 US$ '000 1,922 1,941 (19)
Cash net of debt US$ ´000 (803) (551) (252)
1Results are based on IFRS and expressed in US dollars.Certain
measures such as operating cash costs and AISC are non-IRFS
measures and are explained in the Company's MD&A for the three
months ended August 31, 2018.
2Before non-cash working capital movements
3Operating cash cost is total cost discounting royalties and
capital tax on production assets.
4$1,068 of the cash shown is held in Loryser and is under
reorganisation proceedings.
5All of the debt shown is under reorganisation proceedings.
FY19 Outlook
As a consequence of the weaker mineralization encountered at the
San Gregorio UG mine in Uruguay and the consequently difficult
financial situation of the Company, the Board adopted an aggressive
strategic plan which is being implemented, with the main objective
to restructure its businesses, recapitalize and transform the
Company by advancing Colombia with Newmont as partner, finding a
fair solution in Uruguay for all stakeholders and reducing its
activities in Chile.
Orosur is planning the next stages of exploration of the high
grade Anzá project in Colombia in coordination with Newmont.
The Company is hard at work and anticipates reaching a fair and
balanced solution in Uruguay in the interest of all our
stakeholders. As part of the reorganisation procedures, the Court
has scheduled a meeting of creditors for December 2018. In parallel
with ongoing discussions with third parties, the Company has
started working on a payment plan proposal agreement with the
creditors which should be negotiated in advance of the creditors'
meeting.
About Orosur Mining Inc.
Orosur Mining Inc. (TSX: OMI; AIM: OMI) is a fully integrated
gold producer, developer and explorer focused on identifying and
advancing gold projects in South America. The Company operates in
Colombia and Uruguay.
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 ability to find a fair and
balanced reorganisation plan in the interests of all stakeholders.
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, the ability to successfully permit and
develop the Veta A underground project and other risks and
uncertainties which are described in Section 8 of the Management's
Discussion and Analysis for the three months ended August 31, 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.
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 of the Company (responsible for arranging
release of this announcement on behalf of the Company) on: +1 (778)
373-0100.
- Financial Statements Follow -
Orosur Mining Inc.
Condensed Interim Consolidated
Statements
of Financial Position
Thousands of United States Dollars,
except where indicated
As at August 31, As at May 31,
2018 ($) 2018 ($)
Assets
Cash 1,119 1,390
Accounts receivable and other assets 1,141 1,550
Asset held for sale - 120
Inventories 4,537 6,100
Total current assets 6,797 9,160
Accounts receivable and other assets 73 73
Property plant and equipment 4,199 6,578
and development costs
Exploration and evaluation costs 9,596 9,755
Restricted cash 194 201
Total non-current assets 14,062 16,607
Total assets 20,859 25,767
Liabilities and Shareholders' Equity
Trade payables and other 19,513 17,845
accrued liabilities
Current portion of long-term debt 1,711 1,730
Warrants 47 68
Environmental rehabilitation provision 139 139
Total current liabilities 21,410 19,782
Long-term debt 211 211
Environmental rehabilitation provision 5,249 5,283
Total non-current liabilities 5,460 5,494
Total liabilities 26,870 25,276
Capital stock 63,540 63,290
Contributed surplus 5,906 5,893
Deficit (74,355) (67,780)
Currency translation reserve (1,102) (912)
Total shareholders' equity (6,011) 491
Total liabilities and 20,859 25,767
shareholders' equity
Orosur Mining Inc.
Condensed Interim Consolidated Statements of profit/ (loss) and Comprehensive profit/ (loss)
Thousands of United States Dollars, except for loss per share amounts
Three months ended
August 31,
2018 ($) 2017 ($)
Sales 4,202 11,951
Cost of sales (7,119) (11,772)
Gross profit/(loss) (2,917) 179
Corporate and administrative expenses (402) (561)
Exploration expenses (20) -
Explorations expenses and write off (66) (10)
Restructuring costs (3,322) (60)
Obsolescence provision - (35)
Other income 81 115
Net finance cost (42) (87)
Gain/(loss) on fair value of financial instruments, net 21 (10)
Foreign exchange gain 549 85
(3,201) (563)
Loss before income tax (6,118) (384)
Provision for income taxes - (3)
Total loss for continuing operations (6,118) (387)
Other comprehensive loss
Cumulative translation adjustment (190) (278)
Total comprehensive loss from continuing operations (6,308) (665)
(Loss)/profit from discontinued operations (267) 97
Total comprehensive (loss)/profit from discontinued operations (267) 97
Total comprehensive loss for the period (6,575) (568)
Basic and diluted net loss per share
Continuing operations (0.06) (0.01)
Discontinued operations (0.00) (0.00)
Orosur Mining Inc.
Condensed Interim Consolidated
Statements of Cash Flows
Thousands of United States Dollars,
except where indicated
Three months ended August 31,
2018 ($) 2017 ($)
Net inflow/(outflow) of cash related
to the following activities
Cash flow from operating activities
Net loss for the period (6,385) (290)
Adjustments to reconcile net income to net
cash provided from operating activities:
Depreciation 2,635 1,961
Exploration and evaluation 66 10
expenses written off
Obsolescence provision - 35
Fair value of derivatives (30) (12)
Accretion of asset retirement obligation 19 19
Stock based compensation 13 11
Loss (gain) on sale of property, 19 (44)
plant and equipment
Other 46 (236)
Subtotal (3,617) 1,454
Changes in working capital:
Accounts receivable and other assets 316 150
Inventories 1,560 1,769
Trade payables and other 1,724 (585)
accrued liabilities
Net cash generated from (17) 2,788
operating activities
Cash flow from financing activities
Loan payments (19) (72)
Investment in Anillo - 69
Proceeds from the sale of Talca 60 -
Proceeds from private placement 250 2,894
Net cash generated from 291 2,891
financing activities
Cash flow from investing activities
Purchase of property, plant and equipment (260) (2,860)
and development costs
Environmental tasks (52) (40)
Proceeds from the sale of fixed assets - 10
Exploration and evaluation (233) (1,613)
expenditure assets
Net cash used in investing activities (545) (4,503)
Increase (decrease) in cash (271) 1,176
Cash at the beginning of period 1,390 3,357
Cash at the end of period 1,119 4,533
For further information, please contact:Orosur Mining IncIgnacio
Salazar, Chief Executive OfficerRyan Cohen, VP Corporate
Developmentinfo@orosur.caTel: +1 (778) 373-0100orCantor Fitzgerald
Europe - Nomad & Joint BrokerDavid Porter/Keith DowsingTel: +44
(0) 20 7894 7000orNumis Securities Limited - Joint BrokerJohn Prior
/ James Black / Paul GillamTel: +44 (0) 20 7260 1000
View source version on businesswire.com:
https://www.businesswire.com/news/home/20181014005068/en/
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(END) Dow Jones Newswires
October 15, 2018 02:00 ET (06:00 GMT)
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