Newmont Goldcorp Corp. [NGT-TSX; NEM-NYSE] has formed a joint venture vehicle in Colombia with Agnico Eagle Mines Ltd. [AEM-TSX, NYSE] that will be called Minera Monte Aguila SAS.
The 50:50 joint venture, to be operated by Agnico-Eagle, will assume Newmont’s prior rights and obligations with respect to Orosur Mining Inc.’s [OMI-TSX, AIM] Anza Project. The joint venture will also advance other prospective gold targets of district-scale potential in Colombia.
Orosur shares soared on the news, gaining 100% or $0.085 to 17 cents in heavy trading of almost 4.0 million. The shares had previously traded in a 52-week range of 14 cents and $0.03.
The Anza Project is a gold exploration project, consisting of exploration contracts and applications totalling approximately 200 km2 and located in the mid-Cauca belt in Colombia. The project is 50 km west of Medellin and 60 km south of the giant Buritica deposit which was recently acquired by Chinese firm Zijin Mining Group Co. Ltd. for $1.4 billion via a takeover of Continental Gold Inc.
Mineral reserves at Buritica recently stood at 3.7 million ounces of gold, grading 8.4 g/t and 10.7 million ounces of silver, grading 243 g/t.
“We are excited to partner with Agnico-Eagle to further advance exploration opportunities in this highly prospective region of Colombia,” said Newmont President and CEO Tom Palmer.
Agnico will sole finance the joint venture until expenditures equal Newmont’s previous investment in the Anza Project (approximately $2.9 million). Thereafter, the partners will continue financing on an equal basis.
“Historical work on the [Anza] project indicates the potential for various styles of mineralization, including porphyry, epithermal and VMS,” said Guy Gosselin, Agnico’s senior vice-president, exploration.
In September, 2018, Orosur closed a non-brokered private placement of US$2 million with Newmont Goldcorp and signed a deal that gave the U.S. gold mining giant an option on the Anza project.
The option agreement included a three-phase earn-in structure that allowed Newmont to earn up to a 75% interest in the Anza Project by spending $30 million over 12 years. Newmont must also complete a NI 43-101 compliant feasibility study and make cash payments to Orosur of US$4.0 million over phases one and two.
Under the private placement, Newmont bought 29.2 million shares of Orosur at $0.091 each for US$2.0 million, leaving Newmont with a 19.9% stake in the junior and the right to maintain its interest by participating in future equity offerings.
Orosur said it has learned that Monte Aguila will provide US$700,000 within the next several days to restart the exploration program at Anza.