Orosur Mining (LON:OMI, TSX-V:OMI) is getting ready to begin developing the Arenal Deeps gold-silver project in February.
Arenal Deeps is an underground mining project located near Orosur’s only producing asset, the San Gregorio mine in northern Uruguay.
This morning the junior gold producer revealed a positive set of results for the second quarter of the 2011 fiscal year.
In the three months ended 30 November 2010 it made total sales of US$16.6 million (Q2-2010: US$14.8 million), and reported net income of US$ 2.7 million (Q2-2010: US
.7 million).
Costs were reduced significantly from US$871 per ounce - in the corresponding period of 2010 - to US$790 per ounce. Meanwhile prices continued to improve, with Orosur achieving an average gold price of US$1,332 per ounce (Q2-2010: US$1,065).
It spent US$1.9 million (Q2-2010: US$ 1.7 million) on exploration during the quarter and it ended the period with US$13.9 million in the bank.
“We have completed another solid quarter with 12,576 ounces of gold produced. This was in accordance with expectations of between 12,000 and 13,000 ounces”, chief executive David Fowler said.
He adds: “Good progress was made on finalizing plans for the development of Arenal Deeps.
“A development contract for Arenal Deeps was awarded to Redpath, an experienced underground contractor, and we anticipate commencing development in February 2011 with a progressive ramp up in ore production from mid calendar 2011.
“We look forward to the successful implementation of the Arenal Deeps project as we believe that it will provide significant opportunity to develop other underground ore sources and further extend mine life.”
Fowler also highlights that Orosur made good progress with its exploration work, thanks to the discovery of significant gold mineralization at the Vaca Muerta project – which is around 85 kilometres from the San Gregorio mine.
“Follow-up drilling has confirmed and extended this mineralization, and additional targets along strike and around Vaca Muerta are expected to be tested in the second half of the 2011 fiscal year,“ Fowler added.