Oroco Resource Corporation. (“
Oroco” or the
“
Company”) (TSXV: OCO; OTCQB: ORRCF, BF: OR6) is pleased to
announce a revised Preliminary Economic Assessment (“
PEA”)
and updated Mineral Resource Estimate (“
MRE”) for the North
Zone and South Zone of its Santo Tomas Porphyry Copper Project
(“
Santo Tomas” or the “
Project”) in Sinaloa State,
Mexico. The PEA is based on a staged open pit mine and processing
plant achieving 60,000 tonnes per day (“
t/d”) production in
year 1 and expanding to 120,000 t/d in year 8 over a 22.6-year Life
of Mine (“
LOM”). Production is preceded by two years of
construction and one concurrent year of pre-stripping. The PEA has
been prepared by Ausenco Engineering USA South Inc.
(“
Ausenco”). The updated MRE and geologic model were
prepared by SRK Consulting (U.S.), Inc. of Denver, Colorado and SRK
Consulting (Canada) Inc., Vancouver, BC (jointly “
SRK”). SRK
(Canada) was responsible for geotechnical modeling. The mine
planning and mine costs components of the PEA were prepared by SRK
(U.S.).
Highlights of the revised PEA include:
- NPV
(8%) of US$2.64 billion pre-tax and US$1.48 billion post-tax.
- IRR
of 30.3% pre-tax and 22.2% post-tax.
- Total
LOM payable copper production of 4,774 M lb.
-
Pre-tax payback of 2.9 years; post-tax payback of 3.8 years from
first concentrate production.
-
Initial capital costs estimated at US$1,103.5 million; sustaining
and expansion capital costs estimated at US$1,734.1 million.
-
Annual LOM C1 Cash Cost of US$1.54/lb Cu on by-product basis.
-
Average CuEq grade of 0.51% over the first 7 years of
production.
-
Capital efficiency ratio (NPV / Initial Capital Cost) of 1.34.
-
Total mineralized material mined of 825.5 Mt.
Commenting on the updated PEA, CEO Richard
Lock:
“When we completed the initial PEA in December
2023 it was clear there was additional value to be unlocked at
Santo Tomas. Upon careful analysis, a staged approach to the mine
expansion and a focus on exploiting the higher-grade near surface
material in the early years of mining has unlocked a considerable
increase in value. We have established a plan that invokes a very
efficient use of capital and establishes a rapid post-tax payback
of 3.8 years. The plan starts with the use of smaller equipment to
provide rapid entry to the mineralized material and maintains a
higher-grade feed profile to delay the requirement of an expansion
until year 8. Copper Equivalent production in the first 7 years is
forecast at 1.34 billion pounds at a Mill Feed average grade of
0.51% Cu Eq.
Quite significantly, this work establishes Santo
Tomas as one of the most capital efficient large-scale, low-cost
copper projects in the world as illustrated in Figure 1 below.
Figure 1: Santo Tomas Displays Strong Economics
Compared to its Peers
Source/Notes:FactSet. Technical reports (1)
Copper equivalent production calculated using stated metal prices
from each project’s latest technical report (After-Tax NPV 8% /
Total Capex (US$M). Bubble size based on annual production). The
above chart is for illustration purposes only and presents an
abstract and simplified view of the NPV based on published data.
The other projects presented may not take into account individual
risk profiles of each deposit depicted and may not be
contemporaneous with the current NPV of the Santo Tomas update. See
important metal price and study date information for projects
depicted above on Oroco’s website.
PEA Overview
The Santo Tomas property comprises 9,034 ha of
mineral concessions encompassing significant porphyry copper
mineralization in northern Sinaloa and southwest Chihuahua, Mexico.
The Project is located in the Santo Tomas Porphyry District, which
extends from Santo Tomas northward to the Jinchuan Group’s
Bahuerachi Project located approximately 14 km to the
north-northeast. The PEA was conducted using data (including 27,382
Cu assays) from 68 diamond drill holes (43,063 m) drilled by the
Company and 90 legacy reverse circulation and diamond drill holes
(21,075 m, for a total of 64,138 m in 158 drill holes) in the
Project’s North Zone and South Zone. The data from the seven
exploration diamond drill holes in Brasiles Zone and the single
geotechnical hole (GT001) drilled by the Company were excluded from
consideration in the MRE and PEA. Oroco’s entire updated drill hole
database (including PEA excluded holes) contains 166 new and legacy
drill holes totaling 69,556 m with lithological logging data and
29,992 Cu assays.
The commodity price assumptions for the
Discounted Cash Flow (“DCF”) analysis are presented in Table
1. Key results from the DCF analysis prepared by Ausenco are
presented in Tables 2 & 3.
