Oroco Announces Increase in Private Placement

Oroco Announces Increase in Private Placement

VANCOUVER, April 16, 2018 /CNW/ – Oroco Resource Corp. (TSXV: OCO) (“Oroco” or “the Company”) is pleased to announce that, due to the private placement previously announced on April 11, 2018 (the “Private Placement”) being oversubscribed, but not yet closed, it is increasing the Private Placement by an additional 1,500,000 units. The increased private placement will now comprise up to 9,000,000 units at a price of $0.10 per unit (one share and one half share purchase warrant per unit) to raise gross proceeds of up to $900,000. Terms and conditions, and use of proceeds of the Private Placement remain as announced on April 11, 2018.

The Private Placement is subject to the acceptance of the TSX Venture Exchange.

Neither 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 release.

Copper supply crunch earlier than predicted

Copper supply crunch earlier than predicted — experts
Cecilia Jamasmie | about 6 hours ago |
Copper supply crunch earlier than predicted — experts
Port facilities at Cobre Panama, the latest large copper development project to have come online. There are no other similar mines scheduled to start production for many years. (Image courtesy of First Quantum.)
Copper demand will surpass supply earlier than expected, with the first clear signs coming as early as next year, experts attending the 17th World’s Copper Conference being held this week in Santiago, Chile, said.

According to Arnaud Soirat, chef executive for copper and diamonds at Rio Tinto, increased consumption from new technologies, including electric vehicles, will drive demand for the metal and its by-products, he said.

“We anticipate global market supply and demand will keep close to balance in 2019 and 2020,” he said, noting that after that the deficit will become increasingly evident.

The outlook is widely shared by other experts, including CRU analyst Hamish Sampson. According to him, unless new investments arise, existing mine production will drop from 20 million tonnes to below 12 million tonnes by 2034, leading to a supply shortfall of more than 15 million tonnes.

Over 200 copper mines currently in operations will reach the end of their productive life before 2035.
The situation looks even worse when considering that over 200 copper mines currently in operations will reach the end of their productive life before 2035, Sampson said on Monday.

Only if every single copper project currently in development or being studied for feasibility is brought online before then, including most discoveries that have not yet reached the evaluation stage, the market could meet projected demand, the consultant said.

Colin Hamilton, managing director of commodities research at BMO Capital Markets, fully agrees with Sampson. He told MINING.com on Tuesday that even when there was an apparent rise in copper inventories on exchanges around the world, which somehow has dented confidence in the metal, the outlook is very positive.

“What we’ve seen is a shift from invisible to visible stockpiles,” Hamilton said, adding that Chinese inventories so far this year are at the lowest levels in recent times.

Delivery to exchanges, however, does weigh on prices because of data-driven investors, which adds to the facts that shareholders are still somewhat opposed to companies investing in new projects and exploration. “They just want returns,” Hamilton said.

He believes the expected copper supply crunch will become “much more real” in 2019, due to the lack of mega-projects coming on stream before the mid-2020s and as global production will peak by the second half of next year.

Work history of Santo Tomas

by @Newton on March 26, 2018
Another look at the work history of Santo Tomas before Oroco Resource $OCO

The Santo Tomas porphyry deposit that Oroco Resource Corp. (TSXV:OCO) is working to secure ownership over has an interesting history. It was “actively” explored from 1968-2003 with 106 diamond and RC drill holes comprising about 30,000 meters. That may sound like a lot, but it’s really not. It’s fair to say that Santo Tomas was incompletely drilled by past operators, who didn’t chase mineralization along strike or to depth.

Just look at this cross section from 1994 pre-feasibility study done by Bateman Engineering that shows how the holes stopped at a set length, even when they were returning well-mineralized material with good grades.

Hindsight may be 20-20, but it’s important to study the project’s history in close detail to get handle on the scale of the opportunity as it stands and what kind of important questions may have remained unanswered for all these years. So far, I’m happy with what I am seeing.

