Drilling by
The junior encountered ore-grade mineralization in two of five recent stepout holes north of the main deposit. Holes DM-171 and DM-175, collared 75 metres north of the previous ore limit, tested
for extensions of the lower mineralized zone (LMZ). The first hole intercepted a true width of 1.5 metres grading 15.3 grams gold per tonne; the second also hit 1.5 metres, grading 18.7 grams.
The three remaining holes also intercepted ore-grade values, though mineralization was thinner. These holes were collared farther to the northwest and represent mineralization commonly found at the Don Mario Norte prospect.
In early January, Orvana completed a 350-metre decline into the LMZ. The company then drifted along the deposit for another 150 metres. From underground, it found that the higher gold values occur in more continuous, visually recognizable zones, which should allow the company to control dilution when mining and lower costs.
Orvana plans to mine 960,000 tonnes grading 13 grams gold per tonne from underground, plus another 474,000 tonnes at 7 grams from the open pit — for a total of 514,000 oz.
The company, assisted by consulting firm Minproc, is in the midst of a bankable feasibility study for Don Mario. H.A. Simons was retained to handle the engineering design, which will determine the mining methods and production schedule for the operation.
Meanwhile, metallurgical testing is being carried out to determine if material mined from a mini-pit is amenable to heap-leaching. If results are positive, a heap-leach operation in the initial years of production could reduce capital costs and accelerate the payback period.
The feasibility study is expected to be completed by May. The capital cost of building a convential milling operation is projected to be US$40 million. Startup is envisaged for the second quarter of 2000.
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