Oroco rallies on revised PEA at Santo Tomas Mexico
Oroco Resources Corp. [OCO-TSXV, ORRCF-OTC] has announced a revised preliminary economic assessment (PEA) and updated mineral resource estimate (MRE) for the North and South zones at its Santo Tomas copper-molybdenum-gold project in northwest Mexico.
The PEA is based on a staged open pit mine and processing plant achieving 60,000 tonnes per day production in year one and expanding to 120,000 tonnes per day in year eight over a 22.6-year mine life.
“Production is preceded by two years of construction and one concurrent year of pre-stripping,’’ the company said in a press release.
“When we completed the initial PEA in December 2023 it was clear there was additional value to be unlocked at Santo Tomas,’’ said Oroco CEO Richard Lock. “Upon careful analysis, a staged approach to the mine expansion and a focus on exploiting the higher-grade near surface material in the early years of mining has unlocked a considerable increase in value,’’ he said.
“We have established a plan that invokes a very efficient use of capital and establishes a rapid post-tax payback of 3.8 years. The plan starts with the use of smaller equipment to provide rapid entry to the mineralized material and maintains a higher-grade feed profile to delay the requirement of an expansion until year eight.” Lock went on to say that copper equivalent production(CuEq) in the first seven years is forecast at 1.34 billion pounds at a mill feed average grade of 0.51% CuEq.
The initial capital cost is estimated at US$1.1 billion, with sustaining and expansion capital costs pegged at US$1,73 billion. Total life-of-mine payable copper production is expected to reach 4.7 billion pounds.
Oroco shares advanced on the news, rising 10% or $0.035 to 38.5 cents. The shares currently trade in a 52-week range of 74 cents and 32 cents.
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 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 pit (sulphide) is estimated to contain 540.6 million tonnes of 0.37% CuEq or 4.46 billion pounds of CuEq. According to the updated MRE, the South Zone pit (oxide) contains an inferred resource of 530.3 million tonnes of 0.35% CuEq or 4.05 billion pounds of CuEq.
The mine production plan contains 825.5 million tonnes of mineralized sulphide material with an average grade of 0.37% CuEq and 1.13 billion tonnes of waste material (including mineralized oxide), resulting in a strip ratio of 1.38 over the life of mine.
Mining operations will be carried out on a 24-hour per day, 365 days per week schedule. The project has a total life of 23.5 years, which includes one year of pre-stripping and one final year of stockpile rehandling to the mill.