Is Santo Tomas worth rebooting by Oroco Resources $OCO

New article by Newton over on

by @Newton on March 7, 2018

Is Santo Tomas worth rebooting by Oroco Resources $OCO

How would you feel about a large land package in Sinaloa sold from a private company based in the Bahamas to a Canadian company listed on the TSX Venture? It’s enough to make most investors run away in fear, but I encountered one such story and gave it a closer look. Here’s what I found.

Oroco Resource (TSXV:OCO) recently announced the acquisition of a large land package with a very large copper porphyry in Sonora, Mexico. There is some corporate drama around this project, with a legal dispute having kept it out of public companies since 1993. The owners pushed forward with an economic report in 1994, but it’s been a long and quiet 20 years at site for the project as far as I can tell. Oroco Resources announced that work done in 2017 breathed new life into the project with a good work program that includes property-wide mapping and reassembling old drilling information.

With Oroco shares trading around $0.13, the company has a $10M valuation. That’s a good number for the valuation of a new exploration company, but makes me feel a bit late to the party. Regardless of my feelings, the reality is that we are still quite early in this new phase of the Santo Thomas story as Oroco hasn’t yet registered their ownership of the project! With shares trading at a fraction of a penny per pound of copper in the ground, the stock hasn’t gotten ahead of itself yet.

It looks like things are on track now and another chapter is shaping up in the long story of the Santo Tomas Copper Porphyry Project. Keep in mind that “Active exploration of the Property spans the period 1968 to 2003” as in the report below.

You can find a brief report on the project here. It was done when the project was held privately. There are other reports out there that are a little hard to find as they pre-date SEDAR, but I will endeavour to find them and write about them. In the meantime, there are quite a few things to consider in this report.

Again, see the full report here. Short report but lots to consider if it’s your first time meeting the Santo Tomas copper porphyry, like me.

First thing that occurred to me is that there is a lot of metal in the ground here. It’s not clear from this report how much of it is economic, but I have to pay attention to 1.3 billion tonnes of rock hosting 10 billion pounds of copper equivalent at a 0.15% cutoff.

My first thought is that it is too much heavy lifting to get off the ground in that form, but there surely must be some subset of the full deposit that would be good enough to help get things started? I look forward to studying the other reports for a sense of a possible starter pit and watching what Oroco does in that regard.

You have to wonder how Santo Tomas ever got so big? I’ve heard stories of exploration taking on a life of its own, where a junior tries to make a deposit as big as possible in the throes of a bull market and ends up building something that’s just not right for the upcoming bear market. As these deposits gather dust over the next phases of the market cycle, the opportunity remains. With Santo Tomas held in limbo since the 1990s, it’s missed a few bull markets. Great to see it coming back to the markets now as things are heating up for these massive copper projects.

Let’s go through some more of details on the project to see what it looks like.

Great to see the surface exposure, even if the deposit is not oxidized. I saw mention of that in the short report here, but will have to wait for a larger report to better understand the geology.

Note the Santo Tomas project is fairly close to a railroad line that goes to a port in Sinaloa. Apparently there has also been some talk of government spending to support capital expenditures for the project, too. All good so far!

This cross section raises a couple concerns for me.

One, if the deposit is restricted to one side of hill then other side makes for nasty strip in an open pit mining scenario. It’s unclear how all that shakes out from this short report, but an economic study was done in 1994 that will surely give some detail on that.

Two, what is the basis for the lower subsection of the deposit model? The holes end in mineralization but don’t extend to the depths of the deposit as indicated by the line in the diagram. There are probably other holes going that deep on another line nearby to give some confidence about the extension of the deposit to depth, but this part of the diagram left me a bit confused. Always important to consider how many holes are giving you how much of the deposit, right?

A final thing from the report is the distribution of copper grade shown above.

These grades are composites, which indicate the average grade over 15 meter intervals from all the 89 drill holes for the purpose of “linking them into closed volumetric shapes”. In other words, these are the grades used in the 3D block model for the mine plan. 15 meters is a typical height for the benches in an open pit mine, so these are mining widths.

At first blush, it looks like like a lot of low-grade material. I don’t see much potential for a high-grade core based on this diagram but there may well be enough of that +0.5% material to make this thing work. And there are some benches at around 1.2% copper, which may be something to get excited about if they are near-surface!

