Orovero Resources Corp. (formerly Golden Alliance Resources Corp.) (TSX-V: OVR, Frankfurt: GA0, "Orovero" or the "Company") has signed a letter of intent to enter into an arrangement ("Partnership") to partner with a Peruvian-based gold mining company ("Partner") with hands-on expertise in small-scale gold processing. Under the Partnership, the Company will fund the development of a toll milling operation and the Partner will provide management expertise that will include identifying existing milling facilities for purchase, acquisition and permitting, construction, financing, systems management, procurement of ore, and commissioning. The Company will initially have a 100% interest in the Partnership while the Partner will maintain an option to acquire 20% of the Partnership for 24 months post-commissioning. The Company will maintain operational control of the Partnership and will be overseen in part, by lead advisory board member Mr. Carlos Mirabal, who has extensive experience in this process.
"The toll milling business has been chronically underfunded for centuries and has emerged as an activity dominated by the underground economy. Under a new legislative mandate enacted in March 2012, the Peruvian government has unveiled an entirely new regulatory system for small mining. This has resulted in significant new demand for legally compliant ore-processing facilities and our new partnership will allow us to immediately capitalize on this. The opportunity for toll milling is immense and we look forward to working closely with our new Partner. In a market where the junior exploration model is broken and companies are simply looking for ways to survive, I believe we have found a way to not only survive but to prosper," stated Len Clough, Orovero President and CEO.
The Peruvian government has undertaken some significant measures to address illegal mining and has proposed a process of formalization specifically addressing the small and artisanal miners. Under the new legislative mandate, small miners will only be allowed to conduct exploitation activities on land in which they have registered with the mining authorities. Furthermore, legislation requires milling operations to only process "legal" ore, being ore that comes from permitted concessions. It is estimated that informal (illegal) mining could account for up to 20% of the country's annual output of 161 tons of gold produced.
The Partnership's objective is to develop an initial operation with throughput capacity of approximately 50 tonnes per day with the ability to expand beyond that. Surveying efforts have already commenced to identify a suitable mill for acquisition, utilizing the existing network of our new Partner. Initial plans involve an extensive capital investment plan into the facility, upon acquisition, to improve efficiency and throughput capabilities. 'Legal' ore will then be sourced for purchase, through a logistics team who specialize in this field and have developed a network of relationships with neighbouring miners. The Company will look to establish contracts for delivery to ensure steady mill feed. The Company will also establish an 'ore-purchase' office which can purchase ore for its inventory which can then be used for blending purposes. Prior to processing, the Company negotiates a fee with the miner, based on a certain formula, where volume and grade are the two most important factors. Spot gold pricing plays a very small role and consequently, the toll milling business acts like a utility with predictable cash flow and low commodity risk. Furthermore, the absence of direct mining risk also provides significant advantages to the business model.
About Orovero Resources Corp.
Orovero is a company focused on pursuing near term production opportunities with cash flow. The Company is working in partnership to develop its first gold toll milling operation in Peru with a goal of becoming Peru's processor of choice with multiple facilities processing in excess of 1000 tons per day. In addition, the Company has a portfolio of highly prospective exploration properties including its' flagship property called Rio Tabaconas located in Northern Peru.
ON BEHALF OF THE BOARD
Mr. Len Clough, Chairman, President, CEO and Director
For further information please contact:
Mr. Shawn Perger, Corporate Communications
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release may contain forward-looking statements including but not limited to comments regarding the timing and content of upcoming work programs, geological interpretations, receipt of property titles, potential mineral recovery processes, etc. Forward-looking statements address future events and conditions and therefore involve inherent risks and uncertainties. Actual results may differ materially from those currently anticipated in such statements. Readers are encouraged to refer to the Company's public disclosure documents for a more detailed discussion of factors that may impact expected future results. The Company undertakes no obligation to publicly update or revise any forward-looking statements. We advise U.S. investors that the SEC's mining guidelines strictly prohibit information of this type in documents filed with the SEC. U.S. investors are cautioned that mineral deposits on adjacent properties are not indicative of mineral deposits on our properties.
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