Table 1:
DCF Price Assumptions
Commodity |
Unit |
Price* |
Cu |
US $ / lb |
4.00 |
Mo |
US $ / lb |
15.00 |
Au |
US $ / t.oz |
1,900 |
Ag |
US $ / t.oz |
24.00 |
*Cash flow model assumptions only.
Cautionary Note to Investors
The reader is cautioned that the PEA is
preliminary in nature, and that it includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves, and there is no certainty
that the preliminary economic assessment will be realized.
Table 2:
Mining and Production – Key Results
Key
Assumptions |
Unit |
LOM |
Exchange
Rate |
MXN /
US$ |
19.76 |
Fuel
Price |
MXN /
L |
20.41
(US$1.03) |
Production Profile |
Unit |
LOM |
Total Open
Pit Tonnage |
Mt |
1,964.9 |
Total Open
Pit Mineralized Material Mined |
Mt |
825.5 |
Open Pit
Strip Ratio |
Waste
: mill feed |
1.38 |
Daily
Throughput (Year 1 // Year 8 on) |
kt/d |
60 //
120 |
LOM
(concentrate production) |
Years |
22.6 |
Copper in
Mill Feed |
M lb |
5,916 |
Molybdenum
in Mill Feed |
M lb |
138.7 |
Gold in Mill
Feed |
koz |
753.4 |
Silver in
Mill Feed |
koz |
55,200 |
LOM mill
feed (Indicated // Inferred) |
Mt |
388 //
460 |
Average Cu
payable / year – LOM |
M lb |
207.5 |
Average Cu
payable / year – First 5 Years (1) |
M lb |
167.5 |
Payable (2)
Copper LOM (in concentrate) |
M lb |
4,774 |
Payable
Molybdenum LOM (in concentrate) |
M lb |
80.8 |
Payable
Silver LOM (min 30 g/t payable in Cu Concentrate) |
koz |
26,673 |
Payable Gold
LOM (min 1 g/t payable in Cu Concentrate) |
koz |
300.2 |
Operating
Costs (US$/lb.) |
Unit |
LOM |
C1 Cash
Costs Copper (By-Product Basis) (3) |
US$/lb |
1.54 |
C3 Cash
Costs Copper (By-Product Basis) (4) |
US$/lb |
2.00 |
Capital
Expenditures (5) |
Unit |
LOM |
Initial
Capital (6) |
US$M |
1,103.5 |
Sustaining
and Expansion Capital (6, 7) |
US$M |
1,734.1 |
Closure
Costs (5 years, year 22 - 27) |
US$M |
209.2 |
Estimated
Salvage Value |
US$M |
0 |
Notes: (1) First 5 Years at full
production, starting year 2. (2) Payable metals consider
mining dilution, concentrator recoveries and Treatment
Charges/Refining Charges (TC/RC). (3) C1 Cash Costs
consist of mining costs, processing costs, mine-level G&A and
transportation costs net of by-product credits. (4) C3
Cash Costs includes C1 Cash Costs plus sustaining and expansion
capital, royalties, and closure costs. (5) All capital
expenditures are inclusive of contingency provisions to allow for
uncertain cost elements, which are predicted to occur but are not
included in the cost estimate. (6) Net of leasing capital
deferment and leasing costs. (7) Sum of expansion and
sustaining capital.
Table
3:
Key Financial Results and Costs
Economics |
Unit |
LOM |
IRR (pre-tax // post-tax) |
% |
30.3 //
22.2 |
Payback (pre-tax // post-tax) |
Years |
2.9 //
3.8 |
Revenue over LOM |
US$M |
21,517 |
Initial Capital |
Mining Pre-Stripping (Capitalized OPEX) |
US$M |
75.5 |
Mining Capital Equipment (1) |
US$M |
89.4 |
Total Mining (1) |
US$M |
164.9 |
Processing |
US$M |
938.7 |
Total Initial Capital (1) |
US$M |
1,103.6 |
Sustaining Capital |
Mining Equipment |
US$M |
952.4 |
Processing |
US$M |
94.6 |
Total Sustaining Capital |
US$M |
1,047.0 |
Expansion Capital – Processing (year 7) |
US$M |
687.2 |
Average LOM Operating Costs |
Mining Cost per tonne mined (2) |
US$ /
t |
2.04 |
Mining Cost per tonne milled (2) |
US$ /
t |
4.78 |
Mining Equipment Leasing Cost per tonne milled |
US$ /
t |
0.06 |
Processing Cost per tonne milled |
US$ /
t |
4.04 |
G&A Cost per tonne milled |
US$ /
t |
0.65 |
Total Operating Cost per tonne milled (2) |
US$ /
t |
9.53 |
Notes:
(1) Includes leasing costs and deferral of capital
associated with lease payments. Supplier-sourced leasing terms from
October 2023 are used in the mine fleet cost calculations that
include a 5-year lease period with 10.3% interest, 0.5% upfront
fee, and no residual payment. (2) Excludes leasing
costs.
