LATIN AMERICA — Orvana pushes ahead at Don Mario property

Now that feasibility work is under way at its Don Mario gold-copper deposit, Orvana Minerals (ORV-T) has launched an aggressive exploration program aimed at expanding reserves and testing new targets on the surrounding land package.

“Don Mario is a fairly new discovery in an unexplored area that we believe represents a portion of the Brazilian Shield extending into eastern Bolivia,” said Orvana Chairman Neil Hillhouse. He noted that the Lower zone at Don Mario is hosted in a sedimentary unit commonly found in the Brazilian Shield. “We have many miles where we can follow this kind of rock, which is always anomalous in gold and copper.”

While exploration is near and dear to Orvana management — a team largely made up of geologists — this year’s program also includes advancement work on the Don Mario deposit. Toward that end, the company has assigned newly appointed director Dan Rovig (former president of Glamis Gold) the task of overseeing the feasibility study and subsequent development plans.

Orvana had previously hoped to take on a senior partner to develop Don Mario so it could focus on exploring the surrounding region. But after weighing offers from interested parties, the company concluded that the proposals did not “adequately [recognize] the

values” inherent in the project, such as its potential for expansion of reserves or the possibility of developing other prospects in the district.

Work to date at Don Mario has outlined two main bodies: the Upper Mineralized zone, which boasts gold, copper, silver, lead and zinc values; and the Lower Mineralized zone, which features high-grade gold associated with copper and silver.

Recent studies indicate US$40 million would be required to fund development of the higher-grade zone at Don Mario, which could produce more than 100,000 oz. gold annually using conventional mining and metallurgical methods. Cash production costs are estimated at US$100-120 per oz., based on minable reserves of 1.5 million tonnes grading 13 grams gold per tonne.

The Upper Mineralized zone contains an additional resource estimated at 5.5 million tonnes grading about 1.5 grams gold and 1.5% copper. Feasibility work will include metallurgical testing. Preliminary analysis indicates that after underground mining is completed at the Lower Mineralized zone, the Upper Mineralized zone could support an open-pit operation churning out 3,250 tonnes per day for five years, thus extending the mine life to a decade.

Orvana currently has two rigs testing the Don Mario deposit, with a third to be added shortly. This work is aimed at testing the updip portions of the Lower Mineralized zone and adjacent portions of the Upper Mineralized zone.

The overall goal is to complete infill drilling at the Lower zone, as well as drilling to test this unit downplunge, and to further define mineralization in the Upper zone.

Hillhouse says the program will provide information pertinent to the feasibility study, including data to characterize each of the different ore types at Don Mario (such as the oxide, transition and sulphide mineralization that occur in the Upper zone).

The company is well funded, with $17 million in its treasury, including $10 million raised earlier this year to continue work at Don Mario.

On the exploration front, Orvana has six field crews busy mapping, sampling and trenching the Don Mario North, Don Mario South and Las Tojas areas. The company also holds concessions north of Don Mario, where extensive Proterozoic schist belts anomalous in gold have been identified in regional programs.

“We believe there is plenty of opportunity for new discoveries,” Hillhouse says. “Much of this area has never been explored.”

Meanwhile, Orvana is continuing work at the Pederson project, also in Bolivia. Pederson comprises a large, structurally controlled, sediment-hosted, bulk-tonnage gold deposit, and an extensive land package in the Altiplano region of western Bolivia. At last report, the near-surface deposit contained a resource of more than 50 million tonnes at 1.4 grams gold.

“We have a major resource and see considerable potential to increase that,” Hillhouse said of Pederson. “We’re still talking to potential partners, but we’re not going to let this go easy. We don’t see the project as just Pederson, but as part of an emerging gold district.”

Further south, Orvana is engaged in discussions with placer mining outfits interested in test-mining its 50%-held Bahia Nassau property in extreme southern Chile. The company and its local partner believe that an experienced placer miner could carry out sufficient test-mining to determine the viability of a large-scale operation.