Big Numbers from Oromin!
Oromin Explorations drills six m of 81.83 g/t at OJVG
Ticker Symbol: C:OLE
Oromin Explorations drills six m of 81.83 g/t at OJVG
Oromin Explorations Ltd (2) (C:OLE)
Shares Issued 135,572,829
Last Close 5/11/2011 $1.10
Thursday May 12 2011 – News Release
Mr. Chet Idziszek reports
OJVG ANNOUNCES RESOURCE UPDATE, NEW DRILL RESULTS AND ADDITIONAL MINERAL POTENTIAL
Oromin Explorations Ltd., (“Oromin”), on behalf of Oromin Joint Venture Group Ltd., (“OJVG”) is pleased to announce the results of mineral resource updates completed by SRK Consulting (Canada) Inc. (“SRK”) for the OJVG Gold Project in Sénégal, West Africa. Oromin is also pleased to report estimates of additional mineral potential that exist downdip of the current resource models that are not included in this resource update. In addition, we continue to discover new deposits and new zones within existing deposits, details of which are reported below.
Chet Idziszek, Oromin’s President and CEO, stated, “the resource update announced today and the heap leach PEA announced last week highlight the ongoing growth in scale and attractiveness of the OJVG Gold Project and we continue to believe that this year will see further success through exploration and engineering activities. Most significantly, we are very pleased to have confirmed the continuity of mineralization beneath the Masato 2010 reserve pit and have delineated almost three quarters of a million ounces of indicated gold resources that we believe is amenable to underground mining. Additionally, we are working jointly with our equal partner, Bendon International, to examine development, financing and strategic alternatives to maximize value from our collective 87% interest in what we both see as one of West Africa’s next gold mines.”
Golouma Style Deposit Resources
In addition to providing a basis for an updated geological and mineral zone interpretation at the Golouma style deposits, drilling in the latter half of 2010 was intended to expand the mineral resources at depth to an indicated level of classification so that the process of identifying new mineral resources and subsequent conversion to mineral reserves can be expedited. This involved not only drilling the down dip extensions of the deposits, but drilling them at tight enough spacing so resources could be largely classified as indicated. As a result of this close spaced drilling, OJVG has confirmed excellent continuity at depth, giving even greater confidence in the down dip potential of the Golouma West, Golouma South, and Kerekounda deposits. In addition, the close proximity and overlapping infrastructure design for two of these similar style deposits from the 2010 Feasibility Study suggests that Golouma West and Golouma South should now be considered as one deposit and will be reported as such henceforth.
This Resource estimate update involved a complete re-interpretation by SRK of the geologic and mineralized models of all Golouma Style deposits. As a result of the remodelling, the following improvements have been made:
– Overall increase in indicated and inferred resources;
– Geological interpretation has improved confidence and increased continuity of mineralisation within the deposits and their downdip projections
– Average depth extent of resource definition increased from 250 metres to 350 metres from surface – Volume of Golouma Style deposits’ wireframes has increased by 24%
– Wireframes for all deposits have been redesigned for a lower cut off grade and successfully demonstrate the greater tonnage potential, large scale continuity and a resource model more conducive to underground mining methods. As expected, the new wireframes include lower grade samples which reduce the overall average grade.
A total of 78 drill holes (29,000 metres) have been completed at Golouma, Kerekounda and Kourouloulou since the previous SRK resource estimates announced in July of 2010 (see news release of July 15, 2010). Compared to the SRK July 2010 resource estimate (constrained by optimized pit), the new drilling (also constrained by optimized pit), revised interpretation and updated resource estimate resulted in a 13% increase (157,000 ounces) in indicated resource ounces and a 24% increase (35,500 ounces) in inferred resource ounces, with the average depth extent of resources increasing from 250 metres to 350 metres from surface.
The Tables below summarizes SRK’s 2011 and previous 2010 combined open pit constrained and underground resources for the Golouma Style Deposits.
May 2011 Combined Open Pit Constrained (cut off grade 0.37 g/t Au) and Underground (cut-off grade 1.0 g/t Au) resources
GOLOUMA STYLE INDICATED RESOURCES INFERRED RESOURCE
Tonnage Grade ContaineTonnage Grade Containe
DEPOSIT Kt g/t Au oz Kt g/t Au oz
Golouma West & So 11,106 2.941,049,40 946 2.78 84,500
Kerekounda 1,470 5.77 272,700 334 5.29 56,700
Kourouloulou 172 9.7 53,800 124 10.85 43,300
TOTAL 12,748 3.361,375,90 1,404 4.09 184,500
July 2010 Combined Open Pit Constrained (cut off grade 0.40g/t Au ) and Underground (cut-off grade 1.0 g/t Au) resources
GOLOUMA STYLE INDICATED RESOURCES INFERRED RESOURCE
Tonnage Grade ContaineTonnage Grade Containe
DEPOSIT Kt g/t Au oz Kt g/t Au oz
Golouma West & S 9,374 3.21 967,000 750 3.28 79,100
Kerekounda 1,073 6.34 218,500 189 3.99 24,300
Kourouloulou 85 11.92 32,500 177 8 45,500
TOTAL 10,532 3.521,218,00 1,116 4.82 148,900
Masato Deposit Resources
The goal for the drill program at the Masato Deposit during the latter half of 2010 was to fully define by infill drilling the deeper, higher grade body of mineralization that extends beneath the proposed pit at the Masato Deposit. Contained within the 2010 and current resource estimate for Masato, the 2010 Feasibility Study defined only open pit probable reserves of 460,000 ounces of gold (10.2 M tonnes at 1.41 g/t Au) as there was insufficient drilling density at that time to delineate a higher grade zone of mineralization beneath the proposed open pit. New drilling at the Masato Deposit consisted of infill drilling that both confirmed continuity and expanded the limits of the deeper, higher grade mineralization. The infill drill spacing was tight enough so that the majority of the deep resource expansion at Masato could be categorized as indicated resources. As a result, OJVG has successfully outlined 721,460 ounces of indicated gold resources below 2010 Feasibility Study open pit at a grade of 2.1 g/t gold.
