Orvana’s El Valle-Boinas/Carles mine plan

Vancouver – Orvana Minerals (ORV-T) has released a reserve statement and cash-flow model for its El Valle-Boinas/Carles gold project in northern Spain that outlines a 7-year mine producing over 100,000 oz. gold 3,900 tonnes of copper per year.

The study set combined proven and probable reserves for the project at 4.66 million tonnes grading 5.23 grams gold, 0.74% copper and 10.9 grams silver.

The mine plan outlined working the skarn and epithermal veins by cut-and fill and long-hole stoping methods, while the mill would churn through 1,900 tonnes per day. Capital costs were estimated at US$59.6 million with a payback period of just over two years.

Based on US$800 per oz. gold, US12.50 per oz. silver and US$2 per lb. copper, the internal rate of return was set at 48% and the net present value, using a 5% discount, at US$91.1 million. Pre-tax cash costs are estimated to be US$461 per oz. Metallurgy tests show gold recovery of 94%, copper of 78% and silver of 70%.

Orvana only acquired the project last September through the purchase of Kinbauri Gold. Rio Narcea Gold Mines mined the property between 1997 and 2006 mainly through open pit, before switching to underground mining in 2004. Rio Narcea produced 840,000 oz. gold and nearly 14,000 tonnes of copper during its tenure.

The property still has extensive mining infrastructure including a plant and mill as well as an historic open pit mine that will be used as a tailings impoundment.

The project falls on the 45-km-long and 4-km-wide Narcea gold belt in northern Spain. Mineralization is hosted in a series of sedimentary rocks and is characterized by mesothermal magnesium- and calcic-rich skarn deposits as well as younger epithermal vein mineralization.

Orvana plans to start on a 20,000-metre underground drill program to extent the mine life. The mine is currently in pre-production with a planned start-up of early 2011.

The company also owns the Copperwood copper-silver project in Michigan and the Don Mario gold-silver-copper mine in Bolivia.

Orvana’s share price jumped 17¢ or 13.8% on the day of the news to match its 52-week closing high of $1.40. The company’s stock price has risen somewhat steadily from 67¢ a year ago and it has 116 million shares outstanding.