The early days at Santo Tomas were led by ASARCO, a storied company originally named as the American Smelting and Refining Company. It is now a wholly-owned subsidiary of Grupo Mexico. ASARCO may have left a bunch of mining sites with nasty pollution, but they also left some great exploration stories that have been largely overlooked for one reason or another.

ASARCO drilled 43 core and 16 percussion holes at Santo Tomas, mostly in the North Zone. They drilled a few holes 2 kilometers away in the South Zone and found good copper mineralization, but the holes there were more widely spaced. All in all, ASARCO made a great initial push at Santo Tomas. Their work was foundational for everything that came after and their drilling program set a high-water mark that no-one else has surpassed yet.

Another legendary mining company made their mark on the project when Penoles optioned Santo Tomas in 1973 and drilled 6 holes. All the holes were drilled in the North Zone and were meant to to tighten the spacing to increase confidence as they calculated a new mineral resource. Almost 20 years went by before any more work was done.

In 1990 and 1991, some work was done by another group to “re-interpret the geology” and “confirm the reliability of the prior exploration programs”. I am a big fan of reinterpreting the geological model for a particular deposit that isn’t quite working, but I don’t think that was necessary at Santo Tomas. I think it just needed more drilling — step out and drill deeper!

Exall Resources started work in 1993 and drilled 33 RC holes for 4,000 meters, which was a step in the right direction.

For example, two holes in the oxide domain of the North Zone returned 1.14% copper over 160 meters near surface. These were great results that surprise me as copper is usually leached-out of the oxide domain of a porphyry deposit. It’s just a footnote in a report now, but it could take on new life as Oroco Resource Corp. steps in to add a new chapter to the story of Santo Tomas.

As I discuss in this article, Exall eventually completed a resource estimate and PFS that used all the data on the project. Great news, but it focused mainly on the North Zone. What could be hiding in plain sight at the South Zone?

There is good potential to double the tonnage in M&I categories at the South Zone from Inferred with 10-15 holes, as in a 2011 report by John Thornton. However, there’s even more potential for whoever is willing to step-out along strike as there is an untested area to the southwest of the South Zone. Between all this infill and step-out drilling, there is a lot of low-hanging fruit at the South Zone.

There is a lot of low-hanging fruit at the North Zone, too. There is still lots of room for infill drilling to convert indicated to measured and increasing the indicated resource itself by stepping out to the west or drilling deeper in the center of the high-grade ore zone. The 2011 report mentions this high-grade zone, but it can be a bit hard to see it in the reports.

We can see a bit of evidence of the high-grade in the past estimates of tonnage that show relatively large amounts above 0.4% copper. Note how almost half the total tonnage is above 0.4% copper equivalent, particularly at the North Zone.

Santo Tomas offers a full suite of options to increase confidence, extend the known envelope of mineralization, and better define the high-grade core. It all puts Oroco Resource Corp. in a position to come storming out of the gate as they bring the property back to the public markets. I will be watching for more from Oroco soon!

Augusta sold for $550 Million, Oroco?

A few comments on Peter Bell’s look at the news releases from Exall as they optioned and explored Santo Tomas, after going through those same releases from Exall from between 1993 and 1996.

The option price would seem to be reasonable, as at time copper prices were relatively low, about 1/3rd lower than current prices adjusted for inflation. Santo Tomas was then at a much earlier stage of exploration that it was after all the work Exall did, and in the context of the time would have been considered low grade. Average copper grades being mined have fallen a lot since then – from over 1% then to just above 0.5% now. A resource with a grade of 0.4-.5% wouldn’t have moved the dial in 1993.

