Oroco Resource Corp. – South Zone drilling impresses at Santo Tomas
We have written extensively about the dearth of quality, scalable copper development projects which may be appealing as M&A targets. As readers know we have highlighted Oroco Resource Corp.’s (TSX-V: OCO) Santo Tomas project in Mexico as one of the few independently-owned copper development assets globally that looks like it will fit that bill, with a potentially very large endowment of copper and a number of highly attractive characteristics from a development point of view.
RFC Ambrian assisted Oroco with their recently completed C$4.7m capital raise (C$0.75 issue price). Yesterday saw the release of the latest round of drilling results, this time from drilling completed at the South Zone, which continues to point to significant extensions to the historic resource of 2.6mt contained copper. Highlights of the three new holes announced included 221.7m of 0.45% CuEq, 145m of 0.32% CuEq and 89m of 0.34% CuEq.
Santo Tomas has some inherent location advantages adding to its geological appeal, with it being proximal to road and rail links to the deep-water Pacific port of Topolobampo, high-voltage grid power and a high-pressure gas pipeline. In addition, the low elevation (<1000m) and outcropping nature of the deposit will both likely further accrue CAPEX and OPEX benefits.
Industry whispers suggest that Mexico is rapidly rising up the preferred mining jurisdiction list, likely helped by the recent passing of the $369bn Inflation Reduction Act in the USA, of which USMCA member Mexico may be a key beneficiary.
Oroco completed the Phase 1 43,000m drilling campaign earlier this year and an updated Mineral Resource Estimate and PEA are due for completion in the coming months. The Phase 1 drilling and 2021's 200km 3D IP survey represented the first sustained technical program completed at Santo Tomas since the early 1990’s. The upcoming Resource Estimate and PEA will be the first since 1994, when a study outlined potential copper production of 125ktpa in a clean 28% copper concentrate.
The completion of the Phase 1 drilling campaign has proven that mineralisation extends over at least 5km strike length, with good grade being returned in all holes the company has assayed so far. Alongside the geophysical survey, all results to date have been strongly corroborative of the historic results and underpin the expectations of a significant resource expansion. The mineralisation remains open in all directions.
It’s shaping up nicely, and we retain our long-held view that Santo Tomas has all the hallmarks of a long-life copper production asset in the making and hence is an attractive M&A target. Oroco is currently capped at ~US$150m.
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