Orea Mining up 28% on French Guiana gold mine ruling
Orea Mining Corp. [OREA-TSX; OREAF-OTCQX; 3CG-FSE] shares rallied sharply in active trading Thursday December 31 after the company said a court has ordered the French government to renew its Montagne d’Or mining concessions within six months.
Montagne d’Or, located in French Guiana, South America, is a permitting-stage open pit gold mining project that hosts proven reserves of 8.25 million tonnes at 1.99 g/t (530,000 ounces gold gold) and probable reserves of 45.87 million tonnes at 1.50 g/t (2.2 million ounces of gold).
A 2017 bankable feasibility study envisions average annual gold production of 237,000 ounces over the first 10 years of mine life at an average grade of 1.73 g/t gold and all-in-sustaining cost of US$749 an ounce.
Orea shares advanced on the news, rising 28.6% or $0.04 to 18 cents on volume of almost 1.5 million. The shares are currently trading in a 52-week range of 24.5 cents and $0.085, leaving the company with a market cap of $35.2 million based on 187.2 million shares outstanding.
The Montagne d’Or joint venture, owned 44.99% by Orea and 55.01% by United Kingdom-based Nord Gold SE [NORD-LSE] submitted renewal applications for a 25-year period for two core mining concessions in December, 2016.
In the absence of a timely decision from the Minister of Economy in charge of the mines, and in order to protect its rights, the joint venture filed proceedings in February and March 2019 in the Administrative Court of Cayenne in French Guiana to invalidate any implicit refusal as a result of the French government having failed to respond within the legal deadline and to order the State to extend mining concessions for a period of 25 years and, in the alternative, to reconsider its request for an extension.
Orea said the court rendered its decision on December 24, 2020, and concluded that the implicit refusals were cancelled and ordered the State to extend the mining concessions within a period of six months from the notification of the court judgement.
The Minister of Economy and a non-governmental organisation (NGO) permitted to intervene in the case, will have two months to appeal the decision.
“The court decision is a big win for the joint venture, confirming its rights to the Montagne d’Or concessions,” said Orea President and CEO Rock Lefrancois.