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Please be advised that both the Company's annual audited financial statements and Management's Discussion and Analysis for the fiscal period ended
The Company is no longer subject to a Cease
As you are aware, Otso came under new management in
Our strategy has been two-fold. We have managed the existing issues by working closely with creditors and lenders while simultaneously pouring effort into redeveloping the mine. We are performing the technical work and collecting the structural geological data required to maintain grade and achieve mill nameplate capacity of 2 million tonnes per annum. Twelve individual reports published since 2005 by leading mineral consultants worldwide have supported both the resources and economics.
Given the high gold price environment, it may be tempting to rush to restart without completing the necessary geology or preparatory works as has been the case in the past. However, our objective is to create a centre of value, generating enduring profits for shareholders at long-run average gold prices. We are confident this strategy will unlock the intrinsic value of the mine and the extensive exploratory potential of the asset.
Senior management has over 150 years combined experience in building, owning and operating mines globally. Our experience has instilled the importance of identifying and offsetting the key risks of mining projects before production begins to ensure sustainable long term cashflow. Otso is fully licensed, permitted and ready for production with
The Company cautions that it has not defined or delineated any proven or probable reserves for its Otso Property and mineralization estimates may therefore require adjustment or downward revision based upon further exploration or development work or actual production experience. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The Company also cautions that the decision by the Company to proceed to develop the
Since
1.Renegotiated the CA$71 million-dollar mark-to-market gold loan down to two non-interest-bearing payments of
US$11.5 million owed to Pandion Mine Finance.The payments are in lieu of the gold loan or any deliverables. Management also negotiated an additionalUS$7 million investment by Pandion to repay creditors and maintain the asset that does not require payment or the issuance of equity. Additionally, Pandion investedUS$1.5 million in further working capital for the Company. The funds allowed the Company to close out significant creditors, support ongoing care and maintenance and on going preparatory works to allow for an expectedApril 2021 restart. The renegotiation of Pandion's debt allowed the Company to become a credible investment opportunity.2.Secured a CA$8 million facility from
Alumina Partners priced by mutual agreement and allocated in tranches.The focus of the Alumina facility is to minimise dilution while the Company finalises the larger funding whilst allowing the Company to support care and maintenance and the preparatory works.3.Launched a 10,000-metre infill drill program to confirm the structural geology and support the mine plan.The critical flaw of the 2017 restart was the lack of data regarding the structural geology, grade control and a detailed mine plan. Otso has reduced the wide-spaced drilling from 50 metres to 25 metres deploying NQ diamond and orientated core drilling to allow the lodes to be modelled in 3D. To date, some 1,900 metres has been completed with the remaining 8,100 metresscheduled for completion later this year. The infill drill program and consequent detailed mine plan are fundamental building blocks to achieve nameplate production and head grade.
Our team has been actively collaborating with former geologists and major mineral consultants who have worked on the mine over the past 15 years including,
The project now has, for the first time, a technical team with the expertise, knowledge and focus to properly mine the
4.Restructured the Company ensuring capital raised was most effectively allocated. While on care and maintenance, Otso reduced staff and energy costs, stabilised the mine, installed critical environmental monitoring systems, serviced the infrastructure and dealt with the hazardous chemicals left onsite.
5.Over the year, senior management has built a strong working relationship with the
Centre for Economic Development , Transport and Environment (ELY) to plan and gain permission to lift the tailings dam, extend the waste storage and upgrade the water storage dam. Aligning with our Company values, Otso has appointed a new safety manager to oversee the highest health and safety standards. Further, we have appointed a highly skilled environmental manager as the onsite mine manager to reflect our priorities during care and maintenance which are safety, compliance and environmental management.6.Strengthened corporate governance with the addition of another independent Board Member,
Christopher Towsey .Mr. Towsey has over 40 years' experience as a mining and exploration geologist and company executive. The Board also replaced our former CFO withMark Gelmon (CPA, CA) who is well-equipped to install advanced systems for accounting and payroll. Mark is based inVancouver and has provided expertise to several TSX listed mining companies in the capacity of Director, CFO and consultant.7.Completed a comprehensive audit of all company accounts from 2015.During the
January 2017 restart, an advanced accounting system was introduced. The program was poorly installed, and staff received limited training resulting in ongoing information and operational issues. Compounded by the tumultuous restart and mounting creditors, new management requestedPricewaterhouseCoopers ("PwC"), the company's auditor, to review, test and resolve all matters regarding the accounts. The aim of the audit was to embedaccounting and operational standards expected of a global, listed mining company. PwC Canada visited site in late 2019 to start the process. Thereafter, the global pandemic restricted access and moved all correspondence online between the auditors, management and the auditing committee, spread across three continents. In spite of the difficulties, the audit is now complete and Otso has built a strong, transparent foundation to move forward.8.Rebranded and refreshed the Company in the market.Otso has developed a strategy to achieve the intrinsic value of the asset grounded in progressing on site and working towards a sustainable long term gold producer. The Companny draws over 80% of electricity from renewable sources, applies cutting-edge automatic environmental monitoring programs and operates within the some of the most progressive labour standards worldwide. The mine also operates with the highest quality equipment on market (Metso and Outotec). Positioning ourselves as a premium, emerging green gold producer futureproofs our project to align with transforming markets and community attitudes.
Moving forward, our key priorities are to:
1.Execute another 4,100 metres of the drill program to release an updated resource statement and a new NI 43-101 feasibility to market by year's end. The new feasibility and detailed mine plan will use the 6,000 metres of new drilling to support the restart in Spring (
April 2021 ). Infill drilling is scheduled to continue to update the resources for the future as the mineralisation is open to the south, on dip and strike of the existing pits with further three designated mining areas.
Our pathway to production is comprised of two updated resource statements and a new feasibility allowing shareholders the opportunity to participate in targeted short-term and long-term value creation. In the run up to production the Company plans to release drilling results as they become available - thereby gaining momentum towards nameplate production.
2.Raise funds in tranches. The first tranche will complete the preparatory works, infill drilling and the feasibility. The second tranche will upgrade the infrastructure, recommission the mine and for working capital for production. Despite the travel restrictions, the Company has garnered significant interest from several parties across
Europe ,Canada andAustralia , having received term sheets and hosted site visits. The Company is aiming to secure the first tranche of funding as soon as possible.
In summary, management has mobilised our experience in building, owning and operating mines globally to produce a strong knowledge base and ensure the operations, accounts and procedures are fundamentally robust to support a successful restart. Our data-driven approach protects investors from unnecessary risk and we expect will deliver stable, ongoing returns. We are committed to forging a new path for the asset that remains profitable regardless of fluctuating markets.
Thank you for your interest and we invite you to continue to support us to production in
Kind regards
"Brian Wesson"
President and CEO
Disclosures
The technical disclosure in this news release has been reviewed and approved by EUR ING Andrew Carter BSc, CEng, MIMMM, MSAIMM, SME and a Qualified Person as defined by National Instrument 43-101.
For further information, please contact:
Vice President
info@otsogold.com
www.otsogold.com
About the Company
and is progressing towards a restart at 2 million tonnes per annum throughput.
Neither the
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Copyright (c) 2020 TheNewswire - All rights reserved., source