TORONTO, Jan. 30, 2017 /CNW/ - Orvana Minerals Corp. (TSX:ORV) (the "Company" or "Orvana") is pleased to report that the re-commissioning of the carbon-in-leach circuit (the "CIL Project") at the Company's Don Mario Mine is near completion.
Don Mario's first gold-silver doré bar was poured on January 22, 2017, and assays are being performed to confirm results and inform any required process adjustments to the carbon-in-leach ("CIL") circuit. The Company is currently working to close a doré sales contract on anticipated production from the CIL circuit, with the first delivery under this agreement expected in February 2017.
Total capital costs for the CIL Project are expected to be in line with the capital cost estimate commissioned by the Company in 2016. For the selected process option, the capital cost estimate was US$6.4 million to accuracy estimate of +/- 15% including owner's costs and 15% contingency.
The Company anticipates that the CIL circuit will deliver substantially higher average gold recoveries of approximately 80% compared to current average gold recoveries of approximately 55%. The expected increase in gold ounces produced will positively impact unitary cash costs and provide free cash flow in the second half of fiscal 2017, allowing for full repayment of the US$7.9 million project financing by the end of fiscal 2017.
During fiscal 2016, the Company's mining activities transitioned away from the remaining Upper Mineralized Zone ("UMZ") to the higher gold grade Lower Mineralized Zone extension ("LMZ"). The CIL Project is expected to maximize the value of material mined at the LMZ. In recent months, Don Mario increased the processing of mined production from the lower gold grade UMZ and other stockpiles, while LMZ material has been stockpiled for future processing via the CIL circuit.
DCGS Exploration and Mining Consulting ("DCGS"), under the supervision of Gino A. Zandonai, who is an independent Qualified Person under NI 43-101, upgraded the mineral resource estimate for the LMZ as at September 30, 2015 to a mineral reserve estimate as at September 30, 2016. The following table summarizes the results of the mineral reserve estimate:
| Total Proven and Probable | ||||||||
| Contained | Contained | Contained | ||||||
| Zone | Tonnage | Grade | Grade | Grade | Metal | Metal | Metal | |
| (000 t) | (g/t Au) | (% Cu) | (g/t Ag) | (000 oz Au) | (t Cu) | (000 oz Ag) | ||
| Proven | - | - | - | - | - | - | - | |
| Probable | 793 | 2.62 | 0.60 | 5.94 | 66.8 | 4794.6 | 151.4 | |
| Proven and Probable | 793 | 2.62 | 0.60 | 5.94 | 66.8 | 4794.6 | 151.4 | |
Notes:
- CIM definitions were followed for Mineral Reserves and were prepared by G. Zandonai, a qualified person for the purposes of NI43-101, who is an employee of DGCS SA and is independent of the Company.
- Mineral Reserves are estimated using copper equivalent cut-off grade of cut-off grade of 0.70g/t AU for the LMZ. Cut-offs were calculated using recent operating results for recoveries, off-site concentrate costs, and on-site operating costs.
- Mineral Reserves are estimated using average long-term prices of US$1,100 per ounce gold, US$2.75 per lb copper, and US$16.5 per ounce silver.
- Numbers may not add due to rounding.
- The mineral reserves at the LMZ have been based on processing by the CIL and flotation methods.
The Company has filed on SEDAR a report titled "Don Mario Mine Operation 2016 Technical Report" prepared in accordance with National Instrument 43-101 by DCGS (the "Don Mario Technical Report") to support this upgrade along with the current independent resource and reserve estimates at Don Mario.
The Don Mario Technical Report is also available on Orvana's website at www.orvana.com.
About Orvana
Orvana is a multi-mine gold and copper producer. Orvana's operating assets consist of the producing gold-copper-silver El Valle and Carlés mines in northern Spain and the producing gold-copper-silver Don Mario mine in Bolivia. Additional information is available at Orvana's website (www.orvana.com).
