Oroco rises on ‘robust’ copper resource at Santo Tomas in Mexico

Shares in Oroco Resource (TSXV: OCO; US-OTC: ORRCF) gained after the explorer said a deposit estimate for the Santo Tomas copper project in northwest Mexico “significantly” expands on 1990s studies.  

The project in Sinaloa state holds 487.3 million indicated tonnes grading 0.36% copper equivalent for 3.86 billion lb. copper equivalent, Oroco said in a news release on Wednesday. It also holds 599.9 million inferred tonnes at 0.36% copper equivalent for contained metal of 4.7 billion lb. copper equivalent.  

That compares with a 1994 reserve estimate by Exall Resources of more than 1 billion tonnes of ore and a subsequent prefeasibility study suggesting a mine could recover 1.25 billion kg (2.75 billion lb.) copper, 20.8 million grams (733,700 oz.) gold and 622 million grams (21.9 million oz.) silver. 

“This mineral resource estimate represents a key milestone,” Oroco CEO Richard Lock said in the release. “We have a substantial resource at Santo Tomas that is exposed at or near surface and has robust potential to support a large, low-cost open-pit mining operation.” 

The project marks another example of re-probing old plans as metals demand for the green energy transition makes them more economically viable to develop. Oroco says the resource estimate paves the way for a prefeasibility study.   

Shares in Oroco Resource rose 9% to 85¢ each in Toronto on Wednesday afternoon, within a 52-week range of 61¢ to $1.53, valuing the company at $181.4 million.  

‘Significantly larger’

“The estimate has returned a current resource that is significantly larger than the historical resource,” Oroco said, noting the “high potential” of the project. “Mineralization has been identified outside the current economic pit shell. Further exploration drilling and associated work programs will be needed to define additional mineral resources.” 

The indicated copper equivalent resource is composed of 3.4 billion lb. copper, 91.9 million lb. molybdenum, 392,800 oz. gold and 32.7 million oz. silver, Oroco said. Similarly, the inferred resource holds 4.21 billion lb. copper, 95.6 million lb. molybdenum, 500,600 oz. gold and 38.5 million oz. silver. 

Santo Tomas, which is divided into the North, South and Brasiles zones, boasts a total of 156 holes reaching 62,678 metres. The drilling includes 90 historical holes by previous owners and others drilled by Oroco from 2021-23, the company said.  

Last month, Oroco corrected a drill result in hole N044 in the North zone. It cut 352.5 metres grading 0.46% copper equivalent, not 0.93% as had been reported five days earlier.  

The North and South zones show similar mineralization but are separated by faults that occurred later. About 10% of the indicated and inferred resource is in a pit shell that extends under the Huites Reservoir, which is a local dam and power producer, but the pit could be configured to avoid the reservoir.  

The site, which was explored from 1968 to 1994, lies on the south bank of the Fuerte River in the Sierra Madre mountains. The project is 175 km northeast of the deep-water port of Topolobampo and within 20 km of sealed roads, a rail line, a natural gas pipeline and high-voltage power.  

Oroco began mapping the property in 2017 before improving roads and adding a camp two years later. The company started a 3-D resistivity and induced polarization survey in 2020 covering 10 sq. km including the South, North and Brasiles zones.  

The copper equivalent estimate was made using a cut-off grade of 0.15% copper. The pit-constrained resource was based on metals prices of $3.80 per lb. copper, $12 per lb. molybdenum, $1,650 per oz. gold, and $22 per oz. silver. 

Oroco said it has no intention of reporting the historical estimate as a current resource estimate because it would require resampling, assaying and twinning historical drill holes and a new program of regularly spaced drilling.