Field Activity Update - Week of May 23, 2022 Drilling continues at both the North Zone and Brasiles.
Rig #1 continued drilling N019 located along the west slope in the northern part of the North Zone. The hole is approaching 800m in length and will likely conclude in the coming days.
A core sample of N019 showing native copper at a depth of 746 meters.
Rig #2 began drilling N020 on May 20 and has drilled some 80 meters.
Rig #3, located in Brasiles, concluded B006 at a depth of around 700 meters. Currently a downhole IP survey is being conducted. Earlier this week the crews put in the road to the next drill location and cleared an area for the required drill pad. B007 represents a significant step-out to the north-east from recent holes. The pad is located around 400 meters NE from B003.
At the property, a group of new junior geologists is being trained by SRK (a leading international mining consultancy firm) and established site staff to conduct the oriented core procedure. Oroco employs oriented core to enhance its understanding of the geology at Santo Tomas.
Simultaneously, the SRK team is reviewing geotechnical procedures and mentoring new geo-technicians who joined the team this past weekend. This ramp-up in staffing is a necessary step in preparation for additional drill rig capacity.
Oroco geologists and geo-technicians working with employees of SRK in the field to refine processes and procedures.
On Monday Oroco’s CEO, Richard Lock, participated in an RFC Ambrian webinar about the Copper Pathway to 2030. RFC Ambrian’s report is available for download here. During the webinar Richard provided insights into the status of Oroco’s drill program and shared a project timeline reaching into 2023, including the company’s first 43-101 technical report (PEA) for Santo Tomas.
The highlights of his presentation and select slides from the RFC Ambrian analysis can be found below.
Overview
Four key aspects for greenfield copper projects.
- Jurisdiction.
- It is absolutely critical that the mining jurisdiction is welcoming to mining, understands mining, and is happy for mines to develop in their country.
- RFC Ambrian shows Mexico at #4 in terms of greenfield capacity expansions for the period of 2020-2030.
Chart showing copper project expansion from 2020-2030 by country.
- Grade and tons
- A billion tons of +0.35 cu eq is the sort of thing that Oroco is looking for and the company is very confident that North Zone and South Zone will deliver this with additional potential in Brasiles.
- Infrastructure.
- Projects need access to power, water, shipping and local workforce. ST is located around 100 miles from the deepwater port of Topolobampo. Close to major road, rail and natural gas and power lines.
- Community support.
- Oroco continues to operate in a manner that it maintains support of the community that it is working within. Substantial community engagement and support. Working within the regulations and minimal footprint. Part of the community and schools.
Geological work
Focus lies on increasing grade and tonnage, with clear opportunity to increase the resource along strike and locally to depth being
Oroco has done extensive work on understanding the geology and the company is focused on resistivity and alteration which indicates mineralization. And the team has been following this feature into the South Zone and Brasiles. And definition of these is ongoing and encouraged by the results.
In the North Zone drilling has confirmed mineralization associated with monzonite dykes and alterations characterized by low resistivity picked up in the geophysics. The low resistivity indications continue to the south, extending targeting potential extensively.
Topographic map section showing resistivity profile as measured by the 3DIP survey and North Zone drill holes.
Mineralized historical holes in the South Zone align well with low resistivity indications. Excitement about what the team is seeing there.
Topographic map section showing resistivity profile as measured by the 3DIP survey and select South Zone drill holes.
Oroco is confident the same methodology is going to bear fruit in Brasiles. A lot of excitement on site at the moment.
Oroco is sitting right where it needs to be in terms of grade and throughput. What the company needs is a bigger bubble (tonnage) and it is working very hard to combine North Zone, South Zone and Brasiles Zone into one deposit. And Oroco will grow the tonnage as a key to present this as a tier one project.
Chart showing size and grade of select copper projects.
Technical Work
Recent focus on technical work program. Increasing the speed of delivering this project. Scaling up to 4th, 5th and possibly 6th rig.
Drilling in North Zone and Brasiles Zone will continue until around the end of this year and Oroco is just about to start drilling in the South Zone.
Although metallurgical drilling and test work was completed in the 1990s Oroco will repeat that to more modern standards and will be conducted in Q3. Metallurgical drilling is about to start.
Next step is to put the PEA together. Oroco just signed a contract with Ausenco out of Tucson, AZ to undertake a PEA for Oroco.
Chart showing technical work timeline until Q2 2023.
Ausenco will begin work on process design, mine design, tailings studies, infrastructure design which will be rolled into a 43-101 technical report toward the end of this year scheduled for publication in Q1 2023 and then possibly update that resource in Q2 after South Zone drilling is completed.
The path forward for value is to keep drilling, increase the pace of drilling, get the technical work underway to produce the 43-101 and that will result in Santo Tomas being re-ranked as a compelling current resource.