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Orosur Mining Inc. is a gold producer and exploration company focused on identifying and developing gold projects in Latin America. The Company is a fully integrated mining company, possessing the skills necessary to explore and develop its discoveries. The Company operates the only producing gold mine in Uruguay (San Gregorio), and...Read more
Orosur Mining on track to meet production forecastOctober 15 2012, 7:53am
The South America-focused firm produced 15,451 ounces of gold in the first quarter to September, up 24% on a year ago and keeping it on track to produce between 63,000- 68,000 ounces this financial year, it said.
Costs in the quarter rose to US$1,094 per ounce due to a higher stripping ratio and more underground work at the core San Gregorio mine in Uruguay, though the average cost for the year is still expected to be US$975.
Revenues for the quarter rose to US$26.3 mln, from US$21 mln, though net income fell to US$US$2.3 mln from US$4.4 mln.
Orosur added it is planning for the development of the San Gregorio open pit, which is expected to contribute approximately 80,000 ounces of reserves over the next 4 years of mine plan.
To maximise production levels in coming years and allow more time for permitting, the company may accelerate the start date for San Gregorio to January 2013.
This would mean bringing $US4 m worth of capital investment from future years into the 2012/13 financial year, Orosur said.
Over the first quarter, 404,997 tonnes of ore were milled at an average grade of 1.29 grammes per tonne of gold with a recovery of 91.8 per cent.
David Fowler, chief executive said: “We are making good progress with the ramp at Arenal Deeps which is key to our development.
“We completed 1,462 meters of ramp development by the end of August and plan to finalize the remaining 494 meters by the end of the year.
“The company took over all development operations in August 2012 from the contractor and progress has now been accelerated as a result. The transition has taken place without disruption and important cost savings have been achieved.”
Orosur is due to announce the results of a strategic review shortly that will include a dividend policy, a revised exploration and development strategy for extending the mine life at San Gregorio and will outline plans for its Chilean projects at Pantanillo, Anillo and Talca.
Today, it added that Uruguayan government is discussing a draft for a new law to regulate major mining operations.
Orosur said that on the basis of the draft it would be affected by this new legislation, which intends to create a significant additional income tax where EBIT margins exceed approximately 35% and cancel some of the tax benefits on mining investments in Uruguay.
The draft contemplates a transitionary period in which, current operators will not be affected and extends for 2 years after the law is published. The 2015/16 financial year is lieky to be the fist year it is affected, Orosur said.
It added that at this stage it was unable to calculate the impact, if any, that the proposed new law would have on the company.