Orvana Minerals (TSE) has acquired a gold-copper project in eastern Bolivia, which it believes could enter production by 1997.
The company recently reached an agreement to acquire the Don Mario gold-copper project, under a revised deal with Billiton Exploration and the group known as La Rosa.
Orvana will issue the group 6.75 million special warrants, as well as pay Billiton US$10 million. The original proposal called for Orvana to issue 9 million shares, including 2.25 million to Billiton.
Orvana President Neil Hillhouse does not expect there will be any problems raising the purchase price, and says he is looking at several alternatives.
Orvana has $11 million in working capital and 26 million shares outstanding. The company has 30 days to complete a legal due diligence, while the closing must occur within 110 days.
The Don Mario contains two known deposits, including a zone of high-grade gold mineralization hosted in a steeply dipping, garnet-magnetite quartz unit.
This underground deposit measures 100 by 150 metres in width and 700 metres along its rake; thickness varies from 1.5 to 19 metres. Preliminary estimates put the resource at 1 million tonnes grading in the order of 13 grams gold per tonne.
The second deposit, hosted in a calc-silicate rock unit above the high-grade deposit, contains more than 4 million tonnes of potentially open-pit material grading 2% copper and 2 grams gold. The zone is partially to completely oxidized, and further metallurgical studies are required to determine the economics of the deposit.
Orvana will complete definition drilling on the high-grade gold deposit and perform metallurgical studies. The gold mineralization is finely disseminated throughout the zone, and metallurgy is described as relatively simple. High recoveries are expected.
The Don Mario is accessible by logging roads and lies 100 km from major road and rail links.
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