Welcome!

News Feed Item

Orvana Announces Decrease in Resources and Reserves at EVBC and Updates Life-of-Mine Plan

-- EVBC estimated mine life approximately four years with AISC of $1,100

TORONTO, ONTARIO -- (Marketwired) -- 08/13/14 -- Orvana Minerals Corp. ("Orvana" or the "Company") (TSX: ORV) announces that it has received updated mineral resources and reserves estimates (the "MRMR Update") for El Valle-Boinas/Carles ("EVBC") gold-copper mines in northern Spain, showing a year-over-year decrease in reserves and resources. The Company also received an updated life-of-mine plan (the "LOMP Update") using proven and probable mineral reserves reflecting a shortened mine life based on these updated reserves. The Company also announces that it expects to place the Carles Mine on care and maintenance by the end of 2014.

EVBC has had a record of under-performance against plan with respect to gold output. In 2014, Orvana initiated a review of past performance, including measures taken by previous and current management teams to enhance mine performance. As a result of this review, management deemed it appropriate to further assess the assumptions of previous mine plans, particularly in regard to reserves and resources, and engaged Roscoe Postle Associates Inc. ("RPA") to complete the MRMR Update and LOMP Update.

The MRMR Update and the LOMP Update revise certain assumptions used previously and present a different methodology with respect to the application of cut-off grades in certain zones of EVBC. Various other factors resulting in the changes include removal of uneconomic zones and depletion from mining activities since June 1, 2013.

"The reserve and resource reductions are disappointing. Orvana's decisions in response to these decreases and associated life-of-mine adjustments are difficult but necessary steps," said Michael Winship, President and CEO of Orvana. "Orvana will optimize production at Boinas Mine and will focus on producing only profitable ounces. Production will increase at Boinas, while the Carles Mine will be placed on care and maintenance by the end of 2014. We believe that these measures, coupled with the significant repayment of debt, will enable us to achieve improvements in free cash flow."

MRMR Update

The MRMR Update and the LOMP Update were prepared in accordance with National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101") by RPA, an independent mining consulting firm. RPA will be completing a NI 43-101 technical report with respect to the MRMR Update and the LOMP Update, which will be filed on SEDAR within 45 days.

The Company has most recently published mineral resources and reserves estimates for EVBC as at June 1, 2013 in its annual information form dated December 19, 2013 (the "2013 AIF").

The following is a summary of the MRMR Update with more detailed information set forth in Table 1 and Table 2 in the appendix to this press release:


--  Proven and Probable Reserves - approximately 2.2 million tonnes grading
    4.3 g/t gold and 0.7% copper, containing 302,000 ounces of gold and
    14,680 tonnes of copper, a decrease of approximately 66% and 59%,
    respectively;

--  Measured and Indicated Resources - approximately 6.0 million tonnes
    grading 4.4 g/t gold and 0.7% copper, containing 850,900 ounces of gold
    and 41,500 tonnes of copper, a decrease of approximately 32% and 22%,
    respectively; and

--  Inferred Resources - approximately 6.0 million tonnes grading 5.0 g/t
    gold and 0.5% copper, containing 979,500 ounces of gold and 26,900
    tonnes of copper, a decrease of approximately 22% and 5%, respectively.

LOMP Update

RPA completed the LOMP Update based on proven and probable reserves estimated as part of the MRMR Update which estimates mine life for EVBC at approximately four years compared with approximately nine years as previously disclosed. Total gold production is expected to be approximately 282,200 ounces at an average all-in-sustaining cost per ounce of gold sold of approximately $1,100 over the currently estimated mine life.

In addition, the inferred mineral resources are estimated to contain 979,500 gold ounces, providing opportunities to extend the mine life.

"Management will continue to focus on delineation drilling at EVBC, which historically has enabled us to convert mineral resources into reserves. We believe there is upside potential to extend EVBC's mine life beyond this current estimate," said Mr. Winship.

