Perth explorer Orinoco Gold has announced plans to buy out its joint venture partners at the Cascavel mine for $US6.3 million in cash and shares, while both its managing director and chairman have tendered their resignation.
Founding managing director Mark Papendieck announced today he had resigned from his role, but would work with the company while a successor was found.
“Having spent 10 years working in Brazil the travel and time away from family has been taxing,” Mr Papendieck said.
“With new mine development now under way and ownership of the Cascavel mine now consolidated, it makes sense to hand the reins over to someone that can lead Orinoco into the next phase of the company’s future.”
Orinoco chairman John Hannaford also announced his intention to retire from his duties at the end of next month to concentrate on his other business interests.
His position will be filled by non-executive director Brian Thomas, who has served on the board since 2011.
As part of the shake-up, former AngloGold Ashanti and Vale executive Helcio Guerra and Kairos Minerals director Terry Topping have joined Orinoco’s board as directors.
The changes come as Orinoco announced an agreement to acquire the 30 per cent stake it didn’t already own in Cascavel from its three minority partners.
Orinoco will pay an upfront $US300,000 in cash and $US300,000 in shares, plus two deferred payments of $US4.35 million in cash and shares for a total consideration of $US6.3 million.
“This is a positive step for us, giving Orinoco immediate access to 100 per cent of the free cash flow from Cascavel when it resumes production later this year,” Mr Papendieck said.
“The agreement is structured in a way which minimises the upfront cash payable and allows us to stage the remaining payments over two yeras as production and cash flow ramps up, with the balance of the consideration payable via a production royalty which Orinoco has the option to purchase.”
Orinoco has also waived a $US2.1 million in debts owed to it by its minority joint venture partners as part of the deal.
Orinoco shares were 6.5 per cent higher to 4.9 cents each at 1:20pm.