Economic Sensitivities
Project economics and cash flows are most
sensitive to changes in the price of copper (Figure 2) providing
the highest potential for change in economics. However, mined grade
and recovery sensitivity are also high and future studies will seek
to optimize these parameters.
Figure 2: Post-Tax NPV and IRR Sensitivity Plots
Source: Ausenco 2024
Mineral Resource Estimate
The MRE was prepared in accordance with the
Canadian Institute of Mining, Metallurgy, and Petroleum
(“CIM”) Definition Standards (the “CIM Standards”)
incorporated by reference in National Instrument 43-101 (“NI
43-101”), with an effective date of July 23, 2024. The
Technical Report will be released by the Company and available at
www.orocoresourcecorp.com and on SEDAR (www.sedarplus.ca) under the
Company’s profile shortly.
The MRE includes the two primary mineralization
zones identified at Santo Tomas: North Zone and South Zone. These
zones display similar mineralization styles but are physically
separated by localized post-mineralization faults and material
currently defined as waste due to a lack of drilling. Consistent
with the previous study, the MRE is not constrained by the location
of the Huites Reservoir. Mineral resources are reported above an
effective cut-off grade (CoG) of 0.15% Cu and constrained by an
economic pit shell (see Table 4).
Table
4:
Mineral Resource Statement for the Santo Tomas Project, effective
July 23, 2024.
Category |
Zone |
Tonnes Mt |
Average Grade |
In-situ Metal3 |
|
|
CuEq10 |
Cu |
Mo |
Au |
Ag |
CuEq10 |
Cu 11 |
Mo 11 |
Au 11 |
Ag 11 |
|
|
% |
% |
% |
g/t |
g/t |
M lb |
M lb |
M lb |
koz |
koz |
|
|
Indicated |
North Zone
pit - sulphide |
540.6 |
0.37 |
0.33 |
0.008 |
0.028 |
2.1 |
4,465 |
3,976 |
95.4 |
483.4 |
36,524 |
|
|
Total
Indicated |
540.6 |
0.37 |
0.33 |
0.008 |
0.028 |
2.1 |
4,465 |
3,976 |
95.4 |
483.4 |
36,524 |
|
|
Inferred |
North Zone
pit - sulphide |
90.0 |
0.34 |
0.31 |
0.005 |
0.021 |
1.7 |
679 |
620 |
10.2 |
61.4 |
4,949 |
|
|
North Zone
pit - oxide |
4.4 |
0.31 |
0.31 |
0.002 |
0.053 |
1.6 |
29 |
29 |
0.2 |
7.4 |
228 |
|
|
South Zone
pit - sulphide |
399.2 |
0.36 |
0.32 |
0.008 |
0.023 |
2.0 |
3,132 |
2,789 |
71.2 |
294.4 |
26,200 |
|
|
South Zone
pit - oxide |
36.7 |
0.27 |
0.27 |
0.004 |
0.020 |
1.6 |
218 |
218 |
2.8 |
23.8 |
1,851 |
|
|
Total
Inferred |
530.3 |
0.35 |
0.31 |
0.007 |
0.023 |
1.9 |
4,058 |
3,657 |
84.4 |
387.1 |
33,229 |
|
|
Notes:
-
Mineral resources are not mineral reserves and do not have
demonstrated economic viability.
-
Abbreviations used in the table above include: Mt = million metric
tonnes, % = percent, g/t = grams per metric tonne, M lb = million
pounds, and k oz = thousand troy ounces.
- All
figures are rounded to reflect the relative accuracy of the
estimates. Totals in Table may not sum or recalculate from related
values in the table due to rounding of values in the table,
reflecting fewer significant digits than were carried in the
original calculations.
- Metal
assays are capped where appropriate. At this stage of the project,
it is the Company’s opinion that all the elements included in the
metal equivalents calculation have a reasonable potential to be
recovered and sold.
- All
dollar amounts are presented in US dollars.
- Bulk
density is estimated on a block basis using specific gravity data
collected on diamond drill core.
-
Economic pit constrained resource with reasonable prospects of
eventual economic extraction (“RPEEE”) were based on a copper price
of $4.00/lb, molybdenum price of $13.50/lb, a gold price of
$1,700/oz, and a silver price of $22.50/oz. Metal recovery factors
of 83.7% for copper, 66% for molybdenum, 53% for gold and 53% for
silver have been applied. Selling costs are $0.56/lb copper,
$1.69/lb molybdenum, $191.71/oz gold and $2.94/oz silver. Slope
angles varied by pit sector and range from 40 degrees to 49
degrees.
