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Press Release by
MONTEVIDEO, Uruguay- Orosur Mining Inc. ("Orosur" or "the Company") (TSX/AIM: OMI), the South America-focused gold producer, developer and explorer is pleased to provide an exploration and development progress update for its Uruguayan operations.
Ignacio Salazar, CEO of Orosur, said:
"Following our successful US$3.2 million fundraising in mid-August, we are pleased to be providing a robust exploration and development update for Uruguay.
"During FY17, we not only transitioned successfully from the Arenal underground operation to the new SGW UG mine but we also ramped up development and exploration activities with the objective of increasing scale and efficiency at San Gregorio.We are also pleased to announce positive geotechnical and drilling results in Veta A, as we seek to further advance this project as our next underground operation.
"Finally, we have now completed a district scale geological model which is already providing encouraging results. In support, we are deploying the necessary resources, including the purchase of a new diamond core drilling rig, to give our team the best chance of making a strategic discovery in Uruguay, which would allow us to increase production and minelife.
"The Company is currently on track to meet its FY18 production guidance and we expect to report back shortly on the start of drilling at Anza in Colombia."
Uruguay Exploration and Development: FY17 Overview and Plan for FY18
Following a challenging gold price environment in FY16, the Company's priority during its fiscal 2017 was the successful construction and opening of the SGW UG mine, entirely financed from cash from operations.
In addition, almost 15,000 metres of exploration drilling (both reverse circulation ("RC") and diamond drilling ("DD")) were completed in Uruguay during FY17. The emphasis of this drilling was multifaceted and included recommencing the following exploration activities:
1. Adding short term underground reserves around SGW (8,750 metres drilled in the year);
2. Adding reserves and resources to near mine open pit projects (6,060 metres); and
3. A limited budget was allocated to more greenfield type exploration within the Isla Cristalina greenstone belt, looking for more significant strategic discoveries.
These three exploration activities are planned to be further developed in FY18. The plan for FY18 is to increase the amount of drilling next to the existing CIL plant and within the 100 km long greenstone belt which the Company controls in Uruguay, with the aim of increasing mine life and/or increasing production by utilising the spare capacity in the San Gregorio CIL plant.
In addition, at the Company's underground projects, the Company plans to drill out projects in FY18 beyond SG (ie. Veta A or others).
FY17: Exploration and Development of the San Gregorio West Underground Mine (SGW UG Mine)
SGW UG is a continuation at depth of the San Gregorio open pit deposit which produced approximately 536,000 oz at an average grade of 2.12 g/t Au. At the end of FY17, total underground development work amounted to 2,800 metres of 3,900 metres for the total planned development of the SGW sector.
During FY17, 8,750 metres of DD were drilled in these areas around the SGW mine and returned good results. Reserves in San Gregorio Central, between SG West and SG East, were defined with sufficient detail and continuity to commence work associated with development and inclusion in the Company's mining plan.
As of May 31, 2017, the SGW UG mine had already produced 12,600 oz of gold. Probable Mineral Reserve in SG UG (SGW plus additions into Central and East) are 34,633 oz. The eastern extension of the SG East mine and the deeper extension of SGW UG were tested by several drill holes; with results indicating the mineralized body is still open.
Additionally, the Company is currently working with SRK Perú on a study to add additional reserves in SG, for example from an existing crown pillar between the open pit and the UG designs.
Along with this activity around SG, the Company also plans to advance its mining plans for the Veta A and Argentinita deposits. These activities provide scope to add projects similar in size to SG.
Potential for New UG Mine: Veta A Underground
Veta A represents an exciting potential project for a new underground mine. Historically, Veta A was a relatively small high grade open pit, located next to the now reclaimed San Gregorio tailings dam, which was in operation from September 2006 until March 2008. The Veta A open pit produced approximately 29,000 oz at average gold grades of 3.10 g/t.
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As open pit mining progressed, the mineralized body appeared to run underneath the tailings dam. When operations approached this physical barrier, mining was halted and the pit was backfilled with waste and then reclaimed. Current probable reserves in the zone are 9,440 oz.
A re-evaluation of the Veta A mineralized body below the tailings dam is currently underway to assess: a) its feasibility from a geotechnical perspective and b) its geological potential.
An updated preliminary geotechnical study of the Veta A deposit was performed by SRK consulting during this quarter: Results of this study indicate that, providing required preventive measures are undertaken, there are no subsidence, liquefaction or any other negative interactions between the closed tailings dam and potential future underground mining operations.
In parallel, a 697 metre drilling campaign, has provided encouraging preliminary results.
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