Orefinders gears up for market turn

The Orefinders McGarry Mine, northeast Ontario. Source: Orefinders Resources Inc.

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The Orefinders McGarry Mine, northeast Ontario. Source: Orefinders Resources Inc.

Orefinders Resources Inc. [ORX-TSXV; ORFDF-OTC] said Monday December 31 that it is preparing for a market turn as it continues with a strategy that offers levered exposure to the price of gold, while preparing the company for future mining industry consolidation.

While Orefinders is a gold-focused company, its shareholders recently approved the spin-out of the company’s Ontario silver-cobalt assets into a new company, Power Ore Inc. [PORE-TSXV], which was set up to acquire Orefinders’ past-producing silver-cobalt Mann Mines and MacMurchy properties via a court-approved plan of arrangement.

The properties are located in the Cobalt-Gowganda District of Ontario, and form part of the company’s plan to create a pure play battery metals company.

Companies like Orefinders hope to benefit from predictions that the price of cobalt will be driven higher by future demand from battery manufacturers and the expected growth in the uptake of electric vehicles. BMO Capital Markets, for example, has said a doubling of the cobalt spot price over the coming years is not out of the question.

“The new company will act as an acquisition and development vehicle for Abitibi battery metal projects. Our team is very knowledgeable in the geology of the Gowganda-Cobalt Ontario District and we also have established relationships at the asset ownership level,” Orefinders has said.

The Mann Mines properties host nine historic shafts and a ramp that was driven to the 210-foot level. The former Mann Mine, along with other adjacent prospects, reported produced nearly 500,000 ounces of silver, Orefinders said.

Orefinders said it views the Mann Project as a highly promising advanced development project which is drill ready for future work.

Orefinders currently owns over 5 million shares in Power Ore, which was trading Monday at $0.05 after dropping 9% or $0.005, leaving the company with a market cap of $1.5 million based on roughly 30 million shares outstanding.

On December 12, 2018, Power Ore announced the acquisition of the Opemiska copper mine complex in Quebec. As a significant shareholder in Power Ore, Orefinders said the acquisition of the Opemiska Mine complex is a transformative one, and immediately brings Power Ore to the forefront of the Canadian copper space.

The Opemiska copper mine complex was initially Falconbridge’s flagship copper asset and produced copper from two high-grade underground mines – Springer and Perry – until the 1990s.

On Monday, Orefinders advanced 12.5% or $0.005 to $0.045. The 52-week range is 17 cents and $0.04.

Depending on the cost of capital and the market’s appetite, shareholders could also begin to see development of the company’s assets organically, said Orefinders CEO Stephen Stewart.

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