Carles Mine Suspension

Orvana plans to ramp down and put Carles on care and maintenance pending an improved economic mining plan or higher metal prices. In addition to executing on the new optimization plan, which has yielded improved results in recent months, the Company is also undertaking a review of alternatives. This includes evaluating narrow high-grade areas in Carles for more suitable mining methods and further exploration targeting certain zones and satellite deposits in the region.

EVBC Impairment

As a result of the MRMR Update and the Carles suspension and in accordance with its usual policy, Orvana conducted a carrying value assessment of EVBC as at June 30, 2014 and determined that EVBC's net recoverable amount was lower than its carrying amount. As a result, Orvana recognized a non-cash impairment loss in respect of EVBC of $25.5 million in the third quarter of fiscal 2014.

In a separate news release issued today, Orvana announced its operating and financial results as at and for the three and nine months ended June 30, 2014.

Orvana Strategy

In the context of the MRMR Update and the LOMP Update, Orvana is initiating a comprehensive strategic review of the Company and its asset base. This review will encompass the consideration of a number of possible outcomes for Orvana and its shareholders and may include exploration, asset transactions or a corporate transaction. Orvana will report on its progress in due course.

"We continue to build on the progress we have made in recent months," said Mr. Winship. "At the same time, and taking into account the updates to our mine operations, the Board together with management will thoughtfully and deliberately review our strategy for future growth and value creation."

Qualified Persons

The scientific and technical information contained in this press release has been reviewed and approved (i) in respect of the estimated mineral reserves and the LOMP Update by Jason Cox, P.Eng., of RPA, and (ii) in respect of the estimated mineral resources by Sean Horan, P.Geo., of RPA. RPA is an independent mining consultant and each of Messrs. Cox and Horan is a Qualified Person within the meaning of NI 43-101.

About Orvana

Orvana Minerals is a multi-mine gold and copper producer. Orvana's operating assets consist of the EVBC gold-copper mines in northern Spain and copper-gold-silver Don Mario Mine in Bolivia. Additional information is available at Orvana's website (www.orvana.com).

Forward Looking Disclaimer

Certain statements in this press release constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as "believes", "expects" "plans", "estimates" or "intends" or stating that certain actions, events or results "may", "could", "would", "might", "will" or "are projected to" be taken or achieved) are not statements of historical fact, but are forward-looking statements.

The forward-looking statements herein relate to, among other things, Orvana's ability to achieve improvement in free cash flow; the potential to extend EVBC's mine life beyond the life of mine estimate set forth herein; Orvana's ability to optimize its assets to deliver shareholder value; Orvana's ability to optimize production at Boinas; the expected costs associated with the suspension of mining activities at Carles; the Company's ability to emerge stronger from the turnaround work executed at EVBC in 2014; estimates of future production, operating costs and capital expenditures; mineral resource and reserve estimates; statements and information regarding future feasibility studies and their results; future transactions; future metal prices; the ability to achieve additional growth and geographic diversification; future financial performance, including the ability to increase cash flow and profits; future financing requirements; and mine development plans.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Orvana as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of Orvana contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in the Company's most recently filed Management's Discussion & Analysis and Annual Information Form in respect of the Company's most recently completed fiscal year (the "Company Disclosures"), or as otherwise expressly incorporated herein by reference as well as: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the EVBC and Don Mario Mines being consistent with the Company's current expectations; political developments in any jurisdiction in which the Company operates being consistent with its current expectations; certain price assumptions for gold, copper and silver; prices for key supplies being approximately consistent with current levels; production and cost of sales forecasts meeting expectations; the accuracy of the Company's current mineral reserve and mineral resource estimates; and labour and materials costs increasing on a basis consistent with Orvana's current expectations.

