Dublin- and London-listed Ovoca Gold PLC (LON:OVG, ISE:OVX) said the Russian state regulator has extended the Rassoshinskaya exploration licence for two years to February 15 2013, and it reported it has a strong cash position.
The Rassoshinskaya license is in the Northeastern part of the Magadan region and contains the Olcha and Podgorniy projects.
Chief executive Tim McCutcheon said: "Ovoca has more time to further explore the Olcha and Podgorniy projects and intends to convert those projects to exploitation status as soon as possible subject to satisfactory exploration results.
“Our cash and equivalents position is very strong, and our strategy to give shareholder exposure to the gold price before we have our own gold production has been performing well. Our per-share cash and investments value is approximately 40 pence, and so we are still trading at a discount to cash and investments."
The stock was lifted by today’s comments and was trading up 3.6 percent in opening trade at 35.75 pence.
Ovoca currently has circa 1.3 million JSC Polymetal common shares worth US$24.8 million as at close of business on December 3 2010 – the group acquired, developed and sold the Goltsovoye silver project located in the Magadan Region to Polymetal.
It has a further approximately US$9.1 million in cash and US$21.5 million in a diversified portfolio of gold mining equities. In total, Ovoca’s cash and securities position as of December 3 2010 is US$55.4 million.
The final documentation needed from the Irish courts is in the process of being filed and it is expected Ovoca can start to execute its planned share buyback for up to 10 percent of the capital by the end of the year.
Ovoca’s principal activity is gold exploration in the Magadan region of the Russian Federation. It is currently aggressively exploring and developing its 100 percent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.
Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city inMagadan. It is accessible by year-round road and there is power infrastructure on site. Internal preliminary estimates suggest a gold resource (non JORC code of Russian standard compliant) of over 700,000 ounces. The company intends to put Stakhanovsky into production by 2013.
Rassoshinskaya is in the North Eastern part of Magadan about 200 kilometres from the town of Simchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource.
Nevsko-Pestrinskoye is located in the central part of Magadan near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the company from 2006 - 2009 and sold to Polymetal for US$47.7 million. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko-Pestrinskoye.