Orosur reports significant progress towards growth objectives in Q3

In its results for Q3, Orosur Mining (AIM: OMI) said that it has made significant progress towards delivering its growth objectives. During the three months ended 28 February 2010, the company completed the acquisition of Fortune Valley Resources and subsequently began drilling at the newly acquired Pantillo gold property in Chile.

“Orosur has made significant progress during the quarter”, Orosur CEO David Fowler said. “Production for the quarter was 12,742 ounces in accordance with expectations and we remain on track to achieve our production target for the year ... of 55,000 to 57,500 ounces at US$825 per ounce.”

Following this acquisition of Fortune Valley, drilling commenced at Pantanillo early in February, with each of the first 9 holes intersecting mineralization. Notably, PNN-10-04 and PNN-10-06 intercepted 107m at 1.21 grams per tonne (gpt) gold from 150m and 118m at 0.79gpt gold from 8m respectively.

Furthermore, Orosur appointed AMEC (LSE: AMEC) to estimate an independent 43-101 compliant resource, and complete a scoping study for Pantanillo during calendar 2010.

Orosur also noted that exploration work began at the Anillo project, which is close to the El Peñon mine in northern Chile.

Elsewhere, in Uruguay, the company completed an updated resource estimate for the Arenal Deeps deposit, which is adjacent to the current San Gregorio mine.

The company announced the new NI43-101 compliant resource in March. With a 1.5 g/t cut-off, the new resource has 2,143,000 tonnes at 3.61gpt gold for a total of 249,000 contained ounces of gold - in the measured and indicated category. Orosur highlighted that the resource is currently open along strike to the east and down dip.

The company also hired AMEC in Uruguay to complete a feasibility study, and the consultant’s team has already visited the San Gregorio Mine site to commence this work - which is expected to be finished in the third calendar quarter of 2010.

Development of this resource is expected to progressively reduce cash costs and extend mine life, Orosur stated.

Also in Uruguay, the company entered into an option agreement with Gladiator Resources Ltd, whereby Gladiator can earn up to an 80% interest in Orosur’s Isla Cristalina Belt – in respect of the properties iron ore, manganese ore and base metals potential.

Orosur Mining will retain the rights to gold, silver and diamonds in the project area, and has agreed to provide Gladiator with airborne and ground geophysics, geological maps, drilling and other data relevant to iron ore exploration in the project area.

In terms of its financial performance during the quarter, total sales reached US$13.2m in Q3 (Q308: US$17.1m), reflecting lower comparative production. Average gold prices increased to US$1,110 per ounce (FY08: US$822). Orosur reported a pre-tax loss of US$2.3m (FY08: US$1.1m loss).

http://www.proactiveinvestors.com.au/companies/news/6493/orosur-reports-significant-progress-towards-growth-objectives-in-q3-6493.html