South America-focused gold producer Orosur Mining Inc (LON:OMI, TSE:OMI) said it is on track to meet its fiscal full-year (FY18) production guidance.
The company provided what it termed “a robust exploration and development update” on its operations in Uruguay.
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Highlights included an increase in underground reserves in and around the San Gregorio West underground mine area (SGW UG) and news of swift progress in developing a new underground project: Veta A.
The company added that a district scale geological model has been completed based on structural settings and is being used to search for additional significant discoveries in the 100 km long greenstone belt around San Gregorio (SG). This model has proved successful in explaining the historic deposits and has delivered some initial success at a new open pit deposit.
Orosur said the model will be key to the strategic greenfield exploration of this belt, which is designed to grow mine life and expand production using available spare capacity of the SG carbon-in-leach plant.
Encouraging exploration results at San Gregorio West underground
From 31 November 2016 and the company’s financial year end of end-May 2017, total production from SGW UG amounted to 12,600 ounces (oz).
Current remaining San Gregorio underground (SG UG) probable reserves (i.e. SGW UG plus Central and East) are 34,633 oz, or 664,861 tonnes at 1.62 grams per tonne (g/t) gold.
Further extensions to the east and at depth have returned encouraging exploration results, Orosur said.
Targeting an increase in reserves at Veta A
Veta A is a higher grade, previously mined open pit that had previously produced 29,000 oz @ 3.1 g/t between September 2006 and March 2008.
Current probable reserves have been put at 9,440 oz, or 122,328 tonnes @ 2.4 g/t gold.
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Orosur is targeting a significant increase in those reserves following positive drilling conducted more than 40 metres away from the current defined reserves.
“During FY17, we not only transitioned successfully from the Arenal underground operation to the new SGW UG mine but we also ramped up development and exploration activities with the objective of increasing scale and efficiency at San Gregorio,” said Ignacio Salazar, chief executive officer of Orosur.
“We are also pleased to announce positive geotechnical and drilling results in Veta A, as we seek to further advance this project as our next underground operation,” he added.
“Finally, we have now completed a district scale geological model which is already providing encouraging results. In support, we are deploying the necessary resources, including the purchase of a new diamond core drilling rig, to give our team the best chance of making a strategic discovery in Uruguay, which would allow us to increase production and mine-life.
“The company is currently on track to meet its FY18 production guidance and we expect to report back shortly on the start of drilling at Anza in Colombia,” Salazar said.