News -- exploring possible transactions/alternatives...Very interesting...must be other mining groups in the region very interested in Oracle's high grade copper...could be huge cash flow / revenue with very little capital expenditures.
"In the past few months, Oracle Mining has been conducting a review of various project alternatives. The project is distinctively located in the sixth-largest copper-producing region in the world, and the proximity to producing copper mines could potentially provide synergistic opportunities to work with third parties to utilize their existing infrastructure."
Mr. Jason Mercier reports
ORACLE MINING FILES FIRST QUARTER FINANCIAL RESULTS AND PROVIDES FINANCE AND STRATEGY UPDATE
Oracle Mining Corp. has released its financial results for the period ended March 31, 2014. This news release should be read in conjunction with the unaudited condensed consolidated interim financial statements and notes thereto for the three months ended March 31, 2014, and 2013, and the related management's discussion and analysis, both available on SEDAR.
First quarter 2014 financial summary:
- Net loss for the quarter was $2.2-million compared with a net loss of $3.8-million for the three months ended March 31, 2013, primarily due to a decrease of $1.4-million in exploration and evaluation expenditures and a decrease of $600,000 in general and administrative costs, offset by an increase of $500,000 in interest expense.
- Net working capital as at March 31, 2014, was a deficiency of $6.9-million compared with a deficiency of $5.0-million on Dec. 31, 2013.
- Cash and cash equivalents at March 31, 2014, totalled $300,000 compared with $300,000 on Dec. 31, 2013.
During the quarter ended March 31, 2014, advances were made in three aspects of the corporation's principal property: the Oracle Ridge copper project, located northeast of Tucson, Ariz., United States of America, including: (a) the announcement on Feb. 26, 2014, of an updated mineral resource estimate in accordance with National Instrument 43-101 (standards of disclosure for mineral projects) and filing on March 31, 2014, of a supporting NI 43-101 technical report under the corporation's profile on SEDAR; (b) the continuation of geological, mining and engineering studies; and (c) permitting and regulatory programs. A discussion of the progress made on these activities is available in the MD&A.
All financial information for the quarter ended March 31, 2014, is prepared in accordance with international financial reporting standards and reported in U.S. dollars unless otherwise noted, including this news release. Please refer to Note 2 of the audited consolidated financial statements for the years ended Dec. 31, 2013, and 2012, for more information.
Corporate update
The board of directors of Oracle Mining and management have reviewed the corporation's spending priorities at the Oracle Ridge project. During the past several years, Oracle Mining has focused primarily on project permitting, engineering studies in metallurgy and geotechnical engineering, and drilling and resource modelling with the objective of completing a positive feasibility study in support of constructing a complete processing facility and tailings storage area. In the past few months, Oracle Mining has been conducting a review of various project alternatives. The project is distinctively located in the sixth-largest copper-producing region in the world, and the proximity to producing copper mines could potentially provide synergistic opportunities to work with third parties to utilize their existing infrastructure.
Accordingly, Oracle Mining has temporarily suspended the 2014 drill program and rationalized expenditures to manage remaining financial resources while evaluating third party options and continuing to advance permitting. For additional clarity, evaluation of third party options does not preclude Oracle Mining from pursuing the completion of a feasibility study. In conjunction with the change in strategy for the corporation, Oracle Mining has amended its loan agreement with Rich Stone Mining Investment (Hong Kong) Ltd. to provide additional funds to the corporation in the short term.
There is no assurance that a third party option will be pursued or, if pursued, be successful. To the extent possible, the company intends to incorporate previously completed engineering studies in metallurgy and geotechnical engineering into a future feasibility study. There is no assurance that a feasibility study will be completed or, if completed, that the outcome will be positive. The company has not made a production decision with respect to Oracle Ridge. A decision to proceed with production will be based upon the corporation completing a future feasibility study demonstrating economic and technical viability.
Rich Stone and Oracle Mining amend loan agreement
In addition, Oracle Mining provides investors with an update regarding an amendment to its $10-million (Canadian) secured convertible loan with Rich Stone Mining Investment. Effective today, Rich Stone and the corporation agreed to an amendment of the loan facility whereby the interest in the aggregate amount of $1.2-million (Canadian) and the origination fee payable of $600,000 (Canadian) (including origination fees paid to date by the corporation to Rich Stone under the loan facility in the amount of $390,000 (Canadian)) are to be advanced to the corporation as soon as practicable and repaid to Rich Stone on the maturity of the loan facility. As at May 13, 2014, the aggregate funds to be received from Rich Stone include $1.19-million (Canadian) for the remaining second tranche of the loan facility and $1.80-million (Canadian) for fees and interest to be repaid at the loan facility's maturity.
