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ASX Release
31 July 2013
Contact
Mark Papendieck Managing Director [email protected] Suite 9, 5 Centro Ave Subiaco WA 6008
P (08) 9463 3241 F (08) 9226 2027
Registered Office Suite 2, 12 Parliament Place West Perth WA 6005
PO Box 902 West Perth WA 6872
P (08) 9482 0540 F (08) 9482 0505
[email protected] www.orinocogold.com
Issued Capital76,000,000 Ordinary Shares
15,000,000 Performance Shares 8,000,000 Listed Options 19,700,000 Unlisted Options
ASX CodeOGX (Ordinary Shares)
OGXO (Listed Options)
June Quarterly Activities Report
Highlights • Drilling at Cascavel prospect intersects silver, copper & tungsten
mineralisation between gold zones; • Initial exploration campaign targeting this polymetallic
mineralisation underway: • Aerial geophysics of greenstone belt; • 3,000m diamond drilling;
• Exploration decline licence, to confirm high-‐grade gold mineralisation at Cascavel, expected this Quarter;
• Scout drilling at the Eliseo target confirms gold mineralisation in the system;
• Substantial increase in size of Faina Greenstone Belt tenement package.
Faina Goldfields Project Orinoco Gold is exploring a number of high-‐grade gold exploration projects, including Cascavel, which are located in close proximity to each other within the Faina greenstone belt (see Figures 1, 2). Located in the central Brazilian state of Goiás, the Faina Greenstone belt is located ~100km southwest of AngloGold’s world-‐class Serra Grande mine and Yamana Gold’s Pilar mine. The Faina greenstone belt was host to Troy Resources’ successful Sertão mine (~247koz @ 29gpt gold) while Yamana Gold (NYSE:AUY) and Orinoco are now the two largest tenement holders in the greenstone belt. The Faina greenstone belt remains inadequately explored for hard-‐rock gold deposits and completely unexplored for polymetallic mineralisation containing copper, silver, tungsten and other base metals. Orinoco aims to define and develop a number of deposits (a ‘mining camp’) within the greenstone belt centred around the large, high-‐grade Cascavel system where it has reported high-‐grade gold assays from drilling, channel sampling and bulk sampling results. The gold-‐bearing structure at the extensive Cascavel prospect has been identified over an area of 1,600m x 620m (and remains open along strike and down dip) with three identified gold zones ranging in width from 4-‐25m. In addition to Cascavel, the rapidly developing Eliseo prospect shows gold anomalies over a length of 3km (and remains open) with two scout drill holes
both showing visible gold. During the Quarter, Orinoco announced that it had doubled the size of its ground position in the Faina Greenstone belt to approximately 194sqkm with no upfront payments required to the vendors. The additional ground substantially increases the strike length of the prospective Eliseo Project while also introducing several new targets in the immediate vicinity of both the Cascavel and Eliseo Projects (Figure 1). (Refer to the ASX announcement dated 17 April for further details.) A key component of the new tenement package is a significant extension to the Eliseo Project. Similar geology and positive rock chip samples (gold in panned concentrate from rock chips with assays pending) now extend over a strike length of more than 3km. With a greater understanding of the probable structural controls on mineralisation at Eliseo following a geophysical survey in March this year, work is progressing on evaluating the resource potential of the enlarged Eliseo project. The newly acquired tenements also include the Charuto Target, where historic drilling defined an ore shoot and oxide zone. Historic drilling included 33m @ 4.2g/t Au from hole GVR401. Located 5km north-‐west of Eliseo, Charuto is currently interpreted to have a similar style of mineralisation to Eliseo. Cascavel Project (OGX 70%) Cascavel is the most advanced of the Company’s Brazilian prospects with gold, silver, copper and tungsten mineralisation so far being defined over an area of 1,600m x 620m. Mineralisation at Cascavel remains open along strike and down dip. The gold is located in structurally controlled quartz carbonate vein units that have a demonstrated thickness of up to 25m, while the polymetallic mineralisation has so far been identified in a carbonate unit, located between the two gold zones, that was intersected by regional scale NE striking fluid-‐bearing faults. The gold mineralisation at Cascavel is spatially (and chronologically1) separate to the polymetallic mineralisation.
During the June Quarter, Orinoco reported multi-‐element assays of the non-‐gold bearing zones at Cascavel from diamond drilling conducted as part of its first exploration program between November 2012 – February 2013. Although previous drilling did not target either the carbonate unit or the faults, it is considered indicative of the scale of the mineralising event/s that a significant number and spread of previous holes carry polymetallic mineralisation. The results show that polymetallic mineralisation is distributed over an area of at least 1,600m x 500m. Current exploration is focused on gathering further information on the controls, source and distribution of the polymetallic mineralisation at both a local and regional scale including the location of these results within the system. Importantly, work continues on the identification and definition of further mineralising faults, other carbonate layers or zones that may also be preferentially mineralised and on understanding the controls of the high grade zones.
1 The shear zone hosted gold is considered to be late Archean or early Paleoproterozoic (~2.5 Ga) and is predominately contained within structurally controlled packages of stacked quartz carbonate veins. The faults that are interpreted to have deposited the polymetallic fluids in the carbonate unit, have cross cut the stratigraphy at Cascavel and are interpreted to be Neoproterozoic (~600Ma).
