RE:Interesting musings on this board jandd,
Thanks for posting the comparison against Torex Gold. That stock is trading at 1.5 times book value, while ORV is trading at 0.3 times book value.
Torex Gold is an open pit operation with an underground mine, and in Q2 they mined 10 times more ore than Orovalle--1.8 million tons and then processed 1.06 million tons of their higher grade ore through their 14,000 tpd plant which is 7 times larger than Orovalle's plant in Spain.
So Torex is a larger scale operation which produced 113,419 ounces of gold in Q2. The after tax profit was $10 million USD, so dividing by gold sold, they made an after tax margin of $88 USD per ounce at a realized gold price of $1314 USD per ounce.
In comparison, with Carles mine in production in fiscal Q2 2019, Orvana made a profit of $3,334,000 USD on gold sales of 25,507 ounces, so Orvana's after tax margin was $130.70 USD per ounce at a realized gold price of $1299 USD. At $1500 USD, does Orvana's after tax margin increase to $330.70 USD per ounce?
My best estimate for Orvana's fiscal Q4 revenue at $1500 USD gold is $13,605,557 USD or 10.0 cents per share on gold sales of 30,675 ounces with a predicted margin per ounce of $443.54 USD per ounce. That's because Orvana sells gold dore bars and a copper concentrate with gold and silver by product.
The gold recoveries at Torex are around 88 percent, while at Orovalle, gold recoveries are above 93 percent. The lower gold recoveries at Torex are caused in part by the copper content in their ores which reduces gold recovery by the CIP leach tanks. To solve this problem, Torex added a $7 million USD SART plant to recover copper from their process solution.
Because Orvana is planning to add a SART plant at Don Mario, I found the process description of the Torex SART plant most interesting.
Here's the description of the Torex SART plant.
17.1.5 SART Plant
SART is a chemical process that enables the selective removal and recovery of copper from cyanide leach solutions. This has the main benefit of enabling cyanide to be recycled back into the leach through conversion of weak acid dissociable (WAD) cyanide bound to copper into free cyanide. Figure 17-2 illustrates a schematic of the process. SART is capable of removing ~45% of the Cu per cycle from the CN recovery thickener overflow, and will produces a saleable high grade (>50%) Cu2S precipitate as a secondary benefit.
Copper removal from cyanide leach solution is materialized through the addition of sulphide at acidic pH of about 4.0 to precipitate copper sulphide as a solid. In the process, the cyanide that was complexed to copper, is released to become available as free cyanide. After recirculating the SART effluent, this free cyanide will again react with metals in the ore from the grinding circuit onwards.
Excess solids from the copper thickener underflow will be pumped into the filter feed tank. In this tank, copper slurry is neutralized with sodium hydroxide (50% NaOH) to a pH of about 11.0.
Copper filters are pre-coated with diatomaceous earth to assist with the release of cake from filter cloths. Two horizontal pressure filters filter the copper precipitate, with the configuration being one filter operating and one filter on standby (2 × 100% units). Typically, one filter operates for twenty hours per day, with the remaining four hours per day allotted
for cleaning and maintenance activities. The design production of copper filter cake is about 31.8 tonnes per day (wet basis at 50% moisture content) with a copper content of about 42.6% (dry basis). The copper filter cake also contains some gypsum formed in the acidification step, as well as residual ore solids contained in overflow from the cyanide recovery thickener. The design copper production rate is estimated at 6.7 tonnes per day (as Cu) and “80-percentile” copper production rate at about 3.5 tonnes per day (as Cu) assuming a 91% SART plant availability. The SART plant is bypassed when serviced for maintenance. Design criteria for the SART plant is 15,600 tpd at an expected dissolution of copper in feed of 34% and a copper content of about 1800 ppm in process solution.
Cake wash water discharges into the filtrate tank for recycle back into the SART plant feed. Filter core blow slurry and filter cake air blow discharge through an air separator tank and then into the filtrate tank. Contents of the filtrate tank are pumped to the acidification tank.
The copper filter cake will average a moisture content of about 50% by weight. There are five filtration cycles per day, with each complete cycle being four hours in duration. If needed, both filters could be operated simultaneously to double the filtration capacity.
Cake discharged from the copper filters enters cone-bottom hoppers (one hopper per filter), from which it is conveyed into a single bagging system. In the event of an extended bagging system outage, filter cake bypasses onto the floor for subsequent handling by front-end loader. Copper filter cake is bagged in one-tonne Supersacks. A floor-level rollertype
conveyor at the bagging system allows for temporary storage of several Supersacks of material.
Lime addition to the copper-sulphide thickener overflow neutralizes the solution to pH above 10.5, which is performed in covered tanks. Overflow from the neutralization tanks flows by gravity in a closed pipe into the gypsum thickener. Anionic flocculant will be added into the neutralization tanks overflow (i.e., gypsum thickener feed) to assist with the formation of larger fast-settling solid floccules. The thickened gypsum slurry reports to the leach tanks and acts as an inert medium that is eventually removed into the cyanide recovery thickener underflow.
The overflow of the gypsum thickener at pH 10.5 is collected in an overflow tank and pumped to the process water tank. The overflow tank level will be controlled using variable frequency drive pumps and a feedback control loop.