- The
in-situ economic copper (CoG) was calculated resulting in a 0.15%
Cu CoG.
- CoG
assumptions include: a copper price of $4.00/lb, molybdenum price
of $13.50/lb, gold price of $1,700/oz, and silver price of
$22.50/oz. Suitable benchmarked technical and economic parameters
for open pit mining, including a 98% mining recovery and costs of
mining at $2.40/t, processing at $4.79/t, G&A at $0.67/t, with
Private Royalties at 1.5% for molybdenum, gold, silver, and copper,
have been applied in consideration of the RPEEE. Recoveries are
applied as listed in Note 7.
-
Equivalent Copper (CuEq) percent is calculated with the formula
CuEq% = ((Cu grade * Cu recovery [83.7% sulphide or 75.0% oxide] *
Cu price) + (Mo grade * Mo recovery [59%] * Mo price) + (Au grade *
Au recovery [53%] * Au price) + (Ag grade * Ag recovery [53%] * Ag
price)) / (Cu price * Cu recovery [83.7% sulphide or 75.0% oxide]).
It assumed that the Santo Tomás Project will produce a conventional
(flotation) copper concentrate product based on metal recoveries at
83.7% Cu (sulphide) or 75% Cu (oxide), 59% Mo, 53% Au, and 53% Ag
based on initial preliminary metallurgical test work.
- Reported
contained individual metals in Table represent in-situ metal,
calculated on a 100% recovery basis, except for CuEq% (see Note
10).
The mineral resource estimation process includes
updated structural, lithologic, and mineralization models not
materially changed from the previous study, effective April 27,
2023. No additional drilling has been added and the estimation
methodology remains unchanged from the methodology used in the.
Differences in the MRE shown in Table 4 from the previous MRE are
due to: 1) inclusion of oxidized mineralization in the North Zone
pit (the “North Pit”) and South Zone pit (the “South
Pit”); and 2) updated economic and pit slope assumptions based
on the updated PEA study. The resource estimation methodology
involved the following procedures:
-
Database compilation and verification,
-
Construction of wireframe models for the major structures,
lithotypes, and controls on mineralization,
-
Definition of resource domains using a combination of lithotypes,
structure, oxidation, and mineralization grade shells,
- Data
conditioning (compositing and capping) for statistical and
geostatistical analyses,
-
Determination of spatial continuity through variography within the
estimation domains,
- Block
modeling and grade interpolation for all key economic variables
(Cu, Mo, Ag, Au, and Sulfur [S]) and secondary variables (arsenic
[As], calcium [Ca], potassium [K], lead [Pb], and zinc [Zn]),
- Block
model validation,
-
Resource classification,
-
Assessment of “reasonable prospects for eventual economic
extraction” (“RPEEE”) using a constraining economic pit shell and
selection of an effective cut-off grade (“CoG”), and
-
Preparation of the updated mineral resource statement.
SRK undertook the geological modeling and
mineral resource estimate using Seequent Leapfrog Geo and Leapfrog
Edge, respectively. The procedure involved construction of
wireframe models for structural geology controls, key geological
and mineralization domains, data conditioning (compositing and
capping) for statistical analysis, variography, block modeling and
grade interpolation followed by block model validation. Grade was
estimated using a combination of ordinary kriging and inverse
distance weighting cubed estimates for copper, molybdenum, gold,
and silver. Sulfur grades are estimated using inverse distance
weighting squared (“IDW2”) and bulk density is estimated
using a combination of simple kriging and IDW2. Grade estimation
was based on block dimensions of 50 m x 50 m x 10 m for the PEA
model (unchanged from previous studies). The block size reflects
current data spacing across the Project while considering a likely
open pit mining method. Classification of mineral resources
considers the geological complexity (structure, lithology,
alteration, and mineralization), spatial continuity of
mineralization, data quality, and spatial distribution of drilling
conducted at the Project.
The MRE is supported by 64,138 m of drilling in
158 holes. The drilling data represents a combination of holes
completed by Oroco from 2021 to 2023 and historical drill holes but
excludes drilling at Brasiles Zone (outside current project scope)
and one geotechnical hole (due to lack of assay data).
Mineralization has been identified outside
the current economic pit shell. The PEA highlights the
potential to define additional mineral resources on the property.
There is identified exploration potential for additional
mineralization in the southeastern and southwestern portions of the
South Zone based on observations from drilling and surface outcrops
in the area.
