(Image via Orvana Minerals Corp.)
Three assets in different stages all to deliver value: Investors should take a deeper look at this multi-mine gold-copper-silver company ….
The NI 43-101 assets under
Orvana Minerals Corp. (TSX: ORV, Forum) consist of the producing El Valle gold-copper-silver operation in northern Spain, the Don Mario gold-copper-silver property in Bolivia, currently in care and maintenance, and the Taguas gold- silver property in Argentina. All long-life projects under a proven operations performer backed by solid management, leading to strong growth potential for this stock.
The company advantage:
Investors ought to take note of Orvana for its strategic strengths - three assets combined with three capabilities.
What this company offers, is tangible, clear, technically supported assets, but it also has three other significant value propositions:
exploration in Argentina,
development in Bolivia at all angles, and
operational capabilities in Spain.
The strategy was set in 2020, and the team is developing its assets toward production. Right now, Orvana has one producing asset and intends to have two operating in production assets likely by 2024 and three, by 2026 or 2027.
In an interview with Stockhouse Editorial, Orvana CEO Juan Gavidia praised his team for working day and night to bring this business to profitable fruition.
“All the funding financial background of this strategy is understood.”
The assets:
El Valle gold-copper-silver operation, northern Spain:
Orvana acquired this project through its acquisition of
Kinbauri Gold Corp. in September 2009. Situated in the Rio Narcea Gold Belt in Northern Spain, near the port city of Avilés, the El Valle Operation (Orovalle) is in an area with deep history dating back roughly 2,000 years when Romans had initially mined the ground. During the 1970s, more modern gold exploration commenced at the El Valle area and over the next 20 years, companies like
Anglo American and
Goldfields evaluated the gold potential with drilling and underground exploration drifts.
The El Valle Operation is in the Rio Narcea Gold Belt of northern Spain and was previously mined from 1997 to 2006 by
Rio Narcea Gold Mines. They produced nearly one million ounces of gold and more than 20,000 tonnes of copper prior to the closure of the mine.
In 2006, the mine closed, and in 2007, Rio Narcea sold the El Valle Operation to Kinbauri Gold. Orvana acquired Kinbauri Gold two years later, restarting production in 2011.
Narcea Gold Belt is a zone at 45 kilometres long and 4 kilometres wide in Northern Spain, characterized by the alignment of mineral occurrences, Paleozoic sediments, Terciary Basins, fracture zones and igneous intrusions. This Gold Belt trending northeast in the southern portion while north portion the belt is truncated resulting in a north-northwest trend. Gold deposits lie within the 15 kilometres long central part of the belt and the Carlés and El Valle Boinás deposits were mined by modern methods during the first part of this century.
(Boinás mine exploration image via Orvana Minerals Corp. Click to enlarge.)
In the news:
At El Valle, the company announced earlier that in Q1 FY2022 its drilling program continued with its focus on upgrading Inferred resources, with a total of 6,530 metres of infill drilling. Further 492 metres of brownfield drilling were completed to define the continuity of the recently discovered E2 structure to the North.
Orvana's unit in Spain reported Q1 FY2022 production results and drilling updates highlighting production of 15,921 gold equivalent ounces – a 32% sequential increase.
- 7,022 metres of infill and brownfield drilling in El Valle
- 1,415 metres of greenfield drilling in the Asturias province, northern Spain
- 20.66 g/t Au over 2.9 metres intercepted in Ortosa-Godán, Asturias
In
a media release on this news, CEO Juan Gavidia stated that the team is encouraged by these recent intercepts in the west zone of Ortosa-Godán, which confirm the presence of a mineralized structure in an area previously undrilled.
“The company has made a strong commitment to organic growth in Orovalle through brownfield and greenfield exploration, and results such as the ones released today continue to demonstrate that this investment is paying off with the potential to further grow our mineral resources.”
Don Mario gold-copper-silver property, Eastern Bolivia:
Orvana controls 53,325 contiguous hectares across 10 concessions with mineralized structures over two belts in the Don Mario district.
The focus of the exploration efforts has been along the Crystal Schist Belt, where the Don Mario Lower Mineralized Zone (LMZ) is located, and the Eastern Schist Belt, home to the Las Tojas deposit.
Upon a thorough review of 30 years’ worth of historic exploration data, the company is out to define new exploration targets applying latest technologies. Orvana is building a comprehensive exploration program on new targets:
- On the ground mapping
- Local Geochemistry and Geophysics
- Airborne Geophysics
- Structural Analytics
- Artificial Intelligence Analytics
- Drilling Targets Definition
Work conducted over the years has seen the company methodically explore both belts by following up stream-sediment anomalies with soil-sample grids, trenching, and / or IP geophysics.
Orvana has complemented the stream-sediment sampling within the two schist belts and is currently developing a new comprehensive exploration program, launched in the fourth quarter of fiscal 2021. Areas of interest will be subject to non-drilling exploration fieldwork during fiscal 2022.
A past producer since 2003, development at the project is ongoing. Among its Oxides Stockpile and Tailings Reprocessing Projects (OSP & TRP), its main infrastructure includes a 2,000 tonnes per day (tpd) Processing Plant with CIL & Flotation, it also boasts a tailings storage facility, a power plant, and is connected to the national gas grid.