This resource estimate on the Masato Deposit also involved a complete re-interpretation of the 2010 geologic and mineralized models resulting in an improved geological model, improved continuity and increased the OJVG’s confidence in the down dip potential of the high grade zones of mineralization at depth.
The previous resource estimate for the Masato Deposit was completed by DRA America Inc. and utilized an overall cut off grade of 0.40 g/t Au (but unconstrained by an optimized pit), as opposed to SRK’s methodology of using an optimized Whittle pit shell to constrain their estimate for the purpose of reporting mineral resources that have “reasonable prospects” for economic extraction by an open pit. For the current Masato resource estimate, SRK used an optimized pit shell based on a $1300/oz gold price cut-off and a 1.5 metre minimum thickness to report contiguous mineralization below this pit shell that is potentially amenable to underground mining methods. Although the additional 2010 drilling (completed after the previous DRA resource estimate at Masato) has expanded the down dip extent of the Masato Deposit, the Whittle resource shell used by SRK to constrain the mineral resource resulted in a lower tonnage and contained ounces than reported by DRA in its2010 resource estimate announced in July of 2010.However, the SRK 2011 constrained indicated mineral resource estimate for Masato represents an increase of 139,000 ounces over the SRK 2010 constrained indicated mineral resource estimate, which we believe is a more accurate comparison.
The tables below summarize SRK’s 2010 and 2011 combined open pit and underground resources for the Masato Deposit.
May 2011 Combined Open Pit Constrained (cut off grade 0.37 g/t Au ) and Underground (cut-off grade 1.0 g/t Au) resources for the Masato Deposit
MASATO DEPOSIT 2011 COMBINE INDICATED RESOURCE INFERRED RESOURCE
Tonnage Grade ContaineTonnage Grade Containe
Kt g/t Au oz Kt g/t Au oz
35,531 1.28 1,457,30 3,233 1.25 129,700
July 2010 Combined Open Pit Constrained (cut off grade 0.40 g/t Au ) and Underground (cut-off grade 1.0 g/t Au) resources for the Masato Deposit
MASATO DEPOSIT 2010 COMBINEINDICATED RESOURCE INFERRED RESOURCE
Tonnage Grade ContaineTonnage Grade Containe
Kt g/t Au oz Kt g/t Au oz
35,062 1.17 1,318,70 2,389 1.21 93,300
Since the previous mineral resource estimate at Masato, a total of 14,000 metres in 50 (predominantly infill) drill holes have been completed at Masato. These holes have confirmed the existence and continuity of higher grade mineralisation below the 2010 Feasibility Study open pit which could be amenable to underground mining and which was not included in 2010 Feasibility Study. The table below summarizes the portion of the new resource estimate >1.0 g/t gold cut-off grade that extends below the 2010 reserve pit and will be evaluated as a potential source of underground reserves.
MASATO DEPOSIT INDICATED RESOURCE INFERRED RESOURCE
UNDERGROUND
RESOURCES Tonnage Grade ContaineTonnage Grade Containe
Kt g/t Au oz Kt g/t Au oz
>1.0 g/t Au cut off 10,667 2.1 721,458 1,580 1.99 100,875
All resource modeling was completed by David Rowe, CPG, and Fred Brown, CPG, under the supervision of Wayne Barnett, Pr.Sci.Nat. and Marek Nowak, P.Eng. Quality control checks were undertaken on the sampling and analytical procedures, and on the assay results. All of the resources were modeled using an approximate 0.30 g/t Au grade shell solid for each mineralized zone, except Kerekounda and Kourouloulou which were created with a 1 g/t gold grade shell. Variogram models were created for all of the grade shell solids. Assay data from each grade shell was evaluated and appropriately capped for the purposes of this estimation. Block models were created for each of the grade shells and subsequently constrained at depth and laterally by an optimized Whittle shell based on the following parameters; USD$1,300/oz Au, combined ore mining and processing costs of USD$12.75/tonne, overall pit slope of 45 degrees, metallurgical recovery of 95% and appropriate dilution, offsite costs and royalties.
The reader is cautioned that SRK utilizes results from the conceptual pit optimization work solely for the purpose of reporting mineral resources that have “reasonable prospects” for economic extraction by an open pit and do not represent mineral reserves. Indicated and inferred resource tonnage, gold grade and gold content within the optimized pit shell were reported at a 0.37 g/t gold cut off grade. Resource tonnage, gold grade and gold content tabulated from contiguous portions of the mineralization outside of the optimized pit shell, and potentially amenable to underground mining methods, were reported at a 1.0 g/t Au cut off grade.
In the opinion of SRK, the block model resource estimates reported by SRK herein are a reasonable representation of the gold mineral resources found in the Golouma West, Golouma South, Kerekounda, Kourouloulou and Masato deposits at the current level of sampling. Mineral resources for these deposits are reported in accordance with the guidelines of the Canadian Securities Administrators National Instrument 43-101, and have been estimated in conformity with generally accepted CIM “Estimation and Mineral Resource and Mineral Reserve Best Practices” guidelines. Mineral resources are not mineral reserves and do not have demonstrated economic viability. The resource estimate was completed by Wayne Barnett, Pr.Sci.Nat.(#400237/04), an independent qualified person as this term is defined in National Instrument 43-101.