A variety of inherent risks, uncertainties and factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its business, and could cause actual events or results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include fluctuations in the price of gold, silver and copper; the need to recalculate estimates of resources based on actual production experience; the failure to achieve production estimates; variations in the grade of ore mined; variations in the cost of operations; variations in the costs associated with the suspension of mining at Carles; the availability of qualified personnel; the Company's ability to obtain and maintain all necessary regulatory approvals and licenses; the Company's ability to use cyanide in its mining operations; risks generally associated with mineral exploration and development, including the Company's ability to continue to operate the EVBC Mines and/or the Don Mario Mine; the Company's ability to acquire and develop mineral properties and to successfully integrate such acquisitions; the Company's ability to obtain financing when required on terms that are acceptable to the Company; the Company's ability to execute on its strategy; challenges to the Company's interests in its property and mineral rights; current, pending and proposed legislative or regulatory developments or changes in political, social or economic conditions in the countries in which the Company operates; general economic conditions worldwide; and the risks identified in the Company Disclosures under the heading "Risks and Uncertainties". This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements and reference should also be made to the Company Disclosures for a description of additional risk factors.

Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements.

Cautionary Notes to Investors - Reserve and Resource Estimates

In accordance with applicable Canadian securities regulatory requirements, all mineral reserve and mineral resource estimates of the Company disclosed in this news release have been prepared as at September 30, 2014 in accordance with Canadian National Instrument 43-101 - Standards of Disclosure for Mineral Projects ("NI 43-101"), classified in accordance with Canadian Institute of Mining Metallurgy and Petroleum's "CIM Standards on Mineral Resources and Reserves Definitions and Guidelines" (the "CIM Guidelines").

Pursuant to the CIM Guidelines, mineral resources have a higher degree of uncertainty than mineral Reserves as to their existence as well as their economic and legal feasibility. Inferred mineral resources, when compared with measured or indicated mineral resources, have the least certainty as to their existence, and it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration. Pursuant to NI 43-101, inferred mineral resources may not form the basis of any economic analysis, including any feasibility study. Accordingly, readers are cautioned not to assume that all or any part of a mineral resource exists, will ever be converted into a mineral Reserve, or is or will ever be economically or legally mineable or recovered.



                                  APPENDIX
                                   TABLE 1
            Orvana - Updated EVBC Mineral Resource Estimate (1)
----------------------------------------------------------------------------
                       EVBC Inclusive Mineral Resource Estimate as at Sept.
ZONE                                        30th, 2014
                      ------------------------------------------------------
                                      Au       Cu       Ag       Au       Cu
                         Tonnes    Grade    Grade    Grade   Ounces   Tonnes
                           (kt)    (g/t)      (%)    (g/t)    (koz)      (t)
----------------------------------------------------------------------------
Boinas Oxide                638     4.42     1.05    25.01       91    6,707
Boinas Skarn                666     2.79     0.78    16.58       60    5,201
Carles Skarn                 38     4.55     0.68     5.26        6      258
----------------------------------------------------------------------------
Total Measured            1,342     3.62     0.91    20.27      156   12,166
----------------------------------------------------------------------------
Boinas Oxide              1,835     6.76     0.80    13.47      399   14,687
Boinas Skarn              1,770     3.16     0.58    14.40      180   10,333
Carles Skarn              1,059     3.40     0.41     6.22      116    4,312
----------------------------------------------------------------------------
Total Indicated           4,664     4.63     0.63    12.18      695   29,332
----------------------------------------------------------------------------
Total Measured &
 Indicated                6,006     4.41     0.69    13.98      851   41,498
----------------------------------------------------------------------------
Boinas Oxide              2,499     7.16     0.46     3.63      575   11,414
Boinas Skarn              2,135     3.35     0.45    12.27      230    9,515
Carles Skarn              1,393     3.90     0.43     4.12      175    5,957
----------------------------------------------------------------------------
Total Inferred            6,027     5.05     0.45     6.80      980   26,886
----------------------------------------------------------------------------

Notes:


