Orko Silver Corp. (CVE:OK) said Tuesday that it has resolved technical issues that were causing delays in the completion of its updated resource estimate for its 100 per cent owned La Preciosa project in Mexico.
The company is anticipating the results of a new independent resource estimate, currently being prepared by mining consulting firm Mining Plus, later this month.
La Preciosa is located in Durango State, which envelops the heart of Mexico’s prolific Sierra Madre Mining Belt, and includes large silver deposits such as Fresnillo and Pitarrilla.
Orko said that delays to the updated resource estimate are attributed to a more detailed review of the deposit that was undertaken, and subsequent development of a revised vein model from the veins that were modeled in the August 2011 resource estimate.
Early in the study, a decision was made to devote a higher level of diligence to the preliminary geological interpretation and resource modeling, said the company.
In addition, as a direct result of the increased size of the database, Orko said that Mining Plus experienced significant software issues when utilizing "industry standard" resource modeling software.
The company said this resulted in a "considerable extension" in the predicted time to complete the update.
"Although we are frustrated by the delays with the delivery of the updated resource estimate, we are encouraged by the amount of diligence and detail due to the increased size of the database that will be included in the updated estimate and we look forward to announcing the results as soon as the new estimate is completed," said Orko president and CEO Gary Cope.
The La Preciosa resource currently being modeled by Mining Plus has now been defined by a number of individual variably dipping and striking vein sets over an area with dimensions of 3.3 by 1.8 kilometres, and to a depth approaching 650 metres below surface, said the company.
Orko said the resource is extensive - "it remains open along the eastern flank, to the southeast and to depth, thus presenting potentially increased value to the company."
The updated resource estimate, originally scheduled to be completed and released in March, is to be a key component of the new preliminary economic assessment (PEA) currently being completed by AMEC Americas.
Orko said the potential exists for improvement in the economics of the project relative to the 2011 PEA. Timing for the completion of the new PEA will be predicated on the final completion of the updated resource estimate.
Orko said it currently has roughly $11.6 million in cash and short-term investments and is well funded to continue to advance the project.
The company has taken over as operator and is in the planning stages of further optimization on the project after former partner Pan American Silver (TSE:PAA) (NYSE:PAAS) decided to exit their joint venture in early April.
La Preciosa is one of the world's largest undeveloped primary silver deposits, located near the city of Durango, Mexico.
Orko last updated that the company was "one step closer" to mining La Preciosa, after a Preliminary Mineability Assessment (PMA) concluded mining could be done at the site.
The results of the PMA covered both open pit and underground mining options that were presented in its 2011 PEA, released by the company and former partner Pan American.
The August 2011 PEA gave an estimated mineral resource containing 113 million ounces of silver classified as indicated, and a further 46 million ounces of silver classified as inferred.
The report showed an after-tax net present value of $315 million at a five percent discount rate, and a 24.3 percent internal rate of return.