Mine Design
The mine design re-worked previous phase designs
to increase the number of pit phases from 4 to 20. Initial phases
are smaller to reduce waste stripping and allow for faster access
to higher grade mill feed, resulting in an average 0.51% CuEq ore
grade for the first 7 years of production. These smaller phases
have narrower access roads that require the use of small-scale haul
trucks (72 t capacity). Later in the mine life, the pit phases are
typically larger and will allow for the use of large-scale haul
trucks (240 t capacity). Over the life of the project, including
the pre-production waste mining year, 80% of the tonnes mined will
be with the large-scale equipment fleet.
The final pit design ensures no incursion upon
the Huites Reservoir, remaining outside of CONAGUA’s (Mexican water
authority) jurisdiction boundary (the “CONAGUA limit”).
Slope constraints derived from geotechnical domains were defined
from Phase 1 drilling on the Project.
Table 5 shows mineral inventory within the
ultimate pit design for this PEA.
Table
5:
Pit Constrained Resource
Mill
Feed |
Waste
Material |
Strip
Ratio |
Total
Material |
Tonnes(Mt) |
Cu
(%) |
Mo(%) |
Au(g/t) |
Ag(g/t) |
CuEq(%) |
Tonnes(Mt) |
Waste/Mill |
Tonnes(Mt) |
825.5 |
0.325 |
0.008 |
0.028 |
2.080 |
0.365 |
1,139.4 |
1.38 |
1,964.9 |
The proposed mining method is conventional open
pit truck and shovel operation with 10-meter bench intervals. Haul
trucks will be used for hauling mineralized material to the
crushing plant, long-term stockpile facilities, and waste to the
waste rock storage facilities (“WRSFs”).
The mine production plan contains 825.5 M tonnes
of mineralized sulfide material with an average grade of 0.37%
CuEq, and 1,139.4 M tonnes of waste material (including mineralized
oxide), resulting in a strip ratio of 1.38 over the LOM. CuEq is
calculated using the methodology described in the footnotes to
Table 4.
Mining operations will be carried out on a
24-hour per day, 365 days per year schedule. Total mined tonnes
will start at 27.2M tonnes mined during the pre-stripping year and
eventually ramp up to a maximum of 116M tonnes per annum (Mt/a) in
Year 13. The Project has a total life of 23.5 years, which includes
1 year of pre-stripping and one final year of stockpile rehandling
to the mill. Project expansion (Phase II) starts in Year 8 of
operation.
The mining sequence consists of 20 phases (10 in
the North Pit and 10 in the South Pit), which vary in minimum
mining width according to the type of equipment to be used. Early
years focus on mining the North Pit, while transitioning to larger
equipment to be used once the South Pit has opened up to wider
benches.
Mined tonnes, Mill Feed tonnes and Mineral
Inventory classification are shown in Figures 3, 4 and 5.
Figure 3: Mine Production Schedule –
Mineralized Material/Waste
Figure 4: Mill Production Schedule
Figure 5: Classification of Mineral Inventory
Process Design & Plant Infrastructure
Recent metallurgical test work results for
composite and variability drill core samples from the North and
South Zones demonstrated amenability to conventional flotation
recovery to produce a marketable copper and molybdenum concentrates
(given molybdenum levels observed in the bulk concentrate generated
during locked cycle tests). The following key metallurgical
parameters applied to develop the process design were:
- Axb
Index: 30.
- Bond
Ball Mill Work Index (75th percentile): 18.3 kWh/tonne.
- Grind
size P80 for flotation feed: 150 microns.
-
Metallurgical recoveries (over LOM): Copper 83.3%, Molybdenum
59.2%, Silver 53.9%, and Gold 53.2%.
-
Copper concentrate grade: 26.6%.
-
Molybdenum concentrate grade: 45%.
Mine haul trucks will transport plant feed
material to the dump pockets at the semi-mobile primary crushing
station which directly feeds into a large gyratory crusher. From
the primary crusher, plant feed material will be conveyed through a
tunnel to a live stockpile ahead of a processing plant containing a
secondary cone and tertiary HPGR crushing circuit. Tertiary crushed
product will feed into two twin ball mills in closed circuit with
cyclones to produce flotation feed at 80% minus 150 µm. The
flotation circuit will produce a bulk rougher concentrate that is
subsequently reground to 23 µm P80 prior to cleaner flotation
stages to produce a bulk copper-molybdenum concentrate. The bulk
cleaner concentrate advances to copper-molybdenum separation to
recover a molybdenum concentrate. Gold and silver report to the
copper concentrate. Copper and molybdenum concentrates are
dewatered prior to shipment in sealed containers to a concentrate
storage facility at the Port of Topolobampo for shipment to
overseas smelters.
