Unlike many of its competitors, Oromin Explorations Ltd. says it emphasizes the importance of maintaining steady growth by focusing only on highly prospective, less-explored properties.

The global meltdown might have some exploration companies scrambling to locate as many promising mineral districts as possible, but that’s not, nor has it ever been Oromin Exploration Ltd.’s business philosophy, according to President Chet Idziszek. Instead, the junior exploration company has maintained steady growth by focusing on highly prospective, less-explored areas.    

Oromin is investing in an emerging gold district in eastern Senegal, Africa, and an oil basin in Argentina’s Cuyana Basin. As a sign of Oromin’s skill at discovery, in early January, it announced the discovery of three new gold deposits at the Sabodala project in Africa, complementing the other three deposits already discovered.    

But the unique thing about its international operations is not simply the impressive discoveries it has made, but rather the initiatives it has in place to advance social progress in the communities near its projects. Oromin provides on-the-job training, health and education support and infrastructure support for local villages, and has demonstrated environmental stewardship through the programs in place at its projects, Idziszek asserts.    

Exploration + Processing recently interviewed Idziszek about the state of Oromin’s current and prospective exploration programs, its fiscal and social responsibilities and its plans to expand its international projects.   

Exploration + Processing: Describe the company’s path toward growth in recent years.    

Chet Idziszek: The first step of Oromin’s growth path was to identify and acquire assets of world-class caliber at the earliest possible stage. As a junior company, we don’t try to compete with senior producers in established mineral districts. Instead, we adopted a pioneering approach and focused on highly prospective, less-explored areas. This strategy was used to acquire the Sabodala Project in eastern Senegal, an emerging gold district with similar geology as producing gold camps in nearby Mali, Africa, as well as the Santa Rosa Dome Prospect in an under-explored portion of Argentina’s prolific oil-producing Cuyana Basin.    

The next step was to systematically evaluate these assets through property-wide exploration programs in order to select the best quality targets for follow-up drilling campaigns. Now, we’re focused on drilling and developing these priority targets in order to determine their production potential.   

E+P: How has the global commodities market impacted Oromin?   

CI: Commodity prices rise and fall as economies strengthen and weaken. We’ve seen these cycles before and think it’s more important to look at long-term demand than short-term price fluctuations. Demand for oil and gas will only grow as the world’s population grows. As for gold, prices have strengthened in recent years, reflecting gold’s longstanding role as a hedge against currency weakness and financial uncertainty. We’re not adversely affected by weak commodities prices at this stage, but obviously we’re watching supply and demand fundamentals closely.      

E+P: Given the current economic climate, what are your tactics to stay competitive?  

CI: Access to capital is always a challenge in weak financial markets. Projects today must be more robust than they needed to be just a year ago. We’re already seeing some large projects placed on hold because they’re not economic at current metal prices.    

For juniors, a track record of discovery and exceptional results are the best ways to stay competitive. Our team has a track record of success that includes key roles in two of Canada’s richest mineral discoveries: the Hemlo gold mine in Ontario and the Eskay Creek gold-silver mine in British Columbia. More recently, we’ve discovered multiple gold deposits and zones at Sabodala.    

E+P: How is your exploration program structured?  

CI: Our work programs start with a property-wide evaluation using prospecting, geological mapping, geochemical and geophysical surveys and other modern exploration methods. This type of detailed systematic evaluation takes time, especially at Sabodala, which covers 230 square kilometers of prospective ground that has seen little or no past exploration. [Evaluation] was an essential step in selecting priority targets for the advanced exploration, drilling and development programs now underway.    

We now have a two-pronged approach at Sabodala: advancing one or more deposits toward feasibility, development and ultimately production; and continually testing and upgrading newer targets.      

E+P: What is the scope of the drilling program at Sabodala? How will it position the company in coming years?   

CI: Our first programs were focused on generating a NI 43-101-compliant resource estimate. This was achieved in 2008 when we announced an initial inferred resource containing 1.4 million ounces gold within three near-surface deposits: Masato, Golouma West and Golouma South. This estimate – based on 555 holes drilled to May of 2008 – provided an initial snapshot of the ultimate potential of the project.    

