Scoping study examines Don Mario’s potential

Based on the results of a scoping study, Orvana Minerals (ORV-T) projects that its wholly owned Don Mario gold-copper project in eastern Bolivia could be in production as early as 1998, with an initial output of more than 100,000 oz. gold annually.

Orvana bought the property in early 1996 from the Las Rosa group and Billiton Exploration & Mining. The scoping study, prepared by Pincock, Allen & Holt, is based on technical data assembled by Billiton, including results from more than 60 holes drilled by the company and other operators. This work outlined a high-grade, gold-copper deposit at depth and a near-surface, oxidized polymetallic zone.

While the study was being prepared, Orvana carried out an extensive delineation drill program which expanded and increased the grade of the underground zone and demonstrated the continuity of the high-grade mineralization.

For the purposes of the study, all high-grade intercepts were cut to 50 grams per tonne. Based on the cut grades, the study indicates that an initial underground mine could produce gold at a cash cost of US$110 per oz. for three years. Orvana notes than when results from its drill program are included, the cash cost per ounce drops to less than US$100.

Initial capital costs for a 750-tonne-per-day underground mine are expected to total US$30 million, plus a US$4.5 million contingency.

This would be followed by an additional US$36 million investment for an expansion to 3,250 tonnes per day to process open-pit reserves. This open-pit, gold-silver-copper mine would produce 60,000 oz. gold annually at a cash cost of US$230 per oz. gold-equivalent, with gold contributing 85% of the revenue.

Drilling is continuing at the property and, once results are in hand, an updated resource estimate and revised economic model will be prepared.

Some recent results from drilling at Don Mario include 17.2 metres averaging 16.96 grams gold per tonne, including 7.7 metres averaging 34.6 grams, from a hole in the central high-grade core of the deposit. Another hole at the outer margin of the central core of the deposit intersected 6.4 metres averaging 15.83 grams gold, including 3.2 metres of 28.77 grams.