The tailings are dewatered and pumped to a
cyclone sands station where coarse tailings report to build the
tailings storage facility (“TSF”) embankment and fines are
deposited within the facility. Water off the TSF is reclaimed and
recycled back through the process plant.
Figure 6 is an overall layout of the current
project site.
Figure 6: Mine Infrastructure, Pits, Process Plant Layout,
Tailings and Waste Rock Storage Facilities
Tailings and Waste Rock Storage Facilities
The storage of waste rock has been optimized and
offers the following benefits:
-
Shorter hauling distances,
- Lower
haul truck emissions, and
-
Allows for waste and mineralized material segregation.
Both the WRSFs and the TSF are designed with
ditches and berms to divert stormwater around rather than through
these facilities to minimize the volume of contact water requiring
additional processing. Contact water filtered through these
facilities will be captured and recycled back to the process
plant.
Power Infrastructure and Water Supply
The re-designed electrical supply is from a
built-for-purpose LNG combustion power plant located adjacent to
the El Encino-Topolobampo natural gas pipeline some 33 km from
site. This low carbon footprint power source option offers a cost
for power lower than the going state rate. A 115 kVA overhead power
line replaces the 230 kVA power line providing additional cost
savings.
Make-up process water supply is now sourced from
groundwater wells situated along the northern boundary of the North
Pit. This arrangement offers two key benefits not realized in the
October PEA:
-
Significant savings in the cost of piping.
-
Groundwater pumping at this new location will mitigate seepage into
the pits reducing the volume of contact water requiring additional
processing prior to discharge.
Geology and Mineralization
Porphyry Cu (Mo‐Au‐Ag) mineralization on the
Santo Tomas property is closely associated with intrusives linked
to the Late Cretaceous to Paleocene (90 to 40 Ma) Laramide orogeny.
Santo Tomas and most of the known porphyry copper deposits in
Mexico lie along a 1,500 km‐long, NNW trending belt sub-parallel to
the west coast, extending from the southwestern United States
through to the state of Guerrero in Mexico.
In the Santo Tomas area, Mesozoic‐aged country
rocks comprising limestone, minor sandstones, conglomerates,
shales, and a thick succession of andesitic volcanics were intruded
by a range of Laramide age intrusions related to the Late
Cretaceous Sinaloa‐Sonora Batholith. Multiple phases are recognized
ranging from dioritic to monzonitic in composition.
Mineralization is strongly structurally
controlled associated with the Santo Tomas fault and fracture zone,
which provided a pathway to quartz monzonite dikes, associated
hydrothermal alteration, hydrothermal breccias, and sulfide
mineralization. Sulfide minerals are dominated by chalcopyrite,
pyrite and molybdenite with minor bornite, covellite, and
chalcocite. Sulfides occur as fracture fillings, veinlets, and fine
disseminations together with potassium feldspar, quartz, calcite,
chlorite, and locally, tourmaline. Chalcopyrite is the main copper
mineral with minor copper oxides near surface.
Community & Environmental
Oroco continues to engage with the local
community on education, ongoing employment and other opportunities
as they present themselves. Oroco strives to maintain transparent
communications with local communities and public authorities at all
levels to ensure that key stakeholders are aware of the project
status and plans including responding to community concerns and
requests in a timely and genuine manner. Oroco maintains its
exploration permits and approvals in good standing.
Further environmental baseline studies and other
socio-economic, cultural, and community engagements are planned for
future EIS preparation and permitting.
Project Enhancement Opportunities
Several further opportunities to improve the
Project have been identified during the revised PEA Study. These
include but are not limited to:
-
Infill resource drilling in the area between North and South zones:
additional resource in that area would improve optimized pit
development and reduce mining costs.
-
Acquire ROM size distribution curves and perform additional
comminution studies and variability testing to better constrain
recoveries across the full range of expected mill feed grades based
on rock and alteration types.
-
Consider a flying belt conveyor design from primary crusher to the
mill feed stockpile.
-
Investigate coarse particle flotation to reduce comminution costs
and improve factors of safety on TSF design.
- Drill
hydrogeological test wells at the north end of the North Pit to
better define seepage rates into the pit, well-field design and
permitting requirements associated with groundwater pumping.
- Drill
selected geotechnical holes to optimize pit slope angles and reduce
mining of waste.
-
Optimize heavy equipment leasing terms.
-
Initiate environmental baseline studies.
-
Complete a trade-off study to compare the operating costs
associated with electric drills and shovels to the costs to operate
diesel-powered units. Include the impact on power supply
infrastructure for the former.
- A
detailed pioneering road design to the starting benches of every
phase is recommended to better determine the number of tonnes
required to be moved using a small fleet.