I was initially looking for more of the +1% material, but there could be quite a lot of that hiding in 5-meter intervals contained within these 15-meter composites. I don’t really have a good sense for the marginal grade in these composites and look forward to reading the economic report for more.

All this information was good, but I don’t know the engineering economics of these porphyries well enough to say if this passes a quick acid test. I love a good turnaround story, but it’s tough to be early.

Then, I looked at a posts from @cal on CEO.CA/OCO. In particular, this picture.

Now, you really have to be careful with photos.

There was a lot of excitement around core photos that boiled over and left a nasty mess in 2017, let alone the wild excitement that followed video of people digging up gold in Australia in the same way as had been done for years before. Hard to guess at what will excite a crowd and dangerous to get caught up in the excitement.

I’m not a geologist, but I pay attention when I see photos like this. I don’t know where this photo was taken, but the Oroco news release mentions that initial work programs focused on detailed mapping and satellite reconnaissance at Santo Tomas. How much stuff like this did they see?

This photo gives me hope for a high-grade core within that +10 billion tonnes in the known deposit. If this photo was taken at the same deposit, then they may be able to make a bunch of noise really quickly about reinterpreting the geological model. By the way, I think that will be a key to getting some energy into these massive porphyries that are stalled from past cycles. And if the photo is from somewhere else on the property then it’s time to get excited about a new discovery. Either way, this will command some market attention as the property is 10,902 hectares, which is twice size of Manhattan. Sounds like Santo Tomas is worth rebooting!

Santo Tomas Technical report 2011

Total tonnes at greater than 0.15 CUEQ are 1,337,724,375 or rounded as
1.34 Billion metric tonnes.

The total amount of equivalent pounds of copper is 10,351,439,887 or 10,3
billion lbs equivalent. The break down is 1,438,000 ounces of gold, 69.6
million ounces of silver, and 171,214,530 pounds of molybdenum and 9
billion pound of total copper. On a gross basis, the two bodies contain 41
billion dollars value at the prices quoted in the Proven, Probable, and
Possible classes of the two pits driven by CUEQ.

There is one further mine design calculated, and summarized below. Taking
all classes of the CUEQ geological tonnes as reported in the first resource
CUEQ summary at 1.9 billion tonnes (0.355 CUEQ), an ultimate pit is
found containing 1.8 billion tonnes of an economic “reserve’ grading 0.358
CUEQ. This is 14 billion pounds of contained equivalent copper.

The first pass for an In Fill exploration program will focus on the North pit,
and additional 10 – 15 holes in the South, with targets selected that will
close to double the MI resources in the South. The North area drilling will
focus on where to place the drill hoies, which will increase the Measured
class preferentially, but dramatically, extend the Indicated both to the west
and to depth in the center of the high-grade ore zone.

This brief Technical Report will be followed up by an extensive Technical
document formatted along the requirements of the TSX NP 43-101

TechnicalReport-Santo Tomas-Thornton-2011

Santo Tomas Pre feas Bateman 2003


Oroco book-ends Santo Tomas Mineralization

Phase one work at Santo Tomas confirms mineralization continues north and south onto Oroco ground.

Interpretation of the Synthetic Aperture Radar data,
historic drilling information and surface geological
indicate the mineralized porphyry dike swarm is
present for at least one kilometer on Papago 17
and remains open to the south and down dip.

Lukas Lundin Chases Base-Metal Buy With $3 Billion Budget

Lukas Lundin Chases Base-Metal Buy With $3 Billion Budget
February 28, 2018, 11:49 AM PST Updated on March 1, 2018, 7:13 AM PST
Copper ‘might be the easiest asset to work with,’ Lundin says
The group would also ‘love’ to acquire another gold project
Bank of Montreal expects an active year for mining M&A, with significant dialog and a “quite robust” IPO pipeline
Sweden’s billionaire Lundin family is looking to spend as much as $3 billion on a new industrial-metal asset as prices rally, before turning its attention to scouring for a new gold project.

Lukas LundinPhotographer: Darryl Dyck/Bloomberg
Lundin Mining Corp. is on the prowl for a long-life zinc, nickel or copper asset and would shell out $1 billion to $3 billion, Lukas Lundin said in an interview Wednesday from the BMO Global Metals & Mining Conference in Florida. An existing operation is his preference and copper “might be the easiest asset to work with.”

The ideal asset would produce more than 500 million tons of ore if it were an open-pit mine, or 100 million tons if it were an underground operation, he said.

