Oroco Blog Update – December 4, 2023
Site Activities and Topolobampo Port Visit
Post PEA-optimization work: In November, the project team convened in Choix to concentrate our limited site work and ongoing project test efforts on the facets of the post-PEA options that offer added value.
The recently published PEA has defined a solid case for the building of a copper mine at Santo Tomás based upon a straightforward truck and shovel operation with conventional flotation recovery of metals and the sale of shipped concentrates. In performing the study, a number of opportunities to enhance the project have been identified, and we have commenced the desktop, benchtop and test-work studies aimed at broadening the scope of potential pathways to improving development capital and cashflow options for project development. These low-cost studies are expected to offer project value opportunities that will enhance development optionality.
Andrew Ware and Jesus Moreno are working on improving our spatial understanding of grindability at Santo Tomás, in part to optimize energy requirements in grinding and in part to improve expectations for the disaggregation of run-of-mine material with a potential sulfide leaching on lower grade chalcopyrite resources currently assigned to waste. Preliminary studies on leachability have commenced, and preliminary results are expected before year-end. We scoped the CAPEX/OPEX costs for an SX/EW facility during the PEA process, but these results were not included in the PEA mine process reported upon. The site team is improving our oxide copper resource evaluation, and has continued work on water sourcing options for the project. The grindability study will require further sample processing in 2024.
Oxide mineralization surface sampling program: The team has commenced a systematic sampling program to detail surface expressions of oxide mineralization.
Figure 2: Surface and historical showing re-sampling to augment the preliminary oxide model for future incorporation in future resource considerations
Figure 3: Rosaura Ocampo (left) and Fidel Gomez (right) in the field for the surface oxide mapping and sampling initiative
Topolobampo Port Visit with Secretary for the Economy, Sinaloa State: CEO Richard Lock, President Ian Graham, and QP Andrew Ware, and Oroco local manager and partner Don Ubaldo Treviso and Ubaldo Treviso Jr. met with the senior leadership of the Port Authority for a bespoke tour of the Port of Topolobampo hosted by Lic. Javier Gaxiola Coppel, Secretary (Minister) of the Economy for the State of Sinaloa. The visit included a presentation on the history of and future plans for the Port, and the facilities available for the handling of the Containerized Bulk Handling (CBH) of mineral concentrates proposed in the PEA.
Figure 4: Proposed Containerized Bulk Handling (CBH) of mineral concentrates as scoped in the PEA
The Port is readily capable of handling Santo Tomás products, and presently handles overflow copper and molybdenum concentrates from SW-US and Sonoran copper production from the Port of Guaymas.
Figure 5: Port of Topolobampo, scenes from our November 2023 visit
Photography by Gov’t of Sinaloa
In addition to discussions regarding the Port, Lic. Gaxiola indicated ongoing support for project development on behalf of the Sinaloa State Government, a determination echoed by Snr O. Juan, the Mining Rep. to the Secretary, who has been a strong champion of Santo Tomás at the State and Federal levels since our first permit application to the Federal Environment Ministry in 2021.
Figure 6: Port of Topolobampo, scenes from our November 2023 visit
Photography by Gov’t of Sinaloa
Figure 7: Port of Topolobampo, scenes from our November 2023 visit
Photography by Gov’t of Sinaloa, aerial (left) from Google Earth
Site Team Activities: In addition to the post-PEA value-added studies the site team has completed the archiving of historical drill core and current program coarse rejects and laboratory pulp sample returns at the Ranchito core storage facility.
In order to continue with our community engagement, the team has been hosting Grade 5 through 7 students from Choix primary schools for junior earth science and mining mini symposia arranged with teachers. Doris Castro – our office manager and a former teacher herself – has led the engagement with school staff and the many children she knows in town to ensure a mini-curriculum of merit, while the site geologists, engineer and field personnel have delivered the content and workshop activities.
Figure 8: Project vehicles preparing to bring students from Escuela Primaria Estatal 20 de Noviembre, and arriving at the entrance to Ranchito
As in everything that they do, the site team has hosted the mini symposia with their characteristic enthusiasm, and feedback from classes and teachers has been positive. This initiative continues our education engagement in the community and follows from the environmental cleanup and information technology deployment efforts of 2021, 2022 and 2023.