Additional Mineral Potential (Golouma, Masato and Kerekounda only)
As demonstrated by the recent deep drilling results, significant upside potential exists within and surrounding many of the OJVG gold deposits as many of the deposits remain open to depth and in some cases along strike. OJVG’s recent focus has been to expand the resources down dip of the known deposits by conducting wide spaced, deep drilling in order to delineate the down dip extensions of mineralization extending from the known deposits. OJVG will continue this program of wide spaced step out drilling concurrent with follow up drilling at a number of the recent discoveries. Since January 2011, the OJVG has made three new gold discoveries (Saboraya, Kourouloulou South, 950 Zone) in addition to their nine deposits and two previously identified gold targets at Kinemba and Koutouniokolla.
At the OJVG’s three largest deposits, the current 0.3 g/t gold grade shell solids extend to an average depth of only 350 metres below surface. To date, the Golouma (Golouma West and Golouma South), Kerekounda and Masato deposits have now been successfully intersected at depths of 900 metres, 560 metres, 490 metres and 565 metres respectively, and all remain open to depth. (See attached representation of the Golouma Deposit-South deep drilling results to date). Although insufficient drilling has been conducted to allow classification of this mineral potential as a resource, the OJVG has targeted these contiguous extensions to the known deposits with their current drill program and estimated the potential quantity of gold mineralization beneath the current resource estimates. These deeper potential zones of mineralization have been defined by extending the known dimensions of the 1.0 g/t gold resource grade shell solids down dip to a minimum of 675 metres and a maximum of 1000 metres below surface. It should be recognized that the zones listed have been intersected by multiple drill holes, are areas where current knowledge of mineralization is sufficient to indicate that these zones are economically viable, and only represent the down dip potential of the listed deposits. The table below lists the potential of each of these zones. There are numerous additional targets within the OJVG Gold Project, including the recent discoveries, that are not included in the list below.
Additional Mineral Potential at Golouma, Kerekounda and Ma
Deposit Tonnage Range Grade Range Au (g/t)
Golouma 12,000 to 24,03 to 5
Kerekoun2,000 to 3,5005 to 6
Masato 10,000 to 20,01 to 1.5
The approximate tonnages and grades listed have been derived by the following procedure; the volume of each potential mineral deposit has been derived by extending the known 0.3 g/t gold, three-dimensional grade shells for the Golouma West, Golouma South, Kerekounda and Masato deposits directly down dip to a 1,000-metre depth and calculating the volume of each new solid down to depths of both 675 metres (representing the minimum target tonnage) and 1,000 metres (representing the maximum target tonnage) below surface.
the range in tonnage of the mineralized material to the 675 metre and 1000 metre depths was calculated by multiplying the volume of each new solid by the mean average density (Specific Gravity = 2.82) of the unoxidized ore bodies immediately up dip. The resulting tonnage for each new solid was reduced by a factor to account for the higher gold grade core amenable to underground mining. This factor was determined from the ratio of tonnage of the >1.0 g/t gold to >0.3 g/t gold blocks in the corresponding resource block models immediately up dip of the new solid.
grade ranges have been derived by using the average inferred resource grade for each corresponding up dip resource as a minimum grade and the average open pit reserve grade contained within the corresponding reserve block immediately up dip of the new solids as the maximum grade.
These tonnages or grade ranges should not be construed as true minimums or maximums, only a reasonable means to establish the range of estimates of potential tonnages and grades for future drill targets.
The resulting potential ranges of quantities and grades listed above are conceptual in nature having been based on geologic knowledge, interpretation and wire-framing. There has been insufficient exploration to define a mineral resource and it is uncertain if further exploration will result in any of the targeted areas being delineated as a mineral resource. OJVG currently plans to focus on further exploration drilling within these potential mineral deposits during 2011 and beyond.
Exploration Drilling Update
OJVG has completed a number of drill holes designed to test the down dip potential beneath the resource shells at the Golouma, Kerekounda and Masato deposits. Both recentand previous announced drill results from this deep drilling exploration program confirm that gold mineralization extends well below the current resource shells at all of these deposits. Highlights are listed below with more detailed results provided in the attached appendix:
Drill From – To IntervalGold Grade
Hole (m) (m) (g/t)
DH-969 569-575 6 81.83
incl.573-574 1 481
DH-970 589-595 6 32.05
incl.590-592 2 87.32
incl.590-591 1 146.8
DH-971 631-642 11 4.81
DH-956 489-491 2 10.3
DH-967 335-348 13 2.4
incl.335-340 5 3.99
While carrying out OJVG’s deep drilling program targeting mineralization below the current resource shells, a new zone was intersected with the westernmost hole (DH-971) at Golouma. This new, apparently sub-parallel zone, referred to as the Golouma West Extension, returned values of 421.4 g/t gold over a three metre interval from 294 to 297 metres in hole DH-971.
Recent drilling has also focused on lateral and depth expansion at the Kinemba discovery, a Masato-style bulk tonnage deposit that is potentially amenable to heap leach processing. To date, wide-spaced drilling has extended the mineralization over a minimum strike length of 550 metres to an average depth of 120 metres and the mineralization remains open. Recent results include 2.16 g/t gold over 14 metres in hole RC-868 and 1.41 g/t gold over 14 metres in hole RC-871. Details for these holes along with three previously reported holes are set out in the attached appendix.
