Toronto-based Orvana Minerals Corp. (TSE:ORV) says it has finally been granted its key Wetlands permit for the Copperwood project it is developing in Michigan, U.S., moving one step closer to advancing the copper property into production.
Over the last year, the gold and copper producer has been applying for permits that will allow for mining this copper deposit.
The company reported in a statement on Monday that the Michigan Department of Environmental Quality (MDEQ) granted the Wetlands Part 303 and the Inlands Lakes and Streams Part 301 permits for the proposed Copperwood copper mine.
"Orvana is pleased that the MDEQ has granted this permit," said COO and general manager of the project, Jim Jacques.
"The interaction and dialogue with the MDEQ, as well as their interaction with the Environmental Protection Agency, resulted in a permit that not only includes the creation and preservation of a significant acreage of wetlands proximal to the Copperwood project, but clearly outlines parameters for the proposed mine to be operated in an environmentally-responsible manner as well."
Shares of Orvana have been moving up steadily in the past weeks, gaining more than 13% Friday with the company receiving bullish analyst coverage of late after improving operations at its two producing mines.
Its stock rose by 13 cents to close at $1.12, up almost 18% since late January.
Stonecap Securities analyst Christos Doulis recently boosted his rating on Orvana to outperform and increased its target sharply to $2.10 from $1.50 previously on what Stonecap believes to be an executed turnaround at both the company's flagship EVBC and Don Mario mines.
Orvana's primary asset is the El Valle-Boinas/Carles (EVBC) gold-copper mine in northern Spain. It also owns and operates the Don Mario Mine in Bolivia, processing its copper-gold-silver Upper Mineralized Zone (UMZ) deposit, and is advancing its Copperwood copper project in Michigan, U.S.
Earlier this month, the company said it swung to a profit in its fiscal first quarter as revenue more than doubled on a sharp rise in production at its mines from a year earlier.
"As Orvana derives both immediate revenue from base metals and has a sizeable copper development project (Copperwood), the increase in our base metals price forecasts has increased our share price target considerably," Doulis explained in a note in which the capital markets firm raised its price targets for copper.
"While working capital constraints continue to concern us, things seem to be improving on this front and we expect the company to begin paying down its (expensive) line of credit with Fabulosa."
In the latest quarter, the company produced 17,759 ounces of gold, 4.4 million pounds of copper and 233,452 ounces of silver, compared to output of 9,937 ounces of gold 3.2 million pounds of copper and 82,654 ounces of silver in the first quarter last year.
Cash flow provided by operations before changes in working capital was $8.2 million in the quarter and capital expenditures were $4.2 million, resulting in positive free cash flow of $4 million, noted Doulis.
Total revenue rose 121% to $34.03 million from $15.37 million a year ago.
Looking ahead, the company said its short term focus is operational optimization at the EVBC and UMZ mines to generate increasing operating cash flows in order to pay down debt, and set a foundation for growth.
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