Repadre also has a right of first refusal on future Don Mario royalties and has been granted 750,000 share purchase warrants. These have a 30-month term and can be exercised at 62 cents per share.
In light of higher gold prices, Orvana plans to update the latest feasibility study on the project. Proven and probable reserves were last estimated at 465,800 oz. gold.
On an annual basis, Orvana expects to mine 667,000 tonnes grading 17.63 grams gold per tonne (equivalent to 377,800 oz.) from the Lower Mineralized zone.
A small portion of the zone can be mined from a pit, where reserves are pegged at 329,700 tonnes grading 8.3 grams gold per tonne (or 88,000 oz.) plus significant silver values.
The stripping ratio at Don Mario is estimated at 6.7-to-1, with cash operating costs pegged at US$100 per oz. Capital costs are expected to total US$40 million.
Using a gold price of US$300 per oz., the feasibility study projects an internal rate of return ranging from 24% to 30%.
Construction permits are already in hand, with startup tentatively scheduled for the first quarter of 2000.
Meanwhile, Leigh Freeman has resigned as president of Orvana; a replacement has yet to be named.
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