Building Value
Since the 2010 Feasibility Study, there have been two major enhancements to the project’s NPV. In July 2010, the OJVG Feasibility Study defined a NPV of $361 million using $1,200/ounce gold and a 3% discount rate. Since that study, the OJVG has completed optimization studies on the plant design and more recently the heap leach potential of four deposits and waste material not included in the 2010 Feasibility Study economics. The table below summarizes the additive impact these enhancements have on the overall project value.
Average Annual Life of Mine Production
Average Annual Product (9 years)
1st 3 years NPV @ 3% Pre-Tax
$1,200 gold IRR
2010 Feasibilit 174,000 oz Au 144,000 oz Au $361 M 36%
2010 Optimization Study
7,000 oz Au 7,000 oz Au $40 M N/A
2011 Heap Leach PEA Study
36,000 oz Au 26,300 oz Au $60 M 28%
In addition to the foregoing the following all represent examples of potential to build additional value:
The increase of indicated ounces of gold at the Golouma Style Deposits by 157,000 ounces or 13%;
The identification of additional mineral potential at depth at both the Golouma Style Deposits and the Masato deposits;
The identification of 10.6M tonnes grading 2.1g/t gold of indicated resource at Masato below 2010 reserve pit representing new underground mining target;
Continuing high-grade results at Golouma including:81.83 g/t gold over six metres, 32.05 g/t gold over six metres and 421.4 g/t gold over three metres;
The identification of multiple veins (for example in holes DH-966, DH-969 and DH-971) provides an opportunity for significant flexibility to optimize the mine plan;
Heap Leach potential of the GoloumaStyle deposits remains to be evaluated; Expansion of the Kinemba deposit over a minimum strike length of 550 metres to an average depth of 120 metres and remains open; The Heap Leach potential of all Masato Style Deposits remains open to expansion.
Qualified Persons
A NI 43-101 compliant Technical Report describing the resource updates and PEA findings will be filed on the Company’s website and on SEDAR within 45 days. Doug Turnbull, P. Geo., is a qualified person for the purposes of National Instrument 43-101, and has reviewed and verified the exploration data disclosed in this news release. William Bond, P. Geo., is also a qualified person for the purposes of National Instrument 43-101, and has supervised geologic field procedures. TSL Laboratories in Saskatoon carried out all assaying under industry-standard QA/QC procedures.
Heap Leach Drilling
Drill From – To Interval Gold Grade
Hole (m) (m) (g/t)
RC-868 101-115 14 2.16
incl.108-114 6 3.26
RC-870 89-102 13 1.32
Incl.93-101 8 1.98
Incl.94-96 2 3.95
RC-871 18-Sep 9 0.51
86-91 5 1.61
100-114 14 1.41
Incl.107-113 6 2.69
RC-876 0-8 8 1.32
Incl.0-5 5 1.87
RC-877 99-111 12 0.99
Incl.99-105 6 1.22
RC-878 31-34 3 1.76
39-41 2 1.36
72-81 9 0.8
Incl.73-75 2 1.98
102-111 9 0.96
Incl.102-104 2 1.91
DH-795* 46-51 5 1.92
DH-803* 35-41 6 1.07
141-151 10 2.4
DH-810* 16-21 5 1.73
42-49 7 1.64
*Previously reported.
Mineralized intervals are based on 1-metre samples
utilizing 0.2 g/t gold cut-off levels with a
maximum internal dilution of 2 metres. The
attitude of mineralized intervals varies and
reported mineralized intersections may not represent
true widths.
UNDERGROUND DRILLING
Drill From – To Interval Gold Grade
Hole (m) (m) (g/t)
DH-961 430-437 7 4.2
incl.430-432 2 8.59
DH-966 397-400 3 7.18
423-433 10 5.3
incl.423-425 2 13.21
and 428-430 2 9.5
DH-969 488-492 4 7.37
incl.490-491 1 24.28
569-575 6 81.83
incl.573-574 1 481
DH-970 589-595 6 32.05
incl.590-592 2 87.32
incl.590-591 1 146.8
DH-971 294-297 3 421.4
434-438 4 3.42
631-642 11 4.81
incl.633-640 7 6.03
DH-950* 576-578 2 46.75
716-721 5 1.51
DH-964 387-393 6 2.52
401-405 4 2.66
428-433 5 2.77
DH-967 335-348 13 2.4
incl.335-340 5 3.99
DH-956* 489-491 2 10.3
*Previously reported.
Mineralized intervals are based on 1-metre samples
We seek Safe Harbor.
Love to see a breakdown of this report…Are we finally seeing some lead up to the big report???
I read, but I still am missing what they boosted the oz’s to? Any number out tHere I am missing?
I don’t see any new number… What do you guess for tomorrow… Gap up, go down or flat???
“Additionally, we are working jointly with our equal partner, Bendon International, to examine development, financing and strategic alternatives to maximize value from our collective 87% interest in what we both see as one of West Africa’s next gold mines.”
cs—Are you possibly interpreting “strategic alternatives” as they may be considering a restructuring of ownership ?????
I thought that statement was a bit confusing too…
What you guys don’t realize is that all Oromin press releases are not in English but rather a new language called Orominspeak. Orominspeak is a dialect of English which obfuscates and confuses anything having to do with Oromin or it’s partnership with Bendon.
For example, the above quote posted by CS translated into English is “The 87% the Senegal project owned by our close partners, Bendon International, and ourselves is for now for sale”
Regarding the rest of the release, my amateur attempt at translation gives about 4.5 million ounces of indicated resources. Great but disappointing to me since I was expecting 5 million.
Where are the Golouma West underground resources after those fabulous drill results last year? Only 82,000 additional ounces indicated for Golouma West & South – I’m totally shocked after 1 year of drilling!
Hopefully Google will come out with an Orominspeak to English translator so that we long suffering shareholders do not have to spend so much time trying to figure out what the hell they are saying!
