Resource Report Sheds New Light on High-Grade Oxides at ORO’s Tres Cruces

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Disclosure: The following represents my opinions only. I am not receiving any compensation for writing this article, nor does Hydra Capital have any business relationship with companies mentioned in this post. I am long ORO.V and PRYM.V (Image credit to Thomas Kinto on Unsplash)

I’m short on time this morning, but I just finished reading through a resource update from New Oroperu (ORO.V, last at $2.32) that I’ve been looking forward to for some time… and it was a good read. Last June, the company had mentioned that it was breaking out the oxide component of its Tres Cruces gold resource as a way to quantify what the “starter pit” of this deposit looks like. The starter pit was to encompass resource ounces that can be recovered with a simple heap leach operation (like the one that Barrick was running at its nearby Lagunas Norte mine (7 to 8 miles away) before it was put on care and maintenance for lack of oxide ore that it could process). At this point, it’s important to understand that quality oxide gold deposits are sought after by miners because of their low-capex, low op-cost, and relative simplicity. You blast/dig, haul, crush, and spread the crushed ore on a leach pad; that’s it in a nutshell. The required equipment is both simple and inexpensive, and operating margins can be very high. Coming back to New Oroperu, with the numbers released this morning, whether these leachable ounces at Tres Cruces 1) go through Lagunas Norte as part of a greater “Lagunas Reboot” plan, or 2) are developed as a stand-alone development, is not what’s on my mind today — that’ll sort itself out over time. What is on my mind is the potential value of the ounces on the table in the shallow, high-grade, leachable ore. Those leachable ounces are like pouring jet fuel on wood if you’re trying to start a fire (i.e., build a mine). Look no further than the history of Alacer Gold (ASR.TO, recent merged with SSR Mining) to see how oxide ounces can jumpstart a much bigger operation if desired… or Orla Mining (OLA.TO, last at $5.52)… or Prime Mining (PRYM.V, last at $2.50). As a friend of mine likes to say, “Just sayin’…”

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