Oracle Ridge drill results
Oracle Mining is pleased to announce the initial assay results from its 2014 drill program at the Oracle Ridge project. The four core holes reported in this news release were all drilled underground from drill station 3 with the purpose of extending high-grade copper mineralization beyond the drilling that defines the current mineral resource estimate. Until further drilling is completed and a geologic model constructed, all intervals reported in this news release are apparent thicknesses. All units are imperial unless otherwise noted. Highlights include:
- OUH-58 intersected two copper-bearing skarn beds of the Martin formation in Zone 8 (B8 48 and B8 51) and copper-bearing endoskarn. OUH-58 discovered B8 48 as a newly recognized copper-bearing skarn bed within the Martin formation.
- OUH-59 intersected an apparent thickness of 19.5 feet grading 2.17 per cent copper equivalent of the Abrigo formation (B8 51) 100 feet along strike north of the intersection in OUH-58. The hole also intersected lower-grade copper-bearing endoskarn north of the OUH-58 intersection.
- OUH-60 was drilled to extend Zone 8 mineralization south of OUH-58. The hole intersected an apparent thickness of 23.5 feet of 2.35 per cent CuEq enhanced by notably higher silver content of 1.01 ounces silver per short ton. The hole also intersected an apparent thickness of 21.5 feet grading 1.13 per cent CuEq, which may confirm the continuity of copper mineralization in new skarn bed B8 48.
- OUH-61 was a vertical hole, which tested the trend of copper mineralized skarn below the drilling, which defines the mineral resource estimate. OUH-61 intersected two skarn beds in Zone 8 (B8 48 and B8 51) and another in Zone 12. Notable intersection of B8 51 was an apparent thickness of 19.4 feet of 2.03 per cent CuEq, which contained an apparent thickness of 5.5 feet of 4.81 per cent CuEq. The potential for copper mineralization continues to the east of these intersections.
Each of these holes confirmed Oracle Mining's geologic interpretation and has extended copper-bearing skarn mineralization beyond the limit of current drilling and the company's current mineral resource estimate. Intervals in the attached table labelled "includes" are higher-grade portions of the previously listed interval. The attached table provides the assay results obtained from the underground drilling program to date.
UNDERGROUND DRILLING RESULTS Au Ag Drill From To Interval Cu (oz/ (oz/ CuEq hole (feet) (feet) (feet) (%) ton) ton) (%) OUH-58 139.5 150.0 10.5 1.00 0.003 0.26 1.13 OUH-58 184.0 217.5 33.5 1.28 0.003 0.23 1.41 OUH-58 223.0 235.2 12.2 0.51 0.002 0.19 1.07 OUH-59 220.0 239.5 19.5 2.07 0.003 0.20 2.17 OUH-59 249.50 258.50 9.00 0.67 0.002 0.34 0.80 OUH-60 144.5 166.0 21.5 0.97 0.005 0.27 1.13 includes 154.5 159.5 5.0 2.12 0.011 0.65 2.51 OUH-60 195.5 219.0 23.5 1.89 0.009 1.01 2.35 OUH-60 234.5 239.5 5.0 0.58 0.002 0.10 0.65 OUH-61 102.0 108.6 6.6 1.21 0.007 0.36 1.44 OUH-61 189.5 202.6 13.1 1.24 0.003 0.24 1.36 OUH-61 210.1 229.5 19.4 1.92 0.001 0.33 2.03 includes 224.0 229.5 5.5 4.55 0.001 0.84 4.81
There are no known drilling, recovery or other factors that could materially affect the accuracy or reliability of the data. Oracle Mining has posted an updated diagram of all drill hole locations of these reported assay results at its website.
Data verification
The drill program and sampling protocol were managed by qualified persons employed by Oracle Mining. The corporation maintains a rigorous quality assurance/quality control protocol on all aspects of sampling and analytical procedure. Drill core is checked, logged, marked for sampling and split in half. The sample length varies depending on the geology and the mineralization. In general, the samples are predominantly about five feet long. Drill core recovery was excellent and exceeded 90 per cent. One-half of each drill core is maintained for future reference, and one-half of each drill core is sent for analysis. Half-core samples are shipped to Skyline Assayer and Laboratories in Tucson, Ariz., an ISO/IEC 17025 accredited laboratory. Skyline is contracted to complete all sample preparation and assaying and is independent of Oracle Mining. Samples are analyzed employing acid digestion and atomic absorption for analyses of copper, as well as fire assaying for silver and gold. For QA/QC purposes, Oracle Mining inserts standard reference materials and blank samples into each sample batch submitted for assay to monitor laboratory performance. The corporation periodically submits the pulps of the samples assayed by its primary lab to ALS Chemex Labs Ltd. in Reno, Nev., for check analysis.
Kevin Francis, RM, SME, vice-president technical services, of Oracle Mining, a non-independent qualified person within the meaning of NI 43-101, has reviewed and approved the scientific and technical information included in this news release.