Midas LetterOroco Resources Compressed Timeline to Production
By James West
MidasLetter.com
Wednesday, June 24, 2009
We’veseen a lot of junior mining companies come and go, but its seldom thatwe see one as focused as Oroco Resources Corp (TSX.V:OCO) when it comesto moving a prospective deposit quickly along the exploration process.Oroco has gone from Initial Public Offering in March last year to43-101 resource calculation in just under a year and is aiming towardsa production decision and the completion of a pre-feasibility study inunder a year from now.
The National Instrument 43-101 compliant study concludes thatwork to date on the property has outlined an indicated resource of7,450,000 tonnes with an average grade of 1,25 grams per tonne gold,12.8 grams per tonne silver, and 1.02% zinc (297,000 ounces of gold)contained within a larger indicated resource of 25,250,000 tonnes withan average grade of 0.52 grams per tonne gold, 8.6 grams per tonnesilver, 0.34% lead and 1.02% Zn and, in addition, a total inferredresource of 4,690,000 tonnes with an average grade of 0.17 grams pertonne gold, 19.4 grams per tonne silver, 0.37% lead and 1.20% Zn.Within the larger resource is contained 445,000 ounces of gold, 9.9million ounces of silver, 742 million pounds of zinc, and 244 millionpounds of lead.
The company drilled 22 holes on its 100% owned Cerro Prietoproject in northern Sonora State, Mexico, and every single holepenetrated the target mineralized zone.
“We are excited about the success of the phase one explorationprogram and the rapid development of the resource at Cerro Prieto, saidcompany president Ken Thorsen. “Given the geological modeling completedto date, we expect to drill more of the same during phase two.”
In all, Oroco completed 5,975.1 meters of diamond drilling in22 drill holes during Phase One exploration in 2008. Average drill holespacing was approximately 100 meters and 600 meters of strike lengthwere drilled at this spacing. Phase Two drilling will test anadditional 1600 meters of strike where continuity of mineralization hasbeen confirmed by a step out hole and trenching and strongly indicatedby the presence of historical mining.
Oroco starts Phase 2 drilling this month, and has doubled theland position at Cerro Prieto through the acquisition of an additional4,200 hectare block from Yaman Gold Inc. (TSX:YRI)The additional ground covers projected extensions to the north andsouth of the mineralized shear zone on Cerro Prieto, and total 9.2kilometres and include 1.7 kilometres of projected strike lengthbetween Cerro Prieto and the Company’s 100% owned Cerro Prieto Northclaim (“CPN Claim”) and 7.5 kilometres to the south of Cerro Prieto.This brings the entire strike length to a potential18 kilometers.
Its no surprise to industry observers that the project ismoving along so rapidly. The management team under the leadership ofKen Thorsen reads like a who’s who of the mining industry, and not somuch in terms of exploration as in experience putting mines intoproduction.
Thorsen himself has 40 years experience in the mining businessincluding 15 years as a student and field geologist with SelectionTrust, three years with Saskatchewan Mining and Development Corporation(Cameco), 21 years with Teck Corporation (TSX, NYSE:TCK) and six yearsas a consultant. During this period, Thorsen was directly involved atthe field level with the discovery of three ore bodies and at themanagement level with the discovery and development of three additionalore bodies. Prior to becoming a consultant in 2002, Thorsen worked insenior exploration management at Teck, including a two year periodmanaging its world wide exploration as President of Teck ExplorationLtd.
The company’s chairman, Stephen Leahy, doubles as CEO of TSXVenture Exchange-listed North American Tungsten, one of the world'slargest producers of tungsten concentrate, a strategic industrial metalrequired in a wide variety of products ranging from jet turbine enginesand high-speed cutting tools to electronic circuitry and surgicalinstruments.
Mexico is the world's second largest silver producer, and ranks11th in terms of global copper production. The country's biggest goldmine, La Herradura in Sonora state is owned and operated as a jointventure between Newmont Mining (NYSE: NEM) and Mexican miningconglomerate Industrias Penoles.
Sonora State accounted for 24% of all mineral production inMexico in 2006, and the proliferation of exploration and miningcompanies with offices in the state capital of Hermosillo are testimonyto the prolific mineral potential of that part of the country. Oroco’sCerro Prieto lies 135 km north of Hermosillo.
National Grid power lines and a paved road leading to theState’s major highway are each less than five kilometres from theproperty. Ground water is available on site and a river flows yearround four kilometers south of the property. There are numerous nearbyroad and rail links to ports in the state of Sonora. The project isbeing modeled as an open pit, heap leach gold producer, withsignificant silver and zinc credits. Mining costs at comparableoperations in Sonora run well under $5 per tonne and Oroco’s averagegrade of 1.24 grams per tonne gold put it at the high end of the rangewhen compared to other resources being mined or slated to be mined inthe region.
Oroco is currently closing a recently announced privateplacement financing of CA$1.2 million, and so the company is wellcapitalized to execute the phase 2 drill program now underway.
Although currently focused intently on advancing the CerroPrieto deposit, the company also holds a 100% stake in two contiguousmineral concessions in Guerrero, Mexico;Celia Generosa and Celia Gene, totaling 193 hectares and togethercalled the Xochipala Project.
According to a report issued in 1997 by geologist TawnAlbinson, “The Xochipala claims cover ground in the Guerrero Gold Beltsufficient to potentially generate reserves greater than 1 millionounces gold in ore bodies similar to the productive high-grade orebodies that have been discovered in the past within the region.”
The Xochipala Project is located in the southeast extreme ofthe original Morelos National Mining Reserve, a 49,400 ha federalmineral reserve which includes the most promising and expanding goldreserves in Mexico. This region encompasses a northwest trend ofintrusions with associated gold bearing iron skarn deposits and is partof a wider area which has come to be known as the Guerrero Gold Belt(the “GGB”).
The GGB is currently the focus of aggressive exploration,delineation, development, and mining by Canadian and Mexican majors.Teck Cominco, Goldcorp and Grupo Mexico are exploring and delineatinggold reserves in the GGB and to date have discovered in excess of 12million ounces of gold.
Oroco currently has just over 27 million shares outstanding. Follow the company’s progress at www.orocoresourcecorp.com.
SOURCE:
https://www.midasletter.com/news/09062406_Oroco-resources-compressed-timeline-to-production.php