Figure 9: Fidel Gomez, structural geology lead, in small-group workshop mode – and Don Ubaldo Trevizo in the background
Figure 10: Jesus Moreno (left, background) remains focused on the grindability study, while Fidel Gomez talks to the students about earth science and encourages them to consider future studies in the field of geoscience
Figure 11: Miguel Quintana fields mini-symposium questions during his presentation
Figure 12: Breakout and maestro sessions…
Figure 13: Miguel Quintana explains, and Choix native Alejandro Iza site surveyor and our Minero Prieto (‘land man’), explains his role and his application of drone flights
Figure 14: Copper mineralization up close! Future geoscience talent in training
Figure 15: Getting a small taste of fieldwork, courtesy Christiaan and Cornelo
Figure 16: In the core storage ‘archives’ – from a geologist’s perspective
Figure 17: A group shot – Magda (office staff) and Don Ubaldo Treviso (left) and Miguel, Fidel and Doris front center. Our team like to think that a number of the visiting students have been getting their first glimpse of a business wherein they will develop their future work careers!
Education Outreach – Working with Others
We will also be working more closely with Mexico Mining Center’s initiative for children – refer to their Instagram content (everything is available in Spanish and English) and with the Sinaloa Women in Mining led Pabellon Minero infantil initiative.
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Oroco YouTube Video Archive
Oroco’s ongoing community engagement has been documented in a series of locally produced videos.
Those videos may be viewed here.
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Analyst Coverage - Cantor Fitzgerald
Further to Cantor Fitzgerald’s initiation of coverage of Oroco on July 10, 2023, Cantor published an update on October 18, 2023 titled “Robust PEA for Santo Tomás – Attractive Advanced Copper Project in Mexico” following Oroco’s announcement of key conclusions of the Preliminary Economic Assessment. That report can be found HERE.
The updated report maintains a BUY rating.
Independent Research Report – HoldCo Markets
On September 22, 2023 HoldCo Markets published an independent research report on Oroco entitled “Large Copper Optionality with Near-Term Development Drivers”. The full report can be found HERE.
The Note concludes with a 12-month price target for Oroco equivalent to C$1.45/share. The near-term drivers are regarded by HoldCo as many, and will likely prompt a valuation methodology change along with a multiple re-rate higher.
On October 18, 2023, following release of the PEA by Oroco, Holdco raised their 12-month target price to C$2.15 per share, in part based upon a Long Term copper price assumption of $4.35/lb. The full note can be found HERE.
News Releases (since last Blog post)
Financing – Private Placement for $2.69M
Oroco has announced closing on C$2.69M in an over-subscribed private placement financing initially announced on 20 November, 2023.
The PEA has defined a solid case for the building of a copper mine at Santo Tomás based upon a straightforward truck and shovel operation with conventional flotation recovery of metals and the sale of shipped concentrates. In performing the study, a number of opportunities to enhance the project have been identified, and we have commenced the desktop, benchtop and test-work studies aimed at broadening the scope of potential pathways to improving development capital and cashflow options for project development. The financing will help us ensure that we continue these low-cost studies, some of which are expected to offer project value opportunities that will enhance development optionality.
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Preliminary Economic Assessment - Technical Report Filed
We are pleased to report that the Santo Tomás Copper Project PEA Technical Report has been filed on SEDAR as announced on December 1st. With an effective date of October 11, 2023, the report presents the detailed support for our News Release of October 17.
Figure 1 – PEA Report Cover
The report has been prepared for Oroco by Ausenco Engineering USA South Inc. of Tucson Arizona with significant contributions from eight Qualified Persons including professionals from Ausenco Engineering Canada ULC, Ausenco Sustainability ULC, Mining Plus (South America) and SRK Consulting (US) Inc. and SRK Consulting (Canada), Inc.
The Report is available on the Company’s website and on SEDAR under the Company’s issuer profile at www.sedarplus.ca.
The sustained report compilation effort was supervised by Fiona Jordan at Ausenco with technical writing support from Christina Knop, both in Tucson, with direct daily support by Andrew Ware (Choix and Tucson) and Salvador Ortega (Choix). Our sincere thanks to all of you as well as Oroco’s entire technical team in Choix and Vancouver.
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News Releases since the August 28th BLOG
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@Orococorp