Phase 1 of a 3,000m diamond-‐drilling program is underway with phase 2 of the drilling pending the completion of an aerial geophysics survey and a review of all available data. Approximately 23 holes drilled within the Cascavel area reached the depth of the carbonate zone. Of those holes, 15 contain evidence of polymetallic mineralisation with highlights including:
§ 17.56m @ 1,292.4g/t silver, 11m @ 0.25% copper, 16.41m @ 1,400g/t tungsten from 101m § 25m @ 39.2g/t silver and 21m @ 257.9g/t tungsten from 105m (CdP_025), including:
• 3m @ 97.2g/t silver from 114m § 6.83m @ 50.7g/t silver, 277.9g/t tungsten from 101.12m (CdP_023), including:
• 1.95m @ 83.9g/t silver from 106m § 4.70m @ 58.6g/t silver, 3.70m @ 373.8g/t tungsten from 159m (CdP-‐014), including:
• 0.85m @ 236g/t silver from 162m
Work to date on the gold structures has confirmed the high-‐grade nature of the mineralisation but the nuggetty nature of the gold, located in multiple stacked quartz veins, meaning that drilling for grade is a challenging exercise due to the high variability in the gold distribution. Drilling successfully defined the geological continuity of the stacked quartz vein system. Due to a series of issues with a laboratory previously used by the Company, full results from re-‐assays of the gold zones from the first program of drilling have not yet been received. All un-‐assayed samples were recovered from the laboratory in question and were resubmitted to ALS Global for screen fire assay during the Quarter. The most effective method of assessing the grade of a coarse gold system such as Cascavel is to sink an exploration decline to open up the gold-‐bearing system underground. This will provide a more accurate analysis and determination of grade. Previous close-‐spaced sampling and bulk-‐sampling of the mineralisation in underground artisanal workings yielded excellent results. The Company is expecting to receive the necessary approvals for an exploration decline in the current Quarter.
Previously reported channel samples, drill holes and bulk sample data at Cascavel illustrate the difference that sample size can have on grade estimation in coarse gold systems. Channel sample #C35, the intersection of the Mestre gold zone in drill hole CdP_023 and the bulk sample taken from the Mestre winze are all located within approximately 20m of each other. Drill hole CdP_023 returned 0.5m @ 0.2 g/t Channel sample C35 returned a grade of 1.85m @ 5.12 g/t gold, while a 500kg bulk sample returned a grade of 39.3g/t gold.
Illustration of the impact sample size can have in a coarse gold deposit. Importantly, the inclusion of multiple coarse
gold grains in a small sample can also overstate true gold grade.
ELISEO PROJECT (OGX 70%) The Eliseo Project comprises 6km of gold anomalies located approximately 15km to the north of the Cascavel Project (figure 4). Follow-‐up exploration work at the Eliseo North prospect, in the Faina greenstone belt in central Brazil, has confirmed the depth extensions of gold mineralisation previously identified with rock-‐chip sampling (see ASX Release 17 March 2013 and April 17 2013). That sampling identified a 1.3km gold anomaly within the original Eliseo North tenement, with the 24 assays returning gold grades ranging from 0.7 g/t gold to 22.8 g/t gold. Results from a follow-‐up ground-‐based Induced Polarisation survey demonstrate several geophysical anomalies that extend over the 1.3 km strike length of the rock-‐chip sampling anomaly. These geophysical anomalies appear as 20-‐40m thick rod-‐like structures. They appear to be related to sulphide-‐rich zones emplaced in outcropping structures interpreted as fold hinges, as well as in slightly deeper (100-‐150m) structural zones. The drilling of two scout holes prior to the acquisition of the IP survey has confirmed the presence of gold mineralisation at depth, providing evidence of a three dimensional aspect to the surface anomaly. Even though these holes missed the subsequently identified IP anomalies, they still returned visible gold and assays of 3m @ 3.81g/t gold, 1m @ 4.86g/t gold from EL_002 and 1.72m @ 3.81g/t gold, 0.5m @ 2.88g/t gold and 1m @ 1.65 g/t gold from hole EL_001 (full results in Table 1). The exploration program at Eliseo is now testing the shallowest IP anomaly with bulk samples having been collected from 2 x 2 x 2 metre shafts. These are awaiting processing at a metallurgical facility.
CORPORATE The Vendors of the Curral de Pedra tenement package, which includes the Cascavel Project, have agreed to Orinoco deferring the remaining retention payment which was due in September 2013. The final retention payment of US$950k cash and US$1.25m in equity is now payable to the vendors in March 2014 in order for Orinoco to maintain its 70% ownership of the project. During the quarter, Orinoco completed a placement of 14.5 million shares at 25 cents each to raise approximately $3.6M before costs to underpin ongoing exploration programs at its Faina Goldfields Project
For further information, please contact: Mark Papendieck Nicholas Read Managing Director Managing Director Orinoco Gold Limited Read Corporate 08 9463 3241 08 9388 1474 [email protected] 0419 929 046 Competent Person’s Statement: The information in this presentation that relates to Exploration Results is based on information compiled by Dr Klaus Petersen who is a member of the Australasian Institute of Mining and Metallurgy and CREA. Dr Klaus Petersen is an employee of Orinoco Gold Limited and has sufficient experience, which is relevant to the style of mineralisation under consideration and to the activity that they are undertaking to qualify as a Competent Person as defined in the 2004 Edition of the Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves. Dr Klaus Petersen consents to the inclusion in this report of the matters based on the information in the form and context in which it appears.
Figure 1. Faina Greenstone belt showing Orinoco’s enlarged tenement package.
Figure 2. Location of historic holes targeting gold structures with mineralisation in the carbonate zone.
Figure 3. Interpreted cross section of the Cascavel Target showing alteration zones.
Figure 4. Eliseo Project. Table 1. Table of Results: Eliseo Scout Drilling.
Assays are screen fire assays undertaken by ALS Global on half diamond core.
Figure 5. Eliseo North Project showing location of rock chip samples, drill holes and shafts.
