On 4 February 2019, Orinoco Gold Limited (ASX: OGX) announced a significant update on its Gold Stream Agreement with financier Cartesian Royalty Holdings (CRH), which entails 1,000 ounces of gold sales (or equivalent paid) every quarter. The company noted that CRH has agreed to defer the Company’s Q4 2018 quarterly payment of 1000 ounces of gold for a year to 18 February 2020 (initially due on 18 February 2019). Additional one-year payments deferrals of the 2019 1st quarter (initially due on 18 May 2019), and 2019 2nd quarter (initially due on 18 August 2019) are also available to Orinoco Gold.
CRH shall reportedly defer the Q4 2018 delivery, in exchange for a 0.5% net smelter royalty with regards to all the tenements in which the Company and its subsidiaries or affiliates have a stake.
In addition, on Orinoco’s request, CRH may further defer the Q1 2019 delivery to 18 May 2020 in exchange for an additional 0.75% net smelter royalty with regards to all the tenements in which the Company and its subsidiaries or affiliates have a stake. The granting of the Q1 2019 minimum delivery deferral is subject to the Orinoco completing an A$5 million capital raising by 1 May 2019 and executing final documents for its US$9.5 million exploration Joint Venture with AngloGold Ashanti. The Company is undergoing constructive discussions with several strategic financiers regarding the A$5m capital raising.
In addition, on Orinoco’s request, CRH may further defer the Q2 2019 delivery to 18 August 2020 in exchange for an additional 1.0% net smelter royalty with regards to all the tenements in which the Company and its subsidiaries or affiliates have a stake.
As stated by Orinoco’s Executive Director, Matthew O’Kane: The company is excited for this agreement with CRH with the necessary near-term flexibility to execute on several corporate and operational initiatives which may add substantial value to the company. All the stakeholders thereby enjoy enhanced confidence with CRH’s significant support at this stage. The company is strategically focussing on finalizing the review of operations at Cascavel and evolving the collaboration with AngloGold. The company is looking forward to achieving significant corporate goals soon with the near establishment of the in-country exploration JV vehicle.
On 31 January 2019, Orinoco Gold had released its December quarter business and financial results. The company reported completion of a 96-ounce gold sale at the Cascavel Gold Mine for December 2018. The almost-completed Mestre Level 7 development is set to provide access to high-grade plant feed for processing during the first quarter of fiscal 2019. The company reported that improved recoveries are attainable through the placement of 25TPH hammer mills in the existing gravity separation process, based on the independent metallurgical review. Besides, Rio do Ouro Drilling campaign is reportedly completed.
The company reported A$0.932 million cash used in operating activities, A$1K cash inflow from investing activities and A$0.312 million used in financing activities for the December quarter. The cash and cash equivalents stood at A$111K at the end of the quarter. The company has anticipated A$1.273 million total cash outflows for the next quarter.
Stock performance: OGX closed the day’s session at A$0.006 on 4 February, up by 50% as compared to the previous close of A$0.004. The stock has provided a negative YTD return of 42.86% till date to its investors.
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