“I’m looking around right now,” he said. “It would be great to do something by the end of the year. ”

With his younger brother Ian Lundin, the 59-year-old oversees a global family business with stakes in commodities including industrial metals, gold, diamonds, oil, uranium and Latin American cattle. The company has about $1.5 billion in cash but could afford to borrow to fund a larger acquisition, he said.

Lundin Mining bought a controlling stake in Freeport-McMoRan Inc.’s Candelaria/Ojos del Salado copper operations in Chile in 2014 and the Eagle nickel and copper mine in Michigan from Rio Tinto Group in 2013.

On Sunday, Australia’s largest gold producer, Newcrest Mining Ltd., announced it was buying a 27 percent stake in Vancouver-based Lundin Gold Inc. for $250 million. It has an option to increase its involvement by spending on exploration around the Fruta del Norte gold-and-silver project in Ecuador, Lundin Gold’s sole asset.

‘Have to Build’
Lundin said on Wednesday that he would “love” that company to acquire another gold project and intends to start searching once Fruta del Norte is up and running and assuming Newcrest is on board. The Australian company is “going to be an active shareholder,” he said.

Ideally, the gold asset would be in the Americas, he added, estimating it might cost $500 million to $1 billion, plus development costs. Normally, Lundin’s modus operandi is to buy developed assets in down cycles and look to unlock value.

“Trying to take on existing operations, you’re not going to find anything,” Lundin said. “So you’re going to have to build.”

Iron Dreams
Overall, Lundin is upbeat on the metals sector, expecting steady global growth to start fueling infrastructure spending. Copper looks “good’,’ while zinc “should be good for a little while.” Nickel is “hard to read,” the coal space is “quite interesting” and iron ore is “stronger than expected.”

Lundin says he wishes he could add an iron-ore operation to the family stable of assets but the sector is too locked-up by the big three players: BHP Billiton Ltd., Vale SA and Rio Tinto Group.

As for cobalt — the source of much buzz at this year’s conference — he’d love to acquire an asset, but “they’re not easy to find” and he’s not actively looking, he said. Lundin has a stake in a cobalt refinery in Finland with Freeport, but exited cobalt mining with the sale of their joint venture stake in the Democratic Republic of Congo last year.

Lundin says he would like to sell his renewable energy assets, but needs to build “critical momentum” before trying to find a buyer.

That willingness to buy and sell is a contrast to many of his peers who have remained on the sidelines after only recently repairing their balance sheets after the collapse of the commodity super-cycle.

The appetite for M&A is “selectively there,” Ilan Bahar, BMO Capital Markets’ new co-head of Global Metals & Mining, said Monday in an interview with Bloomberg Television.

Egizio Bianchini, the outgoing co-head of global mining for BMO, who has led the conference since its inception 27 years ago, said there are still some deals being done in the coal and steel sector but, overall, large-scale M&A has yet to come back after the commodities downturn. This is particularly true of gold, he said, as gold-mining stocks lag the metal and investors are seduced by flashier battery metals such as cobalt.

“In terms of M&A, I don’t believe there’s going to be big deals at the very top, both in the diversified miners and in the one-commodity miners,” Bianchini said. “When you get down into the mid-tier and the small-tier, I still think that’s where most of the action is going to happen.”

Lundin expects to see “forced” mergers in the gold space in the next few years, given the lack of reserve replacement but also believes the broader mining sector is poised for a fresh wave of activity.

“Over the next two years you might see the majors plow back in.”

Oroco agreement for Papago 17 interest accepted

Oroco agreement for Papago 17 interest

 2018-02-27 19:40 ET – Property Agreement

The TSX Venture Exchange has accepted for filing a property agreement dated Jan. 26, 2018, between Minera Xochipala S.A. de C.V. (a wholly owned subsidiary of Oroco Resources Corp., the company) and Ubaldo Treviszo Ledezma (the vendor), whereby the company may acquire a 77.5-per-cent interest in the Papago 17 mineral concession (212 hectares), located in Sinaloa, Mexico. Consideration is 100,000 Mexican pesos (approximately $6,700 (Canadian)) and two million common shares (deliverable upon issuance of the mineral concession). The property is subject to a 2-per-cent net smelter return (NSR).

