Loryser S.A. ("Loryser”), the operating subsidiary of Orosur Mining Inc.
("Orosur” or "the Company”) (TSX/AIM: OMI), a South American-focused
gold producer, developer and explorer announces that it has applied to
commence reorganisation proceedings (the "Loryser Reorganisation
Proceedings”) under Uruguayan legislation (Act N°18.387).
The San Gregorio mine and processing complex has been in operation since
1997 and has produced approximately 1.5Moz of gold during this time.
Since late 2017, Orosur has been hindered by operational challenges in
its San Gregorio Underground Mine ("SG UG”) in Uruguay. The scarcity of
alternative sources of ore has made it difficult to reverse this
situation which is resulting in financial liquidity constraints. To
continue the mineplan, a swift and timely transition from SG UG to the
Veta A underground project would be needed, which itself would require
external financing and the environmental permit in Veta A which are
currently not yet available.
As a result of the current circumstances, the Board of Directors has
been actively exploring a number of alternatives for Orosur and its
subsidiaries. The decision to apply for the Loryser Reorganisation
Proceedings and creditor protection was made in consultation with the
Company’s legal and financial advisors and is in the best interests of
Loryser, the Company and their stakeholders. This request for
commencement of the Loryser Reorganisation Proceedings was applied for
by Loryser on June 14th, 2018, from the Reorganisation Court
in Montevideo (the "Court”). The Court is expected to take several days
to assess whether the necessary requirements are met to declare the
start of the Loryser Reorganisation Proceedings.
Orosur and its subsidiaries (excluding Loryser) are not included in the
Loryser Reorganisation Proceedings and the Company’s management team
will continue to lead day-to-day operations.
Loryser expects to continue production at SG UG until the end of July
after which it intends to place the mine in care and maintenance.
Loryser will remain able to enter into transactions with its suite of
Uruguayan assets. Through the course of its operations in Uruguay, the
Company has been fortunate to have enjoyed a very positive relationship
with the Government and even received two royalty exemptions in recent
years. Orosur is currently conducting conversations with the Government
to analyse different options to continue its operations in Uruguay,
which represent a very important source of investment and employment in
the north of the country.
The Company plans to continue to advance its Colombian gold exploration
program and believes that the Loryser Reorganisation is the best option
by which to return Orosur to a stable situation while focusing its
efforts on unlocking the value of its exciting Colombian gold
exploration asset. As of June 14th, 2018, excluding Loryser
assets and liabilities, the Company had total cash and cash equivalents
of US$174,000 and zero financial debts.
Ignacio Salazar, CEO of Orosur, said:
"The decision to commence the Loryser Reorganisation Proceedings is a
strategic one that we believe will best protect our business and
preserve cash while we endeavour to achieve the best possible outcome
for our Company, employees, suppliers, other business partners and
stakeholders. By commencing the Loryser Reorganisation Proceedings, the
Company preserves its ability to enter into any number of potential
transactions which may be beneficial to our stakeholders.
We intend to treat all our stakeholders with the utmost respect and
care through the Loryser Reorganisation Proceedings process with every
intention of arriving at a fair and balanced plan in a swift time period
while allowing the Company to continue advancing its Anzá project in
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 the only producing
gold mine in Uruguay (San Gregorio) and has assembled an exploration
portfolio of high quality assets in Uruguay, Chile and Colombia.
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.
Forward Looking Statements
All statements, other than statements of historical fact, contained or
incorporated by reference in this news release, including any
information as to the future financial or operating performance of the
Company, constitute "forward-looking statements" within the meaning of
certain securities laws, including the "safe harbour" provisions of the
Securities Act (Ontario) and 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. There can be no
assurance that such statements will prove to be accurate. Such
statements are subject to significant risks and uncertainties, and
actual results and future events could differ materially from those
anticipated in such statements. Forward-looking statements include,
without limitation the expectation to continue to operate the business
as usual while meeting commitments to employees, suppliers and
customers; continuing exploration on the Colombian gold exploration;
availability of alternative options; and a declaration by the Court. 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.
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