Oroco Resources closes $6.3 million private placement
Oroco Resources Corp. [OCO-TSXV, ORRCF-OTC] said it has raised $6.3 million from a brokered private placement consisting of 14.05 million units priced at 45 cents each. Proceeds, which include the partial sale of over-allotment options granted to the underwriters, will be used to advance the company’s Santo Tomas copper-molybdenum-gold project in northwest Mexico, where Oroco sees numerous project enhancement opportunities that is planning to pursue in 2024. For example, mineralization has been identified outside the current economic pit shell, the company has said.
Under the terms of the offering, each unit consists of one half of one common share purchase warrant. Each warrant entitles the holder to purchase one common share at an exercise price of 65 cents for two years after closing
Oroco shares advanced on the news, rising 1.2% or $0.005 to 41.5 cents. The shares trade in a 52-week range of 80 cents and 35.5 cents.
News that the financing has closed comes after Oroco recently announced a preliminary economic assessment (PEA) and updated mineral resource estimate for the north and south zones at its Santo Tomas copper-molybdenum-gold project in northwest Mexico.
Oroco holds a 85.5% interest in those central concessions, covering 1,173 hectares of the Santo Tomas project. These are the “Core Concessions.’’ The company also holds an 80% stake in an additional 7,861 hectares of mineral concessions that surround and lie adjacent to the Core Concessions.
The PEA results support a staged open pit mine and processing plant starting at 60,000 tonnes per day the first year of production and expanding to 120,000 tonnes in year two. The PEA envisages a lifespan of 20.1 years.
Total life-of-mine payable copper production is estimated at 4.74 billion pounds.
The initial capital cost is pegged at US$1,34 billion with sustaining and expansion capital estimated at US$,134.5 billion. Oroco is estimating a pre-tax, net present value (8.0%) of US$2.3 billion.
The PEA mineral resource estimate includes two primary mineralized zones: North Zone and South Zone. These zones display similar mineralization styles but are physically separated by localized post-mineralization faults and material currently identified as waste due to a lack of drilling.
The North Zone hosts an indicated resource of 561 million tonnes, containing 4.57 billion pounds of copper equivalent (CuEq). On top of that is inferred resource in the North Zone of 118.3 million tonnes of 848 million pounds of CuEq.
The South Zone is estimated to contain an inferred resource of 430.8 million tonnes of 3.3 billion pounds of CuEq.
The project is located within 160 kilometres of the Pacific deep-water port at Topolobampo, and is serviced via highway and proximal rail (and parallel corridors of truck grid power lines and natural gas) through the city of Los Mochis to the northern city of Choix.