Oroco fires warning shot

The news friday from Oroco OCO.v  is a road map of the coming days and weeks. The next news will be completion of one of two big events for Oroco. Either they will get the Papago claim registered (25% of the deposit) or they will have completed the purchase of Altamura (35% or more of the deposit). One or both of these events should clear up a lot of the uncertainty about Oroco’s determination to get in the drivers seat at Santo Tomas (they currently own 20%)

Oroco gains foothold in billion ton copper deposit

Many will have noticed I have not put out any original commentary for a long time. The truth is during the market downturn there was really not much to say. That has all changed as of the announcement from Oroco Resources OCO.v earlier today.

While the announcement of the Santo Tomas properties acquisition may come as a surprise to many, that a company with a market cap of only 10 million dollars could negotiate an interest in a billion ton copper deposit, I assure you to management it is not.

Oroco Resources has been working for years to secure rights and unravel a legal quagmire that has held the property off the market for decades. The process appears to be coming to an end with an exciting outcome for Oroco, a mining micro cap that is looking to capitalize on years of hard work. There are few projects available of this scale and advanced nature to global majors, never-mind a junior with a discovery and successful sale of a single gold asset under its belt.

Santo Tomas was discovered in the late 1960’s and worked on up until the 90’s. The non-compliant global resource stands at a billion tons of about .4% copper including gold, silver and molybdenum credits. Contained copper metal is in the ballpark of 8.5 billion pounds! The deposit is divided into a north and south zone and is open to depth and laterally.

Exall, a previous operator commissioned a study by Bateman that concluded:

The study — carried out by Bateman Engineering, Mintec and Mountain States R & D — envisions a 60,000-tonne-per-day operation that would produce, on an annual basis, 306 million lb. copper, 69,000 oz. gold and 2.3 million oz. silver.

(That’s over 1.1 billion dollars per year at today’s prices and enough copper for 1.7 million Teslas )

Minable reserves in the North Area, using a 0.2% copper cutoff, are calculated to be 428.8 million tonnes grading 0.368% copper, 0.057 grams gold and 1.87 grams silver per tonne. The stripping ratio is estimated at 1.4-to-1 and production costs (including smelting and refining charges) are projected to be US66 cents per lb. Additional reserves of 567.7 million tonnes grading 0.405% copper are present in the South Area deposit.

The news of today indicates a 77.5% ownership in the surrounding prospective properties. A 77.5% ownership in Papago pending registration, which could come any day and a 20% interest in Altamura copper (negotiating for majority interest) which, holds the main deposit.

I have compiled the map below, which is an overlay of the OCO map contained in the news of today and a deposit outline from a report of a neighboring property. It appears the Papago property holds 20 to 30% of the mineralization! That, with the 20% interest in Altamura gives Oroco a massive foothold in the Santo Tomas deposit. Assuming 8.5 billion pounds Cu metal, Papago at 77.5% of 25% of the deposit and 20% of the main deposit through Altamura, Oroco today controls 3.35 billion pounds of copper!




What could this mean for Oroco’s share price given 3.35 billion pounds of copper? Transaction prices for pounds in the ground varied from about 4 cents to more than 10 cents last cycle. A low estimate of 5 cents per pound result in some fantastic valuations for OCO. 3.35bn pounds times 5 cents divided by 78 million shares gives 2.14 USD!

Valuations on deposits of this scale will do nothing but go up in a period of high copper prices and rising demand. Automakers are adopting a much more aggressive timeline for the rollout of hybrid and full EV’s than the most bullish of analysts had predicted. The coming clean energy revolution also increases demand for copper. Conventional power requires about 1 ton of copper per megawatt. Wind generation requires 4 tons per megawatt.

The news of today is absolutely massive, for a micro cap to secure a foothold in a multi-billion dollar deposit is unheard of. It appears there are some hurdles to clear but for Oroco to make the disclosure they did today there must be a great likelihood of them completing the task at hand and securing a majority stake in one of the few remaining billion ton porphyry deposits in North America. Once these transactions are complete there will be no shortage of buyers wanting to secure copper output for decades to come!




Great speculation on OCO.v Oroco

The Oroco Santo Tomas property acquisition is only a speculation at this point although there have been some pretty good connections made that lead me to believe it to be true.

From what i have discovered there has been a legal impasse lasting a decade or more preventing work or transfer of the property, meanwhile copper gold and silver prices have continued to climb.

OCO has been trying to unwravel the layers of legality and i believe are working smarter not harder

Im waiting to hear confirmation that it is in fact the right project and with great interest how exactly they are acquiring the project.