Well said Socal…. especially the part where “Oromin is Now For Sale”…
dont know how the market is going to respond today… no one can translate the Report, therefore it may do nothoing till next week perhaps…. or maybe since this thing is really traded very thinly already, and only Brokers and A few Gold Bugs buying , since they can translate it …. maybe we get some buying…. but I would guess Flat today.
Better than a sell off ( i guess) but who really knows?
OROMINS NEW PARTNER ?
Iamgold not ruling out acquisitions, will stick to gold
By: Liezel Hill
12th May 2011
Updated 3 hours agoTEXT SIZE TORONTO (miningweekly.com) – Gold miner Iamgold is looking to spend its growing cash reserves on brownfields expansions and developments around its existing mines, but that does not mean the company is not in the market for acquisitions, CEO Steve Letwin said on Thursday.
“We are not going to rule out acquisitions, but it just means that we are not dependent on them,” he told analysts on a conference call.
Areas of interest include West Africa, Suriname and Canada, as well as Colombia, Letwin said.
Iamgold is benefiting from a combination of rising production and surging gold prices, and expects to have a cash position of around $1,1-billion by the end of July, after closing the sale of minority interests in two Ghanaian mines to partner Gold Fields.
The group, which has operations in Burkina Faso, Suriname, Canada, Botswana and Mali, will probably look at acquisitions in the range of $300-million to $500-million, and will focus on earlier-stage exploration and development assets with the potential for low costs, Letwin said.
He made it clear, though, that Iamgold will be looking at gold assets, rather than anything else.
The world’s biggest gold producer, Barrick Gold, surprised the market last month with an agreement to buy Equinox Minerals, a copper miner, for C$7,3-billion, sparking a debate over whether gold miners risk diluting their so-called gold premium by adding base-metal production.
Letwin said that Iamgold continues to view West Africa and Suriname as core regions, but added that he would also be “keen” on another Canadian investment.
Iamgold already building a new gold mine in Canada, with its new Westwood project in Quebec scheduled to start up in 2013. The firm also own the Niobec niobium mine, although it is looking at spinning out the asset.
In Latin America, Letwin said he is still working behind the scenes to resurrect the firm’s Camp Caiman project, in French Guiana, which was put on hold after the French government refused to issue a permit.
He also indicated that the company would be interested in getting a foothold in Colombia.
“I would like to see whether or not there might be some opportunities for us, I think it’s a country that really serves up the kind of geography and resources that we can take advantage of.”
The company would want to buy assets with the potential for yearly production of more than 150 000 oz/y.
In terms of its existing assets, Iamgold is already studying an expansion at the new Essakane mine, in Burkina Faso, which achieved commercial production in 2010, and is planning expansions at and around the Rosebel operation in Suriname.
The company, together with partner AngloGold Ashanti, has been studying a project to develop deep sulphide resources at their Sadiola mine in Mali, and Iamgold COO Gord Stothart said he expects a construction decision on the project before the end of the year.
If all goes to plan, first production from the Sadiola deeps project should be achieved in 2013, Stothart said.
NIOBEC
Iamgold is working to spin out the Niobec mine “as quickly as we can”, and has received strong interest in the asset, Letwin said.
The company first indicated it was looking at options for Niobec in mid-January, as part of a strategic plan that included looking for buyers for its minority interests in Ghana.
Niobium is used in high quality specialty steels and the Niobec mine is expected to produce between 4,5-million and five-million kilograms this year.
“We’re on a very, very quick path to realise the monetisation of that asset in the next couple of months,” Letwin said.
“And we’re going to quickly see whether, by separating it out and giving it the kind of commercial focus that it needs and should have been getting, it’s going to create a lot more value for our shareholders.”
The company recently completed a preliminary economic assessment on expanding the Niobec operation, and unveiled a big increase in measured and indicated resources.
Edited by: Creamer Media Reporter
Topics in this article
City Company Continent Country
Toronto Barrick Gold
Equinox Minerals
Iamgold Latin America Botswana
Burkina Faso
Canada
Colombia
French Guiana
Ghana
Mali
Suriname
Currency Facility Industry Term Person
CAD
USD Essakane Mine
Niobec Mine
Sadiola Mine Base-metal Production
Copper Miner
Gold Miners
Gold Producer Gord Stothart
Steve Letwin
Province Or State Region
Quebec West Africa
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Chet mentioned they were talking to Bendon to use their combined 87% stake to examine development, financing and strategic alternatives to maximize value. I have been in this stock for years and have never heard Chet say he is talking to anyone. The company would obviosly be a lot easier to value if one entity controlled 87%. To me this is just as important as the vague ounce count. Any comments?
Tony
After being in this stock since the .20 days, I am rather disgusted with their vague NR, it’s almost like they are not interested in promotion of any sort. The only worst job they could have done was releasing them today, at least then we probably would have ended green for the day, my patience is running thin with these idiots!
New here, haven’t actually bought any shares but started paying attention because caliches’ posts got me to take a closer look at NES in the $1.20’s. I understand (maybe incorrectly) that Bob Sibthorpe is on the board of this one and have been led to beleive from trustworthy sources that he is a “straight shooter”. That being said, there seems to be allot of frustrated shareholders out there. My question is this: Why the disinterest from the market with ole? Is it the depth of these deposits? Management in regards to promotional abilities or general ineptitude? What needs to fall into place here and why has that not happened as of yet?
Thanks in advance to anyone who can clarify this story for me.
ps. If you can keep the answers simple that would be greatly appreciated as I am not a geologist and have little market experience.