But today……….in 2011 a resource of 950 million tonnes owned by Augusta, with an average grade of about 0.4% was bought by Hudbay for $550 million (ST looks to be >900 million tonnes, currently estimated at <0.40% with lots of potential and an expectation for increases in both numbers.). And, in 2015 Southern Copper bought El Pilar, 290 million tonnes of 0.3%, for $100 million and called in “opportunistic.” And, in 2011 Hudbay also acquired Norsemont and its Constancia deposit - 400 million tonnes, 0.42% Cu - for $363 million. There are plenty of other examples of similar acquisitions. I digress, but the point is that ST is lot (!) more valuable now than it would have been in 1993/4. Exall then starts a process that sees 4,000 meters of drilling, metallurgy testing, scoping of all aspects of a mine…. pretty major stuff and all conducted by firms that would have been the gold standard of the day – Mintec, Bechtel, Bateman, Lakefield Research. So, I see where they would have spent the kind of money they raised, and as the project grew to be something much bigger than they had originally bargained for, they would have needed to go bigger with the reports and the costs would have risen, likely exponentially. But in the end, they got some very credible names to do work that advanced the project from a small oxide Cu play into a major porphyry copper deposit that was economic at the time but still likely then considered low grade, but with numbers that today look world class. And just as they would have been scratching their heads figuring out how to advance the thing, along comes the Sumitomo copper market rigging scandal in 1995. Copper prices were seen to have been manipulated and inflated for about a decade. Copper prices then slid for 6 years, gold did as well, and the junior mining market was a ghost town. By 2001 copper prices were at a century low, and gold was an irrelevant relic. Exall had no chance. Britannia seemed to get involved just as the scandal and resultant collapse in copper prices started, so I would filter their response through that lens. Aside from these observations, a few things from Exall releases jumped out at me. Peter mentions trenching results were announced but he didn’t cite the numbers. Here they are: Trench 1 25m 0.41% Cu 0.11 g/t Au Trench 2 50m 0.81% Cu 0.68 g/t Au Trench 3 50m 0.70% Cu 0.52 g/t Au Trench 4 125m 0.85% Cu 0.50 g/t Au Average 250m 0.76% Cu 0.501 g/t Au In equivalent terms, that average is about 1% Cu. All of these are well above the average grade of the deposit. This suggests that 1) the grades overall reported by Exall, may not accurately reflect the deposit and will increase with infill drilling, and/or, 2) higher grades exist in what would be an area at surface that could be mined initially. To these two points, in the Exall releases it is stated, “Both areas are open at depth and on strike and indications are that reserves and head grade will increase significantly with additional drilling.” – by both areas, they mean N and S. This is likely just a function of the methods used to estimate resources that use a discount from the grade in a given drill intersection to calculate resources at a given distance from that insection. So, as these areas of the deposit get filled in the grade in these discounted gaps rises. Ever notice how Reserves and M&I Resources tend to be higher grade than Inferred? This is often the reason. Also in Exall's releases.... “a high-grade core of 300 million tonnes @ >0.5% Cu exists.” In another release they restate, “The drilling has also confirmed the zoning that was previously suspected and a high-grade core exists.”

In another release and likely referencing a different resource estimate using a different cut-off they say…”“Indicated reserves have been increased from the reported 195 million tonnes grading 0.52% copper to 480 million tonnes grading 0.40% copper, 0.0016 opt gold and 0.0031% molybdenum.

And…”Hole numbers 14 and 25 showed 160 meters of 1.14% copper.”

So, while I think Peter’s walk through those releases is a good idea, my takeaway from the same process is to think that ST is a world-class deposit, with enough “high” grade within the global resource to set it apart, and with positive production qualities – strip, metallurgy, location and infrastructure, etc.

Is Santo Tomas worth rebooting by Oroco Resources $OCO

New article by Newton over on ceo.ca

by @Newton on March 7, 2018

https://ceo.ca/@Newton/is-santo-tomas-worth-rebooting-by-oroco-resources-oco

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
document

TechnicalReport-Santo Tomas-Thornton-2011

Santo Tomas Pre feas Bateman 2003

Bateman-ST-PreFeas-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
By
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).

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