-
Evaluate the trade-off between buying and maintaining a fleet of
smaller pioneering equipment and contracting all pioneering work to
a third-party.
-
One or more iterations of pit design are recommended to minimize
overall LOM stripping while still focusing on reducing the quantity
of pre-stripping required.
A geological-geochemical conceptual model will
inform the ongoing development and refinement of geochemical and
mine rock management plan for the site. The predicted occurrence of
large volumes of net neutralizing mine waste materials to be mined
in early years will be confirmed, as the buffering characteristics
of these waste materials can be effectively utilized as part of the
overall waste rock management strategy. Additional geochemical
assessment of the acid rock drainage / metal leaching risk for the
Project will be implemented to provide additional test work and
sampling coverage, and to confirm preliminary study
findings.
Cautionary Notes to Investors
PEAThe reader is cautioned that the PEA
is preliminary in nature, and that it includes inferred mineral
resources that are considered too speculative geologically to have
the economic considerations applied to them that would enable them
to be categorized as mineral reserves, and there is no certainty
that the preliminary economic assessment will be realized.
Mineral Resource and Reserve Estimates
In accordance with applicable Canadian
securities laws, all Mineral Resource estimates of the Company
disclosed or referenced in this news release have been prepared in
accordance with the disclosure standards of NI 43-101 and have been
classified in accordance with the CIM Standards. Mineral
Resources that are not Mineral Reserves do not have demonstrated
economic viability. No Mineral Reserves have been estimated for
the Project. The estimate of mineral resources may be materially
affected by environmental, permitting, legal, title,
socio-political, marketing, or other relevant issues. In
particular, the quantity and grade of reported inferred mineral
resources are uncertain in nature and there has been insufficient
exploration to define these inferred mineral resources as an
indicated or measured mineral resource. It is uncertain in all
cases whether further exploration will result in upgrading the
inferred mineral resources to an indicated or measured mineral
resource category.
Qualified Persons
The updated PEA for the Project summarized in
this news release was prepared by Ausenco with input from SRK and
has been incorporated in a technical report prepared in accordance
with NI 43-101 which will be available under the Company’s SEDAR
profile at www.sedarplus.ca and on the Company’s website. The
affiliation and areas of responsibility for each of the Qualified
Persons involved in preparing the PEA, upon which the technical
report will be based, are as follows:
Table
6:
Qualified Persons for PEA
Qualified Persons |
Qualification |
Company (location) |
Position / Oversight |
James Arthur
Norine |
P.E. |
Ausenco Engineering USA South Inc. |
Vice President, Southwest USA |
Peter
Mehrfert |
P. Eng. |
Ausenco Engineering Canada ULC |
Principal Process Engineer |
James
Millard |
M. Sc., P. Geo. |
Ausenco Sustainability ULC |
Director, Strategic Projects |
Scott C.
Elfen |
P.E. |
Ausenco Sustainability ULC |
Global Lead Geotechnical Services |
Andy
Thomas |
M. Eng., P.Eng. |
SRK Consulting (Canada), Inc. |
Principal Rock Mechanics Engineer |
Fernando
Rodrigues |
BS Mining, MBA, MMSAQP |
SRK Consulting (U.S.), Inc. |
Practice Leader, Principal Consultant (Mine Plan, Mining CAPEX +
OPEX) |
Ron
Uken |
PhD,PrSciNat |
SRK Consulting (Canada), Inc. |
Principal Structural Geologist |
Scott
Burkett |
RM-SME B.Sc. Geology |
SRK Consulting (U.S.), Inc. |
Principal Consultant (Resource Geology) |
Each QP listed in Table 6 has reviewed and
verified the content of this news release.
Andrew Ware, RM SME and QP for Oroco has
reviewed and verified the contents of this news release and has
approved the document for public release.
About OROCO
The Company holds a net 85.5% interest in those
central concessions that comprise 1,173 hectares “the Core
Concessions” of The Santo Tomas Project, located in northwestern
Mexico. The Company also holds an 80% interest in an additional
7,861 hectares of mineral concessions surrounding and adjacent to
the Core Concessions (for a total Project area of 9,034 hectares,
or 22,324 acres). The Project is situated within the Santo
Tomas District, which extends up to the Jinchuan Group’s Bahuerachi
Project, approximately 14 km to the northeast. The Project hosts
significant copper porphyry mineralization defined by prior
exploration spanning the period from 1968 to 1994. During that
time, the Project area was tested by over 100 diamond and reverse
circulation drill holes, totalling approximately 30,000 meters.
Commencing in 2021, Oroco conducted a drill program (Phase 1) at
Santo Tomas, with a resulting total of 48,481 meters drilled in 76
diamond drill holes.