Does anyone know how much cash OLE has left? Does anyone know what their burn rate is per month, etc…? Does anyone think they will raise and dilute yet again? In the March, 11 2011 presentation it says that the had $18 mil.
Thanks
Tony
OROMIN EXPLORATIONS LTD. – BUY @ $3.25- !!
This is a Great Report.And this is with No Mention of the Bendon Re Structuring.
OLE – TSX $1.15
PROJ. RETURN: 183%
VALUATION: 1.0x NAVPS
Share Data
Basic Shares O/S (mm) 122.3
Fully Diluted 132.5
Market Cap ($mm) 140.6
NAVPS 3.28
Dividend $0.00
Yield 0.0%
Next Reporting Date August-2011
TARGET: $3.25 (FROM $2.89)
$0
$1
$2
May -10 Sep-10 Jan-11 May -11
Short-term Technical Target
$1.50, next major resistance level. OLE is
bullish in the short-term.
Corporate Profile
Oromin Explorations Ltd. is a junior
exploration company listed on the Toronto
Stock Exchange focused on Au exploration in
Western Africa. Currently, Oromin is
developing the OJVG project that contains
3.45 million gold ounces, of which they own
43.5% in the Sabodala district in Eastern
Senegal.
Upcoming Events
Ongoing drill results from current
exploration program.
Good Resource Growth – More to Come
EVENT – Release of an Updated Resource for OJVG
The Oromin Joint Venture Group (43.5% Oromin Exploration – OLE) released an
updated resource for its gold project in Senegal. Along with a prior press release on
May 5, 2011, the total resource so far identified on the property amounts to 3.8 mm
ounces of gold, up from a prior resource estimate of 3.5 mm ounces in September
2010. However, the two resource estimates are not directly comparable since not all
resources in the September estimate were constrained by economic assumptions.
IMPACT – Positive. Higher Quality Resources and Still Open
Resources remain open for material expansion, particularly to depth: Resources are
split into two styles – a high-grade Golouma type and lower-grade, more oxidized
Masato type. Both types are open to depth, but the Golouma resources are much
higher grade. Intercepts of deep Golouma mineralization drilled below the resource
have assayed 81.8 g/t over 6 metres and 421.4 g/t over three metres – two
spectacular intercepts. However, the average of the holes drilled (capping high
grades at 32 g/t) is more like 16.0 g/t over 5.6 metres, still good grade over very
mineable widths. We judge there is a high probability that substantial, higher grade
resources will be added at depth. To reflect this potential, we upgraded the value for
exploration potential to 5.5 mm ounces from 4.5 mm ounces, causing the NAV of
OLE to increase to $3.07 from $2.89 previously.
Enhanced economic potential of resources: The press release also included results
of optimizing the 2010 Feasibility study and included the results of a Preliminary
Economic Assessment of “heap-leach” material. At $1,200 gold price and a 3% DCF,
project economics were enhanced by $100 million to $461 million, a 27% increase in
value. The addition of a heap-leach operation in our financial model increased the
NAVPS of OLE by $0.21, bring the NAVPS to $3.28.
Better quality resource estimate: All resources in the current estimate of 3.8 mm
ounces have been constrained by economic assumptions, and the resource
incorporates data from ~128 additional drill holes – meaning the “quality” in
confidence in resource is much better.
ACTION – We See Value. Remain a BUY, with a Higher Target
Due to higher underlying value, we are raising our target price to $3.25 from $2.89
per share.
Production FYE Dec 31 Q1/10A Q2/10A Q3/10A Q4/10A 2010A Q1/11A Q2/11E Q3/11E Q4/11E 2011E 2012E
Production 000 Au oz n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Cash Costs US$/oz n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
Earnings & Cash Flow Q1/10A Q2/10A Q3/10A Q4/10A 2010A Q1/11A Q2/11E Q3/11E Q4/11E 2011E 2012E
EPS $/sh n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
P/EPS multiple n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
CFPS $/sh n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
P/CFPS multiple n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a n/a
John McClintock 416.860.7613, jmcclintock@mackieresearch.com
This report has been created by Analysts that are employed by Mackie Research Capital Corporation, a Canadian Investment Dealer. For further disclosures, please see last page of this report.
MAY 16, 2011
http://www.mackieresearch.com The MORNING CALL – OROMIN EXPLORATIONS LTD. Page 2
RISKS TO TARGET
The greatest potential risks associated with an investment in Oromin are changes in the underlying commodity prices and the
geological risk of variability and reconciliation of actual mined material to reserve and resource estimates. Additional risks are
Oromin’s ability to raise capital to continue to finance exploration, for general administration and ultimately development of the
OJVG.
RELEVANT DISCLOSURES APPLICABLE TO: OROMIN EXPLORATIONS LTD.
1. Within the last 3 years, Mackie Research Capital Corporation has managed or co-managed an offering of securities by t
Yep, interest in this POS is is really heating up, 46k traded today, great job Chet
Thanks for the report Goldfather. Hope you are doing well. Lets hope this raises more attention to our seriously undervalued stock.
Tony
Maya, you seem to be pretty accurate as far as your predictions about OLE. How do you feel about the last update and do you see any significant developments in the near future?
Thanks
Tony
Here comes our dollar, so sick. So when do we go up, and what’s the catalyst? Something dreadfully wrong here
tony—–No one has yet responded to your 5/16 question re cash on hand and burn rate so I will give you my OPINION…Approx cash 15 million with a burn rate of 1.5 million/month…If I am close to correct , I see no need for additional financing until late 2011….(Maybe by then there will be some concrete offers for a buyout with no additional dillution )
Question for Caliche and or anyone who can explain. Read this article and the question will be at the end.