My personal speculation is that those involved know that there is great value here and want to monetize the asset and may finally be working together to settle their differences and put a nice bow on it to sell to a major..

I have taken a sizeable position before any news since i believe if/when it it confirmed the stock will be difficult to buy in any size for prices anywhere near what it has been trading at these last months..

judging by what i have read and heard, few believe it is possible for David to slay this Goliath

If it turns out to be true the new believers will push us to new highs.. the market will be surprised and when it is, large price changes can happen very quickly both up and down.

Valuations for OCO and the project will be easy, looking at past and more recent transactions in this space

xx cents per pound times contained pounds plus credits for gold and silver $$$

Santo Tomas has had decades of work done, it is not only a massive project but it is advanced..(adding to the disbelief that OCO could in fact land such a deal)

imho i believe we could be in a perfect storm for Oroco stock. Copper is in a bull market, demand is high and increasing for years to come.  Projects of this scale and advanced development are rare, most have already been bought or are already owned by majors.

I’m hoping the smart money is out of bitcoin and weed and looking for something real to invest in ~copper, OCO and Santo Tomas~



Greenbriar Capital Corp. has launched a wholly owned independent subsidiary company called Realblock, a first-of-its-kind functional real estate blockchain enterprise. The company will unleash the key attributes of blockchain on the transaction-heavy real estate industry; not as an academic exercise, but as a real-time solution to the entire real estate market. Blockchain allows for a faster, safer and cheaper real estate transaction and Realblock will be leading this change.

Realblock is partnering with top title insurance and escrow companies, and the founder of the Blockchain lab at Arizona State University. Proprietary software will streamline and decrease the costs of the escrow and title insurance process — a byzantine paper-heavy and rubber stamp process, that has seen little change in decades.

Mike Boyd, the former chairman of the board of supervisors for Pima county (Tucson, Ariz.) and the former elected county recorder of real estate deeds, also in Pima county, Arizona, will be president of the Realblock.

Strategic partnership with Title Security of Arizona

Besides Mr. Boyd, the company has partnered with Tom Sullivan, chairman of Title Security of Arizona, a joint venture affiliate of First American Title, one of the largest title insurance companies in the United States. In addition, Mr. Sullivan heads up the largest private title plant in Arizona.

This major blockchain development is launched under the watchful eye of Prof. Todd Taylor, who founded the Blockchain Lab at Arizona State University.

In addition, Arizona is at the legal forefront when it comes to blockchain. A newly enacted Arizona law stipulates that digital signatures on smart contracts, a prominent feature of blockchain, are valid and legally enforceable. Arizona is the first state to approve this law in the United States. Legal experts agree that most real estate transactions will be done with “smart contracts” in the near future. And according to a recent Forbes magazine article: “Blockchain technology makes information in real estate more accessible, cuts out middlemen and reduces the risk of fraud and theft. A more secure, speedier, trusted process for buying and selling property is good for everyone involved.”

The company expects new additions to the board in the near future, as a result of this blockchain enterprise.

Mike Boyd, president of Realblock, says: “The archaic and byzantine trillion-dollar American system of processing and recording real estate transactions wastes time and money. Realblock will change that. It will provide escrow and title companies with a new tool that will limit the time, save money and increase the safety of real estate closings. This will be the first real estate blockchain enterprise to address the complex legal, title, due diligence and escrow aspects of a complete transaction, solving a comprehensive solution by incorporating all the players in the transaction.”

Stock options

The company also announces that, subject to approval of the TSX Venture Exchange, the company will grant 450,000 incentive stock options to certain directors, officers and consultants of the company. The options are exercisable at a price of $1 per share for a period of five years. The options are granted pursuant to the company’s stock option plan and will be subject to applicable regulatory hold periods.

Private placements

Greenbriar announces that it has engaged Ascenta Finance Corp. to assist the company in a private placement of up to 800,000 units at $1 per unit. Each unit comprises one share and one-half of one share purchase warrant, each whole warrant exercisable at $1.50 for a period of two years.

About Greenbriar Capital Corp.

Greenbriar Capital is a leading developer of renewable energy, sustainable real estate and smart energy products. With long-term, high-impact, contracted sales agreements in key project locations and led by a successful industry-recognized operating and development team, Greenbriar targets deep valued assets directed at accretive shareholder value.

We seek Safe Harbor.

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