The Oromin statement “growth through discovery” has never rang so true as it has today. The Annual General Meeting was moved to a conference room outside of the Oromin office for the first time since I began attending. The meeting was well attended with the usual faces representing the company; Chet Idziszek, David Mallo, David Scott, Doug Turnbull and James Stewart (sorry if I missed anyone). There were also brokers from Vancouver and Edmonton in attendance as well about 8 private investors (again apologies if I missed anyone). The faces are beginning to look familiar there were however some new ones that I have not yet met. This shows the dedication that Oromin investors have to the company and the projects being developed. Many companies I follow have a turnover of investors but Oromin retains the same ones. I believe this is possible because rarely are there similar projects and managements of quality to chose from at present. There were 22+ million shares represented in person and proxy at the meeting. James Stewart disposed of the business portion of the meeting efficiently and we moved on to the AGM presentation.
There were 7 directors that accepted nominations for directorship: Derek Bartlett, Bob Brennan, Nell Dragovan, Chet Idziszek, Robert Sibthorpe, James Grant, and Doug Turnbull. Dr Haimila will remain a consultant and advisor to the company regarding the Santa Rosa project; he will reside in Argentina and oversee the progress in country.
The financials have been filed and accepted by the exchange with apologies from James alluding to inter-jurisdictional financial regulations holding up the process. Oromin has expended over $40 million on the project so far shared with its partner Bendon Intl. of Saudi Arabia. The exploration activity has tripled with the addition of 4 drills in the last year that are now drilling ahead 24 hours a day. One drill is down for maintenance and one has been on station drilling water, monitoring wells gathering data for the already commenced feasibility study due in Q2 09.
The Shareholder Rights Plan was accepted and is in place to give management additional time to consider options and enhance shareholder value in the event of a non-permitted bid. Full description is available in the information circular dated June 30, 08
Now to the good stuff…Sabodala is a prolific gold district that will rival any of the known districts to date world wide. It is indeed a “world class discovery”. There are not many multi million ounce deposits left to be discovered in the world and we have several in one project! There are massive amounts being spent in infrastructure within the district. Mittal is putting in a rail line that will be within site of our property boundary. MDL has a power plant and mill being completed in months to be online later this year!
Discussion on the Sabodala project centered on the “snapshot” resource calculation, provided by SRK Consulting. I must admit I previously wasn’t sure about the term snapshot but now completely understand and agree with the term. It was initiated using the first 555 holes for 85000 meters drilled to the cut-off. I say initiated because now that the modelling is complete, using the Gemcom software, SRK can add additional holes to the program adding ounces with each hole. Perhaps the new slogan should be “adding ounces with every hole.” The 1.4 million ounces we have on the books will now be added to very quickly; because of the geometry of the deposits they are being drilled with the drills stepped out from the surface expression of the mineralization. What that means is that the drills are moved back and angled to intersect the parallel zones at closer to a right angle. This has the effect of leaving mineralization within the pit shell calculated by SRK, out of the calculation. In other words we have “invisible ounces” lying on top of the SRK calculation. We know they are there but they are not accounted for, YET! This is done so we know the ounces are there on top of the drilled data but before we test that we go and drill sideways(along strike) to add ounces faster. Those ounces can be estimated knowing the orientation of the zones and depth to first contact, as well as the trench results atop the buried mineralization. There are also many meters of drilling completed below the initial pit shells not currently in the calculation. SRK is a very thorough and conservative company giving a dependable initial resource calculation. There are many companies out there that would not have taken the time to understand the geometry and model the deposits with the precision SRK used. This could have lead to larger initial resource number, however, may not have translated to reserve status as well.
Cash costs estimates are in line with other African operations in the 350 to 450 range depending on the usual factors, open pit vs. underground ratios, strip ratios etc. Metallurgical studies are very positive with excellent recoveries that I believe can be improved!
I think the star of the show today was Masato. I have said it and I believe that Grandich has as well as David Mallo, who is a pretty understated guy from my correspondence with him. Masato is a monster”! This phrase, more than any other resounded today. It is, in fact, large! it has the largest geochem signature on strike. At 1700 meters it is being drilled out along strike now with only 144 holes of the 550 included in the resource calculation. It contributed 48% of the ounces with less than 25% of the holes!!!!! Again.. HALF the ounces came from 25% of the holes. Masato will not only be a monster but a company making deposit! Masato is the focus right now as far as drilling goes. There are, I think 3 or 4 drills dedicated to drilling out the full extent of the deposit; with 2 to 3 holes completed per day. Let me remind you that the deposit doesn’t necessarily end with the geochem signature; it can dip below the laterite cover and have no surface expression (which I think it does). Incidentally Masato extends onto MDL’s land and it is the #1 priority exploration target for them as well!
Golouma is also a monster by exploration standards. It was mentioned that many companies look for years and never find one deposit as good as any of ours. In fact, taken as a project any one of our 4 deposits would make any company proud. We have 4 plus 13 more viable targets. Golouma has already merged 2 of its lobes and I believe that, by looking at the pit shells today, it will again merge with west and south becoming one extending out toward Cloverleaf! We are now not far off from being able to connect Golouma to Cloverleaf and I think this will happen giving a boost to ounces! Golouma is significant in the fact that it consists of several deposits intersecting at a near right angle. This tells me there is much more to discover on out concession than even I first thought. The presence of the mineralization outside the “normal” NE SW trend tells me there is emplacement on primary and secondary structures indicating one massive mineralizing event or possibly two. The structures cross cut each other so either the one event filled both or there were 2 events that deposited gold. Either way, the possibility of structural emplacement doubles to include both the NE and SW trending structures and the more east west trending Golouma structure! This really gets interesting when you realize the Cloverleaf geochem signature rivals that of Golouma!! Spelled out, this means Cloverleaf could possibly double the size of Golouma more with economies of scale.
Other priority targets include Cloverleaf as mentioned above. Sekoto which is most likely a whole different ball of wax with the possibility of a porphyry type deposit, Sekoto, Niakaifri, and 10 more!! The ounces are there we just need to drill them!
Other developments to watch for are a listing on a senior exchange, and a top tier investment advisor so as to aid in establishing Oromin as an attractive option for majors looking to replace ounces.
News will be forthcoming very soon on the latest results not included in the resource calculation. Watch for updates to the resource calculation in Q4 and again in Q1 09 then a feasability to be done Q2 09 and drilling Santa Rosa also Q1 09
Oromin has done some amazing work in Senegal, laying the ground work for several world class deposits (I think up to 5) and many other satellite deposits feeding one mill as is the norm in Africa. Understand, the pace of this project will accelerate with much of the ground work already having been done. Results will quickly add ounces and deposits will grow along strike, to depth and laterally. The deepest drills at Masato are about 325m and Golouma just over 500m still finding mineralization. Something had to feed all this surface mineralization!!
My gut feeling is that there a lot is happening behind the scenes that will soon see fruition. To those selling shares I say thanks and to those buying I say congratulations on finding one of the (if not the) best developing gold play in the world today!!
Warmest regards always