Here is an interesting article I found in The Gold Watcher blogspot.
Friday, February 4, 2011Oromin Expolorations: A Good Company, But..
Oromin Explorations is fairly advanced along the exploration chain. Its flagship project, the OJVG, has received a positive feasibility study last July. This study is the last step required before a mine can go into production, financing permitting. It plans out a future mine and assesses what has to be done, and what the costs are to get the mine up and running. An economic assessment is part of it; it comes after the preliminary economic assessment and pre-feasibility study.
The feasibility study for OJVG, located in Senegal, projects a positive net present value of $182 million for $1,000 gold. At $1,200 gold, the NPV is $361 million. The latter price is more realistic. Unfortunately, the present market cap of Orimin at its current price of $1.18 is $159.365 million. The NPV isn’t that much higher than the present market cap.
In the release of the feasibility study, it was explained why the NPV was so low relative to the stock price: it has to do with the fact that OJVG has 3.3 million ounces of indicated resources but only 1.42 million ounces of probable reserves. Normally, the gap between the two numbers is much lower. [When a pre-feasibility or feasibility study is conducted, indicated resources get reclassified as probable reserves. There’s normally a little shrinkage in the classification, as reserves have to take into account more stringent criteria for economic feasibility.] Only part of the resources were reclassified because the company had to jump ahead in order to get a mining license from the government of Senegal.
Still, even with that factor considered, there isn’t a huge gap between the potential NPV and the current market cap.
One thing that Oromin has going for it that few juniors do, is major producers as minority owners. Large chunks of Oromin are owned by IAMGOLD and Mineral Deposits. That bespeaks confidence in the company’s flagship project. It also bespeaks takeover potential. Sprott has a chunk of it too.
Unfortunately for Oromin, it might need a tender offer to get its project off the ground. The estimated capital costs to get the 1.42 million ounce project up and running are $291.5 million. In order for the company to finance the project as it is through a private-placement equity offering, it would have to triple its total shares outstanding. That would make the estimated NPV per share not much more than the current price. As it stands, it’s going to have to dilute some to make for a complete feasibility study which’ll take some more time. If it decides to go ahead with what it has, and expand the feasibility study concurrent with developing the part that’s covered by the extent feasibility study, then it will need a lot of hard-to-find capital – about $300 million worth. Almost certainly, an expanded feasibility study will include an expanded initial capital cost.
A company like this, given the high capital cost, actually makes more sense as a takeover candidate. Any takeover would be at a premium, but it’s far from a triple given the figures. Oromin is a good company, and a plausible takeover candidate, but…
The Moral Of The Story: Some otherwise big and exciting projects only make economic sense as takeover candidates. That’s the case when the capital costs are huge and dwarf the market cap of the company owning them. A back-of-the-envelope analysis of Orimin says that it’s one of those companies. It had a big deposit, but not an economically great one. A major producer like IAMGOLD would likely find it accretive to earnings, but only a major could field the capital without major inconvenience. Takeovers are exciting, but they also take out the company. If IAMGOLD announces a tender offer at (say) $1.60, that’s only 36% gain from today’s price. A good profit, but this company would have to get really lucky for it to be a double. Also: IAMGOLD’s part ownership makes Oromin a plausible takeover candidate, but that’s far from being a guarantee…including of timing.
Disclosure: None – I don’t own a single share.
Posted by Daniel M. Ryan at 3:07
My question is when will the gap between the then indicated reserves of 3.3 mil and the probable reserves of 1.42 mil close? This guy seems to think it is important. What does OLE have to do to make their indicated reserves into probable reserves? I am all confused with these two terms and the importance of them in valuing the company.
All comments welcome.
Thanks
Tony
Were all screwed by the sound of it, Arlene you are noticably quiet……quietly disposing of your holdings no doubt. I capitulate today and will be moving on shortly, Chet is $ucked out in this one… GL all
tony—-Since “all comments welcome” , mine are as follows——-Article was BEFORE the PEA 5/5 and BEFORE Resource Update 5/12……..Situation maybe/probably has changed since then…Your questions are difficult , but if anyone here can answer them , Caliche is “the man” …Perhaps you should also try to contact Daniel M Ryan to see what he has to say since there is more info now available…..
Dale8——If and When I dispose of my Ole holdings , it will not be quietly……It is not my intention/plan to answer every basher on this site….Good Luck to you , Arlene2
Dale8,
remember this is just a “blog” written by Daniel M. Ryan.
You or I could write anything on any topic (it is very simple to start a blog) and it needs to be “taken with a grain of salt”.
I do find his article interesting….
I think we are caught between Daniel who wants to buy at 80 cents and Mackie that wants to sell at $2.25….
crazy world….
I’m as far from a basher as you’ll ever find, just 6 years of mostly high hopes, and now dashed. Good luck to you all, I’ll keep a small position for old times sake and hope it pays off, core position gone tomorrow at 1.04 for any interested buyers……….any?
I sold the vast majority of my holdings several months ago for around $1.25. I did not want to hold on for this news release. I don’t think this companies share price has ever increased dramtically after a news release (at least not the last two years). This one was no different.
Dale:
I am wiring some funds in to my acct tomorrow to pick up some more shares. I am not sure how much you have as a “core” holding, but I plan on buying and additional 100-200K shares Thus-Friday. If you want to wait a day, I would be happy to take you out of a couple hundred thousand shares… Let me know…
G1
Listen everyone – This latest report means nothing. ABSOLUTELY NOTHING. The CFO does not even know how to read the darned report and get anything out of it. It reported nothing whatsoever other than what everyone already knew. We are all waiting for the June report and this will be the tell tale report of which direction OLE is headed.