1.  Canadian Institute of Mining, Metallurgy and Petroleum ("CIM")
    definitions were followed for estimated mineral resources.
2.  Mineral resources are estimated using gold equivalent cut-off grade by
    zone, consisting of 3.8 g/t AuEq for Boinas Oxides, 2.5 g/t AuEq for
    Boinas Skarns, and 2.3 g/t AuEq for Carles. Gold equivalent cut-offs
    were calculated using recent operating results for recoveries, off-site
    concentrate costs, and on-site operating costs.
3.  Mineral resources are estimated using average long-term metal prices of
    US$1,300 per ounce gold, US$3.10 per pound copper, and US$23 per ounce
    silver. An exchange rate of EUR1.00=US$1.33 was used.
4.  A crown pillar of 10 meters is excluded from the estimated mineral
    resources below El Valle open pit.
5.  Unrecoverable material in exploited mining areas has been excluded from
    the estimated mineral resources.
6.  Numbers may not add due to rounding.

                                   TABLE 2
             Orvana - Updated EVBC Mineral Reserve Estimate (1)
----------------------------------------------------------------------------
                       EVBC Mineral Reserve Estimate as at Sept. 30th, 2014
                      ------------------------------------------------------
                                      Au       Cu       Ag       Au       Cu
                         Tonnes    Grade    Grade    Grade   Ounces   Tonnes
ZONE                       (kt)    (g/t)      (%)    (g/t)    (koz)      (t)
----------------------------------------------------------------------------
Boinas Oxide                  -        -        -        -        -        -
Boinas Skarn                467     3.36     0.96    20.33       50    4,484
Carles Skarn                  -        -        -        -        -        -
----------------------------------------------------------------------------
Total Proven                467     3.36     0.96    20.33       50    4,484
----------------------------------------------------------------------------
Boinas Oxide                598     6.83     0.41     7.31      131    2,464
Boinas Skarn              1,029     3.39     0.72    14.39      112    7,375
Carles Skarn                 95     2.63     0.37     7.30        8      354
----------------------------------------------------------------------------
Total Probable            1,722     4.54     0.59    11.54      252   10,193
----------------------------------------------------------------------------
Total Proven &
 Probable                 2,189     4.29     0.67    13.41      302   14,677
----------------------------------------------------------------------------

Notes:


1.  CIM definitions were followed for Mineral Reserves.
2.  Mineral Reserves are estimated using gold equivalent cut-off grades by
    zone, consisting of 4.5 g/t AuEq for Boinas Oxides, 2.9 g/t AuEq for
    Boinas Skarns, and 2.8 g/t AuEq for Carles. Gold equivalent cut-offs
    were calculated using recent operating results for recoveries, off-site
    concentrate costs, and on-site operating costs.
3.  Mineral Reserves are estimated using average long-term metal prices of
    US$1,100 per ounce gold, US$2.75 per pound copper, and US$20 per ounce
    silver. An exchange rate of EUR1.00=US$1.33 was used.
4.  Numbers may not add due to rounding.

More Stories By Marketwired .

Copyright © 2009 Marketwired. All rights reserved. All the news releases provided by Marketwired are copyrighted. Any forms of copying other than an individual user's personal reference without express written permission is prohibited. Further distribution of these materials is strictly forbidden, including but not limited to, posting, emailing, faxing, archiving in a public database, redistributing via a computer network or in a printed form.

