OGX 0.00% 0.3¢ orinoco gold limited

A reminder why we are here

  1. 2,172 Posts.
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    From july 2015
    What makes the Cascavel project so exciting despite the lack of a JORC Mineral Resource report?

    In the Faina Goldfields Project, Cascavel will be our maiden mine, again scheduled for first quarter, 2016. It’s an elongated mineralized belt in which Orinoco has recently made important discoveries including Cascavel (15 m @ 88g/t Au from underground sampling) and Tinteiro (17.5 m @ 1,293g/t silver,”Ag”). These discoveries illustrate very significant potential in Orinoco’s tenements. This would be above and beyond the imminent production from Cascavel.
    Cascavel’s development path requires further cap-ex of a US$ 7 million. Orinoco is poised to demonstrate just how profitable the Greenstone Belt can be. The past producing Sertão Gold Mine, now owned by Orinoco, had a shallow oxide zone mined by Troy Resources in 2003. At the time it was the lowest cost gold mine in the world with cash costs of US$ 53 an ounce!
    At Cascavel, the mineralized structure hosting the gold has been intercepted in widely spaced drilling over 1.5 km of strike and over 700 m down dip. The system remains open along strike and down dip, and additional gold lodes parallel to (above and below) the main zone have been discovered. These parallel gold lodes are not part of our initial mine plan. This is a large system!
    The structurally controlled and geologically continuous nature of the gold vein system, combined with the drilling and underground sampling completed at Cascavel, would ordinarily allow for a JORC Mineral Resource. While drilling provides an effective measure of the geological continuity of the Cascavel veins, the coarse nature of the gold prevents a reliable grade estimation amenable for JORC purposes. Given the difficulty and expense of defining JORC compliant resources through drilling, the Company is of the view that establishing a low-cost gold operation, and rapidly growing it, is the best way to create shareholder value and mitigate risk.
    So, why is Cascavel so exciting? It’s a large gold system with 90% gravity recoveries, Bonanza grades, very low remaining capital costs, expected to have low operating costs, reaching production in the first quarter of next year. [Please see more detail on the Cascavel project].
    Brazil is not the first place that comes to mind when thinking about gold producers. What’s it been like working there and what could still go wrong?
    Although not many people have heard of it, Goias State, where our Faina Goldfields Project is located, is actually the second largest gold producing State in Brazil. Large companies such asAnglo Gold, Kinross and Yamana have successfully operated there for years. It’s a great State to operate in, without the logistical issues and environmental sensitivities that come with more remote parts of Brazil. We benefit from a mining friendly government, evidenced by the fact that we went from discovery to mine development in under three years. A skilled labor force and supportive set of local communities doesn’t hurt either.
    What could go wrong? Well, we carry advanced-stage development mining risks, but it doesn’t look as if any surprise, ‘Brazil’ risks will come to pass. [Famous last words?] When one looks at the projects that have succeeded and failed in Brazil – they’ve done so mostly on the merits of the projects and management teams – not sovereign Brazil factors. Additionally, the local
    currency
    has devalued very significantly against the U.S. and Australian currencies, helping to lower our costs. Many don’t recognize that locally priced gold close to all time highs.
    Are there other jurisdictions with high-grades that you might consider expanding into?
    At this point we think our property, with a 100 km radius, has sufficient scope for discoveries that could make Orinoco a meaningful mid-tier producer over time. We have a Heads of Agreement in place with the State Government and a highly prospective land package. We hope to leverage our strategic advantages and the infrastructure associated with our first gold mine, Cascavel.
 
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