The drilling and subsequent resource estimates
and engineering studies led to an initial MRE publication (May
2023) with a PEA (including an updated MRE) being published and
filed in late 2023, with the current update work being undertaken
in 2024. The MRE released with the initial PEA in late 2023
included an Updated Mineral Resource for the North and South Zones
of the Santo Tomas Project, identifying Indicated and Inferred
resources of 561 Mt @ 0.37% CuEq and 549 Mt @ 0.34% CuEq,
respectively. The revised PEA includes a further Updated Mineral
Resource for the North and South Zones of the Santo Tomas Project,
identifying Indicated and Inferred resources of 540.6 Mt @ 0.37%
CuEq and 530.3 Mt @ 0.35% CuEq, respectively.
The Project is located within 170 km of the
Pacific deep-water port at Topolobampo and is serviced via highway
and proximal rail (and parallel corridors of trunk grid power lines
and natural gas) through the city of Los Mochis to the northern
city of Choix. The property is reached, in part, by a 32 km access
road originally built to service Goldcorp’s El Sauzal Mine in
Chihuahua State.
Additional information about Oroco can be found
on its website at www.orocoresourcecorp.com and by reviewing its
profile on SEDAR at www.sedarplus.ca.
For further information, please contact:
Richard Lock, CEOOroco Resource Corp. Tel:
604-688-6200 Email: info@orocoresourcecorp.com
www.orocoresourcecorp.com
About Ausenco
Ausenco is a global company redefining what's
possible. The team is based across 26 offices in 15 countries
delivering services worldwide. Combining deep technical expertise
with a 30-year track record, Ausenco delivers innovative, value-add
consulting studies, project delivery, asset operations and
maintenance solutions to the minerals and metals and industrial
sectors (www.ausenco.com).
About SRKSRK Consulting was formed in
Johannesburg, South Africa, in 1974 as Steffen Robertson and
Kirsten. Today, SRK provides focused advice and solutions for
clients requiring specialized services, mainly in the fields of
mining, surface and underground geotechnics, water, waste
materials, process engineering, the environment, and mineral
economics. SRK employs more than 1,700 professionals
internationally and has over 45 permanently staffed offices in 20
countries on six continents (www.srk.com).
Cautionary Note Regarding Forward-Looking
Information
This news release contains “forward-looking
information” within the meaning of applicable Canadian securities
legislation based on expectations, estimates and projections as at
the date of this news release. Forward-looking information involves
risks, uncertainties and other factors that could cause actual
events, results, performance, prospects and opportunities to differ
materially from those expressed or implied by such forward-looking
information. All statements other than statements of fact included
in this document constitute forward-looking information, including,
but not limited to, objectives, goals or future plans, statements
regarding anticipated exploration results and exploration plans,
Oroco’s expectations regarding the future potential of the Santo
Tomas deposits, its plans for additional drilling and other
exploration work on the Santo Tomas deposits and the potential to
advance or improve the PEA study.
Forward-looking information is not, and cannot
be, a guarantee of future results or events. Forward-looking
information is based on, among other things, opinions, assumptions,
estimates and analyses that, while considered reasonable by the
Corporation at the date the forward-looking information is
provided, inherently are subject to significant risks,
uncertainties, contingencies and other factors that may cause
actual results and events to be materially different from those
expressed or implied by the forward-looking information.
Factors that could cause actual results to
differ materially from such forward-looking information include,
but are not limited to, capital and operating costs varying
significantly from estimates; the preliminary nature of
metallurgical test results; delays in obtaining or failures to
obtain and comply with required governmental, environmental or
other Project approvals; uncertainties relating to the availability
and costs of financing needed in the future; changes in equity
markets; inflation; fluctuations in commodity prices; delays in the
development of the Project; COVID-19 and other pandemic risks;
those other risks involved in the mineral exploration and
development industry; and those risks set out in the Company’s
public documents filed on SEDAR at www.sedarplus.ca.
Should one or more risk, uncertainty,
contingency or other factor materialize or should any factor or
assumption prove incorrect, actual results could vary materially
from those expressed or implied in the forward-looking information.
Accordingly, you should not place undue reliance on forward-looking
information. Oroco does not assume any obligation to update or
revise any forward-looking information after the date of this news
release or to explain any material difference between subsequent
actual events and any forward-looking information, except as
required by applicable law.
Neither the TSX Venture Exchange nor its
Regulation Services Provider (as that term is defined in the
policies of the TSX Venture Exchange) accepts responsibility for
the adequacy or accuracy of this news release. No stock exchange,
securities commission or other regulatory authority has approved or
disapproved the information contained herein.
Christy Fabros
Oroco Resource Corp.
(604) 688-6200
info@orocoresourcecorp.com
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