Orosur Mining (OMI-V, OMI-L) does things a little differently than its Canadian counterparts. For starters, the company’s head office is in Montevideo, Uruguay, where its chief executive officer, David Fowler, also resides.
What is more, Orosur owns the only producing gold mine in Uruguay. Its San Gregorio mine 450 km north of Montevideo boasts three open pits, which produced 55,820 oz. gold during the fiscal year, ending May 31, 2011, at average cash costs of US$750 per oz. The mine churned out a profit of US$6.28 million last quarter, which is one of the best on record since Orosur put the mine into production in 2004.
The company, formerly called Uruguay Mineral Exploration, also owns several exploration-stage projects throughout South America, including two advanced gold prospects in Chile, acquired early last year from an all-share merger with Fortune Valley Resources. It then changed names to Orosur and released a maiden resource report for one of the Chilean projects, Pantanillo, in September. It estimated the project holds measured and indicated resources comprising 47 million tonnes grading 0.69 gram per tonne gold, or 1.04 million oz. gold.
The company announced on June 9 that it plans to acquire a high-grade artisanal gold mine, Talca, in northern Chile, with the intent of fast-tracking production. Orosur has agreed to pay US$3.84 over the next 20 months to Compania Minera Demetrio Tello, owned by the Tellos family, for an initial 25% interest in the mine located 375 km north of Santiago in Region IV. It will then have the option to acquire the remaining 75% interest for another US$3.78 over the next five years.
Orosur says it has already started a 480-km linear ground magnetic survey at the site, as well as surface mapping and geochemical sampling, and plans to start a 7,500-metre, first-pass drill program in the next six months. Despite the Tellos family having produced approximately 300,000 oz. gold from Talca over the last 40 years using mainly artisanal methods, Orosur says the Talca project has not been explored with modern technology and practices, presenting substantial opportunities for growth.
The Tellos family mined a system of seven outcropping high-grade veins at Talca with an estimated average grade of 13 grams gold per tonne. The veins are hosted in Paleozoic rocks such as meta-arenite, phyllite, chert and meta-basalts of Devonian and Carboniferous age, while the principal structural controls on the property are north-northwest trending shear zones and fault structures between 2 and 4 metres wide, tracing 4 to 8 km along strike. Mineralization has been traced to depths of up to 250 metres.
Orosur notes the property is fully licensed from existing operations, and that it may be possible to upgrade the current environmental licence instead of applying for a new one. The company anticipates the permitting process could take less than a year following approval by the relevant authorities, and expects to begin a scoping study for the project during the second quarter of 2012.
To pay for the purchase and for follow-up exploration, Orosur has completed a US$13.5-million private placement at $1.05 a share.
Shares of Orosur dropped a few cents on the news. At presstime on June 29, shares traded at $1.08 on light volume.
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