And it’s gold, gold, gold for Orinoco!
You could almost hear the voice of celebrated ABC sports announcer Norman May when Mack Horton delivered first gold for Australia on the opening day of the 2016 Rio Olympic swimming program.
The first gold means a lot and we were cheering hard because we knew the feeling.
We had just poured our first gold and May’s famous call of “Gold, gold, gold for Australia” from the 1980 Moscow games was ringing in our ears.
Our first gold pour at the start of August feels like we had won an Olympic gold medal. It’s the culmination of a lot of hard work since we began drilling at our Cascavel project in Brazil in late 2012.
Back then, we knew that Cascavel (then known as Curral de Pedra) was highly prospective for high-grade gold. The project is on the Faina greenstone belt in a region that has yielded significant gold production in the past. Cascavel is only 18km as the crow flies from the Sertão gold mine at which Troy Resources produced 247,000 ounces of gold from a shallow open pit between 2003 and 2007 at the exceptional grade of 29 grams a tonne.
Over the past four years we’ve focused on defining a small-scale, low-cost development and proving up the extensions to the Cascavel mineralisation, including the additional gold lodes that sit beneath the main lode.
This year we’ve built a gravity processing plant and started to stockpile low-grade development material to use in commissioning the plant. That processing started in July.
Late in July we put gold concentrate derived from this low-grade material through the plant. Then on 1 August we did a trial gold pour designed to commission the gold furnace and test fluxing requirements for smelting.
From that pour came our first bar of gold bullion.
The Cascavel plant is now running 24 hours a day while continuing to process stockpiles of low-grade development material. Over the coming weeks, the plant will process high-grade parcels of ore from actual production stopes as we start to build toward officially beginning production.
Once production at Cascavel hits the initial mine design of 40,000 tonnes a year (in the next month or two) we will already be thinking about an expansion of the mine well beyond its initial design capacity – after all, we have built a processing plant that capable of processing over 100,000 tonnes per annum and we would like nothing better than to fill it up!
The maiden pour was a great moment for us as it marked the start of our transition from explorer into commercial gold miner. Producing first gold vindicates the faith and commitment that our shareholders, investors, financiers and supporters have placed in us over a number of years.
And to achieve that milestone in the month when our adopted home was hosting the Olympics for the first time made it very special.
It’s gold for Australia in Brazil!
First gold bar to be a welcome arrival
There’s a feeling here at Orinoco Gold that’s very similar to first-time parenthood.
As we prepared for our maiden gold pour, we were thinking of that first gold bar as our first-born.
The gold pour marks the point at which Orinoco Gold passes from being an explorer and mine developer and to being a gold producer.
And it certainly looks to be an opportune time to join the ranks of global gold producers.
Given the high exploration potential of our property in Brazil’s Goias state and the returning optimism in the gold sector, we believe we can make Orinoco a meaningful mid-tier high-grade gold producer over time.
The infrastructure we’ve built at Cascavel will be critical to this.
We kicked off the commissioning process of the gravity processing plant back in June, starting the “dry commissioning” (pre-operational testing). The first step was to check that all key mechanical and electrical components were operating according to design specifications, and that there were no significant issues.
Next came the “wet commissioning,” which means testing and initial operation with fluids and with load, earlier this month. We started off running a 5,000-tonne stockpile of low-grade commissioning material through the plant, which we are running through the circuit while the plant is optimised, balanced tuned and then stabilised.
Next, we process batches of production ore from the Cascavel stopes as we ramp-up the commissioning process before starting production build-up.
This involves running the plant for longer shifts to process the production ore before pouring that first bar, which we did at the start of August.
It’s a very exciting time for all of us.
While all of this was happening on the operational front, we bedded down a $4.5 million institutional share placement to strengthen our balance sheet in the lead-up to production.
The placement also allows us to begin planning for the rapid expansion of the production profile of Cascavel.
The placement was heavily oversubscribed and saw several new Australian institutions join our share register. Our US funding partner, Cartesian (with which we have a forward gold sales agreement) also participated in an emphatic show of confidence in Orinoco’s progress.
We now have about $7 million in the bank (post raise) and a strong working capital buffer in place as we move into commercial gold production.
We’ve identified extensions to the main Cascavel gold system, which are accessible from the existing underground infrastructure, and we also intend to investigate parallel outcropping gold lode structures that we’ve found.
We’re also keen to start bulk sampling at the Cuca prospect, which sits 350 metres north of Cascavel, ahead of possible mining there.
But all of that can wait.
It’s first things first and for us. The beautiful sight of Cascavel’s first gold bar glinting in the sunlight has us as proud as first-time parents.
We are preparing for our maiden gold pour
The history of gold is also the history of mankind.
Almost since humans learned to stand upright and walk, gold has been there with us as a constant companion.
For thousands of years, it has been used for jewellery and ornaments and as a sign of wealth and also as a currency or medium of exchange for goods and services.
Its easy workability and unique non-degradable properties made it ideal as a store of value.