US-based gold producer Newmont Mining has acquired 19.9% of the issued and outstanding common shares of Canadian exploration and production firm Orosur Mining through a private placement.
Under the placement, Newmont bought 29,213,186 common shares of Orosur at C$0.091 ($0.069) per share for total consideration of $2m.
Orosur also signed an exploration and option agreement with Newmont’s wholly-owned subsidiary Newmont Colombia over the Anzá project in Colombia.
As part of the agreement, Newmont can earn up to a 75% ownership stake in the Anzá project in three phases by incurring an aggregate expenditure of at least $30m over 12 years.
The deal also includes the completion of a feasibility study and paying a total consideration of $4m to Orosur over the first two phases.
Located in Antioquia, the Anzá project comprises exploitation and exploration concessions and concession applications, covering more than a 20km segment of the prospective Tonusco Fault.
Orosur Mining CEO Ignacio Salazar said: “Completing the private placement and entering into the exploration and option agreement accomplishes a number of key strategic elements for Orosur.
“These include strengthening the company’s cash position and providing a well-structured deal to advance the Anzá project.”
Once Newmont completes the third phase of the earn-in, Orosur may elect for Newmont to solely fund all expenditures until commercial production begins at the project.
If the company elects this option, Newmont’s ownership interest in the project will increase to 80%.
Last month, Orosur announced its decision to suspend operations at its San Gregorio West gold mine in Uruguay due to lower grades at the project and a difficult financial position.
The company also divested its interests in Talca and Anillo projects in Chile and disclosed plans to shift its focus to the Anzá project.