Head grades fall at Orvana’s Don Mario (December 15, 2003)

Junior Orvana Minerals (ORV-T) reports disappointing head grades at the Don Mario gold mine in eastern Bolivia.

In October and November, the mine processed 40,230 tonnes of ore with a head grade of 5.31 grams gold per tonne, off from an expected 6.83 grams gold.

With a below-plan mill recovery rate of 83.7%, the mine produced 5,750 oz. gold in the 2-month period, equivalent to an annualized rate of 34,500 oz.

Orvana poured its first gold in July and continues to make progress in its underground mine development. Daily throughput was boosted by 100 tonnes, to 700 tonnes, and this in turn has reduced cash costs, which averaged $21.35 per tonne in October-November.

Management intends to increase the head grade by reducing ore dilution and minimizing waste rock. Orvana will also create access to additional ore faces, acquire more mining equipment, and build a backfill plant.

At June 30, open-pit and underground reserves totalled 1.5 million tonnes grading 8.74 grams gold per tonne, or 413,329 contained ounces, based on a gold price of US$330 per oz. and a cutoff grade of 3 grams gold.

In October, an uprising in Bolivia resulted in the ousting of the country’s president, an outspoken advocate of mining, though Orvana says the project has not been directly affected by the unrest.

The company describes the mood in Bolivia as one of “general calm.”

Says Orvana President Jaime Urjel: “I am confident we will accomplish our goals for fiscal 2004, which are to record positive net income and cash flow from operations through improvements of head ore grades, additional throughput in the processing plant, and better recoveries and costs, assuming gold prices remain at current levels.”