We expect an increase to this resource base shortly, incorporating results from more than 370 additional holes completed to year-end 2008. Step-out and infill drilling will continue throughout 2009, focused on the established deposits and three newly upgraded deposits: Kerekounda, Niakafiri Southeast and Maki Medina. Preliminary drilling will also test additional gold zones that represent the next tier of priority targets for 2009.   

The results of drilling to date have confirmed Oromin’s original conceptual model of multiple gold deposits within a rapidly developing mineral district of eastern Senegal. They’ve also positioned the company as an emerging gold producer.   

E+P: What does the portfolio look like in Argentina?   

CI: Our sole asset in Argentina is a majority interest in the Santa Rosa Project located within an under-explored portion of the Cuyana Basin. This basin has produced more than 1.28 billion barrels of oil and has established infrastructure of pipelines and a refinery. A $4.1 million (U.S.) work program has been approved for the project in Mendoza Province, with wildcat drilling scheduled to start in the first half of 2009.      

E+P: How strong have your exploration results been at current projects?   

CI: We’ve completed seismic surveys and a geological evaluation of the Santa Rosa Dome Prospect and are excited by its potential, but won’t have any results until drilling starts in the first quarter of this year. We’ve had strong results from Sabodala from the start, most recently from the newly advanced Kerekounda deposit, which returned 52.61 grams gold per ton over nine meters and 48.68 grams gold over four meters among other high-grade intercepts. We’re encouraged that grades appear to remain strong at depth, which adds an underground dimension to a project with known open-pit potential.    

E+P: How will you continue to expand your international programs?   

CI: The initial resource estimates for the established and newly defined deposits at Sabodala provide an excellent anchor for ongoing programs to establish further resources, but we recognize that advanced development will require additional capital in the years ahead.   

We’ve attained a listing on the Toronto Stock Exchange (TSX) – Canada’s senior stock exchange – to further raise our profile with the investment community. We’ve started early-stage work on the pre-feasibility study scheduled for this year, and expect this study will attract industry and market attention.    

Another positive development is the construction of a new gold mine at a nearby project operated by Mineral Deposits Ltd. of Australia. This open-pit mine is expected to produce 168,000 ounces of gold annually, starting in 2009. Other companies have reported discoveries in the region. Randgold Resources describes its nearby Massawa Project as a potentially “multimillion-ounce prospect” based on “good continuity” and “significant grades and widths” from initial drilling of two main zones that remain open for expansion. Randgold, which operates gold mines just across the border in Mali, plans to release its first resource estimate and a scoping study for Massawa in the first quarter of 2009.     

In mid-2008, IAMGOLD Corp. reported the discovery of “multiple zones of significant gold mineralization” at its wholly owned Boto Project, further supporting the view that this area of southeastern Senegal is poised to become a major African gold camp.   

E+P: Are there any unique technologies that you are employing on site? How does the reverse circulation process fare for the company?   

CI: Geochemistry was a useful tool in the early stages of exploration as gold-in-soil geochemical anomalies led to the discovery of most of the new deposits and zones. Reverse circulation is a useful drilling technique because it is less expensive than diamond drilling and is an effective “first-pass” tool to test multiple targets. But diamond drilling is also necessary, particularly when it comes time to define resources and generate verifiable resource estimates that satisfy regulators.          

E+P: What type of emphasis do you place on capital investments?   

CI: Our capital investments are presently directed toward advancing our projects to the development and pre-production stages. We don’t just invest in drilling and technical programs. Since 2006, we’ve spent roughly $800,000 (Canadian) on social programs at Sabodala, with particular emphasis on improving water, infrastructure, health services, education and training opportunities for local communities. These ongoing investments have translated into strong local support for our project.    

E+P: What is your outlook on the market?   

CI: It’s difficult to predict what the market will do, especially in times of economic uncertainty, but most experts believe demand for most commodities will grow over the long term. As for our business plan, we have several options.   

It is well known that juniors discover most of the resources needed by senior producers to replace what they mine each year. Traditionally, juniors with major discoveries are acquired by senior companies or form partnerships with them to develop their discoveries, partly because it’s so difficult and expensive to permit and develop new projects today.    

Some juniors develop smaller mines and use the cash flow to expand operations over time, which is another option. We’ll examine all options once we have the pre-feasibility study in hand later this year. In addition, this study will also provide the mining and investment community with the first assessment of Sabodala’s economic potential.