Oroperu stock dropped today with release of news item given below.
This is nothing new as Oroperu always drop when a press release is
issued. On the whole, I think the release is quite positive as it
looks like we will soon have a producing mine although Livingstone
didn't say what the production costs will be. I am also heartened by
the "let's take this one step at a time approach" whereby the mine
will initially operate at only 200 TPD with a review after more work
is carried out.
I am slightly puzzled by the folllowing statement:
In addition 2,500,000 of these shares will also be subject to release
based on US$2 cash flow per share, all as previously announced.
Does this mean that the shares will only be released after Oroperu has
generated $2 in net cash flow ($68 Million)?
My only guess as to why the stock sold off is that some people aren't
too thrilled with the share dilution, but heck, that was old news.
Anyone care to comment?
Regards,
Mike
Attention Business Editors:
OROPERU RESOURCES INC. ANNOUNCES INDEPENDENT REPORTS CITE INCREASED TONNAGE, GRADE AND RECOVERY ON NUEVA CONDOR ACQUISITION
VANCOUVER, July 7 /CNW/ - Oroperu Resources Inc. (CDN:OROP) (the
``Company'' or ``Oroperu'') is pleased to report on the current status
of its pending Nueva Condor acquisition in central Peru.
The 46,800 ha. Nueva Condor property with its 450 TPD mine and
mill facility has been valued in excess of US$20 million by Kilborn
Peru S.A.
The Company has received an engineering review of the reserves and
resources of the Nueva Condor property by a Toronto-based engineering
firm, Roscoe Postle Associates Inc. (``RPA'') and the results of a
metallurgical study conducted by Dawson Metallurgical Laboratories
Inc. and Millsaps Mineral Services Inc., both of Salt Lake City, Utah.
According to these reports, the reserves as stated by the previous
operator were underestimated for both tonnage and grade. The recent
metallurgical testwork indicates that gold recovery will be enhanced
by making a gravity concentrate.
The Nueva Condor property is located some 85 km east of Lima, Peru
at elevations ranging from 3,100 to 4,500 m. Some 2.5 million tonnes
of ore were processed in the past from four mining areas on the
property, with an average grade of 1.6 gm/tm Au, 5.4 oz/ton Ag, 3.8%
Pb and 5.0% Zn.
A start-up production rate of 200 TPD (70,000 tonnes per year) is
planned, which will be re-evaluated as the mine is further explored
and re-sampled. Based on the RPA evaluation of the Huampar Mineable
Reserve, this production rate would be sustainable for about 10 years,
not including the adjacent reserves in the San Juan, Suecia and
Sorpressa structures. An additional reserve of 275,000 tonnes is
developed at the nearby (6 km away) Condor Pasa mine on the property,
which grades 0.73 gm/tm Au, 5.07 oz/ton Ag, 2.31% Pb, 0.36% Cu and
2.32% Zn.
A large part of the Nueva Condor property hosts a belt of altered
Tertiary volcanics which will be the focus of exploration for bulk
tonnage epithermal gold deposits by the Company.
The Nueva Condor acquisition will close following completion of
due diligence and regulatory approval. To complete the acquisition
Oroperu will issue up to 5,500,000 common shares to the vendors of the
project, subject to restrictive time releases over 27 months. In
addition 2,500,000 of these shares will also be subject to release
based on US$2 cash flow per share, all as previously announced.
As part of its due diligence process, Oroperu has re-assayed 403
pulp samples and has an on-going re-sampling program. The results of
the pulp assays checked at a commercial lab in Vancouver, Canada were
compared with the original Huampar (the previous name of the mine
operation) assay lab results. The results indicated that the
commercial lab results were slightly higher than the mine lab for low
and intermediate values for Ag, Pb and Zn, and much higher for Ag
greater than 25 oz/ton and Zn greater than 12%. Reserves were
evaluated using Huampar mine assay values and are thus believed to be
conservative. Gold assaying in the Huampar mine reserve is incomplete
and where no data was available a zero value was assumed. Oroperu's
assaying and re-sampling indicate that gold would be a contributor to
the net value of the ore. Some of the stope sampling by Oroperu is
tabulated below (channel samples at 2 m. intervals in each stope).
<<
Structure Level Stope Width Au Ag Pb Cu Zn
m gm/tm oz/ton % % %
-----------------------------------------------------------------------
Suecia 440 741 1.03 12.60 3.35 2.20 0.13 2.19
Suecia 421 665 1.09 6.29 4.00 4.25 0.67 6.45
Suecia 450 740 0.79 8.37 3.84 0.69 0.17 0.82
Suecia 440 725 1.50 3.68 2.94 1.37 0.27 1.74
San Juan Split 416 622 0.84 0.14 5.82 4.86 0.18 14.20
Finlandia 416 661 1.04 0.87 1.83 2.47 0.40 2.32
RPA has completed an audit of one of the six mineralized
structures with reserves known as Finlandia and the following is
quoted from their report:
``Measured and Indicated Resources of the remaining portions of the
Finlandia Vein estimated by RPA include about 650,000 tonnes at an
average grade of 0.84 g/t Au and, 2.99 oz/ton Ag, 2.16% Pb, 0.22% Cu
and 2.96% Zn.''...``This compares with Mineable Reserves of 426,500
tonnes at an average grade 0.60 g/t Au, 2.60 oz/ton Ag, 1.92% Pb and
2.5% Zn reported by Huampar''...``These results indicate more than a
50% difference in tonnage and 12% to 40% difference in metal
contents.''...``It is RPA's opinion that the combined effects of the
methodology and the arbitrary cutting of assays had led Huampar
to underestimate both the tonnage and average grade of the Finlandia
Vein and probably other deposits in the Nueva Condor property.''
The Dawson/Millsap study has indicated that ``approximately 20% of
the gold from Finlandia ore and 50% of the gold from Suecia
ore''...``may be recovered by gravity concentration prior to
flotation'' and has recommended the addition of jigs to the
concentration circuit. This step will increase gold recovery from the
prior operation where precious metals were only recovered in flotation
and some free gold was lost to tailings. This work was a consequence
of the previous operator's recognition of free gold in the existing
tailings and of confirmation by Oroperu.
Oroperu has applied for an operating permit which is currently
under review by the Mining Bureau of Peru. The assay lab at the mine
facility is presently being updated and re-equipped. The mine
workings are now in preparation for production and some ore is
stock-piled. Plant refurbishment is almost complete.
Oroperu is also currently diamond drilling on its Tres Cruces
property in north central Peru and concluding check-assaying on the
most recently completed reverse-circulation drilling program there.
The Company held its annual general meeting of shareholders on
June 24, 1997, at which meeting the shareholders approved the issuance
of shares and warrants issuable from the sale of 1,650,000 Class ``B''
special warrants, which were sold as part of a 5,000,000 special
warrants private placement financing at Cdn.$1.75 per special warrant
that closed on March 31, 1997. On June 26, 1997 the Cdn.$2,887,500
proceeds from the Class ``B'' special warrants were released from
trust to the Company, with accrued interest.
Oroperu currently has 23,301,463 common shares outstanding. On a
pro forma basis, when the 5,000,000 shares from the special warrants
are exercised the Company will have 28,301,463 common shares
outstanding, and if all 2,500,000 warrants to be issued on exercise of
the special warrants are exercised the Company will have 30,801,463
common shares outstanding. On conclusion of the Nueva Condor
acquisition the pro forma issued capital of the Company will increase
to 36,301,463 common shares.
SIGNED ON BEHALF OF THE BOARD OF DIRECTORS
K. Wayne Livingstone
President |