Subject to the favorable completion of technical, economic and funding analysis, this year into next, Orvana will advance its OSP development project, targeting OSP production by 2024 – 2026. By this point, the TRP development will begin, followed by TRP production in 2027 – 2031. The OSP is expected to provide three full production years for Don Mario. The stockpile resource has been estimated on the assumption that the stockpile will be processing using a sulphidization circuit:
- Stockpile mineral resource (Measured): 2.18 million tonnes Au 1.84 g/t – Cu 1.89% – Ag 49.3 g/t
- Metal contained: Au 129k oz, Cu 41k t
Full details are included technical report entitled “National Instrument 43-101 Technical Report for the Don Mario Property, Eastern Bolivia”, dated March 15, 2022. A copy of the report is posted under the Company’s profile on www.sedar.com.
The quality assurance (metallurgical) testing was completed in November 2021. Subject to a positive outcome of technical, financial and funding analysis in progress, construction is planned for fiscal 2023.
Scoping studies for a subsequent project regarding reprocessing tailings (TRP) are underway in fiscal 2022. The Mineral Resource Statement for the tailings, with an effective date of September 30, 2021, is:
- Tailings mineral resource: Indicated: 3.68 Mt at Au 0.48 g/t; Cu 0.53%; Ag 4.79 g/t; Inferred: 5.47 Mt at Au 0.45 g/t; Cu 0.40%; Ag 4.00 g/t
A comprehensive exploration program started in fiscal 2021 that is planned to continue throughout fiscal 2022, with non-drilling field and cabinet work. Infill drilling at its TRP has been completed in Q2 2022, at 82 holes, roughly 1,000 metres. A pre-feasibility study is planned for the first half of the company’s fiscal 2023.
The company believes that OSP and TRP could potentially add six or seven years to the mine life to Don Mario, allowing for exploration opportunities in the 53-000 hectare Land Package and other exploration opportunities in the region.
Taguas property, Argentina:
Known as “the Land of the Sun”, the high Andes of San Juan Province is home to a highly prolific belt for world-class deposits. Consisting of 15 individual claims and concessions, this 3,273.87-hectare area is being developed within a high-sulphidation epithermal gold / silver system.
Positioned near travel infrastructure servicing the Veladero Mine under
Barrick Gold Corp. just 25 km away, nearly 56,600 metres of drilling has carried out on the property, with which it has been possible to define the 2,595k oz Au equivalent contained in 3 areas, Cerros Taguas, Cerro Campamento and Cerro Silla Sur.
(Taguas Project Profile image via Orvana Minerals Corp. Click to enlarge.)
In
December 2021, Orvana completed a new NI 43-101 report, which refers to the oxidized gold-silver mineralization occurring near surface in Cerro Taguas.
At the time, CEO Juan Gavidia stated that the past year proved to be a fantastic value creation year for the team’s shareholders, with a year-on-year 205% increase in resources tonnage, growing from 52 metric tons to 159 metric tons.
“Our persistent exploration investment is paying off spectacularly this year, allowing us to keep pursuing development of our three assets with a much larger mineral resource base.”
An infill and expansion drilling program is in progress at Taguas, with near to 4,000 meters drilled by March 2022, and additional 3,400 meters planned for the following weeks. In
a recent media release, Orvana CEO, Juan Gavidia, commented that the Company is excited with the latest results:
“Based on the reported intercepts, we are very optimistic that the Taguas Project could improve its initial economics, as we enter the Pre-Feasibility stage. In addition, efforts are being made to understand the high-grade oxides in Cerro Campamento, which could potentially be a cash flow catalyst for the first years of the operation. Our team on the ground is working 24/7 to complete drilling targets before snow season settles in.”
Meet the team:
(Image via Orvana Minerals Corp. Click to enlarge.)
Fiscal highlights:
Looking at Orvana’ consolidated financial and operational results for its Q1 fiscal year 2022, the company highlighted EBITDA of $5.1 million and free cash flow of $0.8 million, with capital expenditures of $4.3 million and a
€15 million syndicated loan with two Spain-based banks closed in December 2021.
CEO Gavidia explained in
a media release on this news as evidence of continued solid quarters of increasing gold equivalent production and EBITDA from the company, which, coupled with recent syndicated financing, resulted in a strong Q1 balance sheet.
“Looking ahead, we expect to continue delivering steady production, and continue developing Orvana's three units according to our now well-established organic growth strategy.”
(Refer to Orvana’s financial statements and MD&A for complete financial and operational information. Image via Orvana Minerals Corp. Click to enlarge.)
Investment summary:
ORV stock is up more than 50% since the year began and almost 100% higher since this time, last year.
(Orvana Minerals Corp. stock chart – March 2021 to Apr 2022. Click to enlarge.)
Upon the closing of the company’s financing, CEO Gavidia noted that the company is placed in a very strong position to materially advance the Taguas Project in Argentina and reinforce the growth strategy in Spain.
“We continue building on our relationship with long term financial partners, allowing us to access to financing at a very attractive interest rate.”
The gold market is having a good start to the year, experiencing a bull run that has more upside potential. The precious metal’s value has already risen back above the $1,900 (USD) mark, many analysts believe its price could rise to $2,500 area this year.
With the right exploration and production company, discovering the true potential of the country's widespread mineralized landscape could present tremendous economic potential, yield, and expansive growth.
As its projects go live over the next couple of year, investors should keep an eye on this stock as the team continues to release results from its ongoing drill program at its projects.
Additional information is available at Orvana’ website,
orvana.com.
FULL DISCLOSURE: This is a paid article produced by Stockhouse Publishing.