I for one am buying more tomorrow and more on Thursday and more on Friday and more all next week if the prices stay down like they are….. The problems we are seeing appear to be in house (YES, In House), Look at the trades? They are small and as usual with Chet and the team – DRIVEN DOWNWARD….Guess what comes next???? Cash Infusion!
I will bet with anyone, there will be an announcement any day now there is a new buyer of cheap stocks ………… Now, If I was the last Cash Cow at 1.30 per Share – I would be going nuts about now!!!
Let’s see if I am right!!!!!
Chet needs to face his Investors………I am going to promote that the Company has a WebCast in which all investors can take part in. We can ask questions of teh board (CHET) for them to answer, in todays internet society it is a simple task to complete and I feel it is not a lot to ask for either considering the direction of the stock as of late….
As a group we all need to push for this to happen – Make a call to the company and demand a WebCast meeting for all investors to take place – Let them know that we need to see Chet explain the plan of action in person, not thru a press release!!!
This Company could be Now Purchased for approx $150 mil (the Publ;ic Sector), and then deal w/ the Saudis. For about a Buck $1 ps, some one/Firm could conceivably control the entire Project and the 10 mil ++Oz of Gold….. I wonder what IAG and MDL think about that possibility. From where i sit, looks like Ole is awfully Vulnerable…. but what do we REALLY know anymore.
1for2stock split mostly done, 2ole for 1 nes
Good for you, Dale8. Now would you mind allowing the investors to return to positive investing and feedback?
I am struggling with the positive referance. Being a share holder for 6 years places me in this “investment” long before most of you ever heard of this. I would have loved to hold onto all my shares, but financially it made better sense to pour it into NES. I love the drilling results and property, I just can’t see something in this picture for whatever reason, I still kept 8 k shares in case some unseen event takes place, which I hope it does for everybodys sake, GL
Dale—–Both NES and OLE are good investments……Happy for you that you did keep some OLE as I do strongly believe OLE’s share price will increase significantly more than NES share price over the next six months…..Best Wishes , Arlene2
Damned – Who would have thought this would have turned out to be another day in the many past days of down again………..
I have not seen anyone respond to my idea of overwhelming OLE offices with the request to do an online board meeting to explain what is happening here???? That tells me that nobody really truly does care???
DW, what will be in the June “tell tale” report that was not already provided in the past update?
Thanks
Tony
Dale…. i think its a great Idea….. lets do it… but as you mentioned…. not many of us left to make the call…..please try to organize…. outside of the Comment about Bendon in the NR…. theres not too much to get excited about….. and the sp shows it. Thats Proof.
Call the offices and get them to get a web based conference call going – We will all get the same scoop instead of all guessing at what is going on and passing tid bits of information……
We need real answers from real people with real questions!!!
Just sent this to D. Scott
Mr. Scott,
As a shareholder of OLE I would like to hear and take part in a web-based Conference call.
I am very concerned about my investment in OLE and cannot understand why the price continues to tank and why management does not seem interested in seeing it rise.
Please get back to me with a plan to implement such a call
feel free to copy and paste or improve upon my offering
just got a reply from D. Scott,
says he will contact me tomorrow….
topoftheridge::::
THANK YOU 🙂
Well, that makes 2 of us . Comon’ folks, please make your pleas to OLE – Let us know you did so we can collectively be a power.
THANK YOU “TOPOFTHERIDGE”
DW
Somebody just bought 650,000 shares at $1.00 and another 165,000 shares t $1.00 on the Can Side………….U.S. side had a 600, 2000 and a 1500 trade.
Sounds like someone has an idea that OLE is moving somewhere with a trade of 650,000 shares. Still trying to figure out why my buy trades have not been executed today????????
DW
650K, but the stock is down to .95…
goldn1—–Were you a part of that 900,000 plus shares purchased today ??
Volume for OLEPF now exceeds 3 times the most recent 10 day average…..
Arlene, I am buying today, but I am based in the US and account for most of the volume on the US side. Have another wire hitting tomorrow so I will be buying more than. Oromin has been doing a lot of Thursday PR’s, so I hope they hold off day or so before they announce something good…
I agree with your opinion that OLE has a lot more upside than NES at this point. I loved NES at .40, but have a hard time buying more at over 2 bucks…
G1
In regards to the webcast/conference call, I am not sure if you will ever be able to get Chet to do what we all want him to do, but he definitely, in my opinion, not done what is in the best interest of the shareholders.
While he maintains the his focus is on drilling and not the share price, that would be fine for a private company, but this type of attitude is not in the best interest of the shareholders of a public company.
With Oromin’s market value has always been artificially low, every time Chet goes out to raise money, he is selling shares for a fraction of what the company is worth, diluting the stock and reducing the value to us real investors who actually PAY for the shares. It is easy for Grandich and Chet to sit back and not care as Chet will continue to issue himself more free shares. He always makes sure he is taken care of, but he screws the people that invests in his projects. I am in on Oromin and hope to get a good return from here, but I will never invest into one of his companies again…
Just my thoughts…
G1
Arlene, I purchased on the Canadian side and the US side today……..$1.00 or less, one has to think there is something going to happen with that…… I also have a bunch more for Friday buy that did not get executed today ??????
This stock is a buy right now, I am waiting for the announcement that they have just had another major cash infusion. That will just throw this stock into a spiral.
I do not believe that we cannot force Chet’s hand on a WebCast – well if nobody asks for it then you are exactly right that it will not happen. If you do not ask, then do not expect it to happen.
Topoftheridge – Did you get a response from Dave Scott ??????
dw
He did email me and told me to give him a call, I was too busy.
I will try to call him tomorrow