Orvana says that transportation costs at Copperwood could be higher

Orvana Minerals Corp. (TSE:ORV) says that initial results from additional work completed to optimize its Copperwood project in Michigan have indicated that transportation costs will be "significantly higher" than the $25 per tonne estimate contained in the feasibility study from March of last year. 

The Toronto-based company, which has obtained all the major permits required for the project, had an independent third party engineering firm review the NI 43-101 compliant feasibility study undertaken in 2012. After the review, it decided to pursue work to improve results, with a particular focus on metallurgical testing and underground optimization. 

In a statement Monday, Orvana said initial work on a marketing study has indicated that transportation costs will now be between a low end of the range of approximately $100 per tonne if the smelter(s) are in North America, and a high end of the range of approximately $200 per tonne if the smelter(s) are in Europe or Asia. 

"While external parties have expressed interest in off-take agreements, no agreements have yet been finalized pending financing and a final construction decision," according to Orvana's statement, which also said the company will continue to update performance assumptions and financial analysis on the Copperwood project, while it pursues options to bring value from the property. 

Initial work from a concentrate marketing study has also indicated that treatment and refining charges are estimated to be higher than those used in the feasibility study. These charges vary as a result of current market conditions, according to the Toronto-based miner's statement. 

Meanwhile, Orvana has engaged in additional metallurgical testing and underground work following the review, and said that additional metallurgical testing of more representative samples from Copperwood have been confirming initial recovery and concentrate quality results. 

The testing is also investigating the possibility of increasing recovery rates and quality by optimizing the grind size, which could result in improved production rates and lower transportation costs. 

It added that further geotechnical studies have shown that underground mining feasibility study assumptions were "overly conservative", which is anticipated to lead to lower operating costs and greater mining productivity. 

Shares of Orvana were down 7.3 per cent on Monday morning, at 44.5 Canadian cents in Toronto.