Latest Stories
Fact is, enterprises have significant legacy voice infrastructure that’s costly to replace with pure IP solutions. How can we bring this analog infrastructure into our shiny new cloud applications? There are proven methods to bind both legacy voice applications and traditional PSTN audio into cloud-based applications and services at a carrier scale. Some of the most successful implementations leverage WebRTC, WebSockets, SIP and other open source technologies. In his session at @ThingsExpo, Da...
Technology vendors and analysts are eager to paint a rosy picture of how wonderful IoT is and why your deployment will be great with the use of their products and services. While it is easy to showcase successful IoT solutions, identifying IoT systems that missed the mark or failed can often provide more in the way of key lessons learned. In his session at @ThingsExpo, Peter Vanderminden, Principal Industry Analyst for IoT & Digital Supply Chain to Flatiron Strategies, will focus on how IoT de...
SYS-CON Events announced today that China Unicom will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. China United Network Communications Group Co. Ltd ("China Unicom") was officially established in 2009 on the basis of the merger of former China Netcom and former China Unicom. China Unicom mainly operates a full range of telecommunications services including mobile broadband (GSM, WCDMA, LTE F...
SYS-CON Events announced today that Roundee / LinearHub will exhibit at the WebRTC Summit at @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. LinearHub provides Roundee Service, a smart platform for enterprise video conferencing with enhanced features such as automatic recording and transcription service. Slack users can integrate Roundee to their team via Slack’s App Directory, and '/roundee' command lets your video conference ...
DevOps at Cloud Expo, taking place Nov 1-3, 2016, at the Santa Clara Convention Center in Santa Clara, CA, is co-located with 19th Cloud Expo and will feature technical sessions from a rock star conference faculty and the leading industry players in the world. The widespread success of cloud computing is driving the DevOps revolution in enterprise IT. Now as never before, development teams must communicate and collaborate in a dynamic, 24/7/365 environment. There is no time to wait for long dev...
Almost two-thirds of companies either have or soon will have IoT as the backbone of their business in 2016. However, IoT is far more complex than most firms expected. How can you not get trapped in the pitfalls? In his session at @ThingsExpo, Tony Shan, a renowned visionary and thought leader, will introduce a holistic method of IoTification, which is the process of IoTifying the existing technology and business models to adopt and leverage IoT. He will drill down to the components in this fra...
There is growing need for data-driven applications and the need for digital platforms to build these apps. In his session at 19th Cloud Expo, Muddu Sudhakar, VP and GM of Security & IoT at Splunk, will cover different PaaS solutions and Big Data platforms that are available to build applications. In addition, AI and machine learning are creating new requirements that developers need in the building of next-gen apps. The next-generation digital platforms have some of the past platform needs a...
Without a clear strategy for cost control and an architecture designed with cloud services in mind, costs and operational performance can quickly get out of control. To avoid multiple architectural redesigns requires extensive thought and planning. Boundary (now part of BMC) launched a new public-facing multi-tenant high resolution monitoring service on Amazon AWS two years ago, facing challenges and learning best practices in the early days of the new service. In his session at 19th Cloud Exp...
I'm a lonely sensor. I spend all day telling the world how I'm feeling, but none of the other sensors seem to care. I want to be connected. I want to build relationships with other sensors to be more useful for my human. I want my human to understand that when my friends next door are too hot for a while, I'll soon be flaming. And when all my friends go outside without me, I may be left behind. Don't just log my data; use the relationship graph. In his session at @ThingsExpo, Ryan Boyd, Engi...
Information technology is an industry that has always experienced change, and the dramatic change sweeping across the industry today could not be truthfully described as the first time we've seen such widespread change impacting customer investments. However, the rate of the change, and the potential outcomes from today's digital transformation has the distinct potential to separate the industry into two camps: Organizations that see the change coming, embrace it, and successful leverage it; and...
SYS-CON Events announced today that Numerex Corp, a leading provider of managed enterprise solutions enabling the Internet of Things (IoT), will exhibit at the 19th International Cloud Expo | @ThingsExpo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. Numerex Corp. (NASDAQ:NMRX) is a leading provider of managed enterprise solutions enabling the Internet of Things (IoT). The Company's solutions produce new revenue streams or create operating...
While DevOps promises a better and tighter integration among an organization’s development and operation teams and transforms an application life cycle into a continual deployment, Chef and Azure together provides a speedy, cost-effective and highly scalable vehicle for realizing the business values of this transformation. In his session at @DevOpsSummit at 19th Cloud Expo, Yung Chou, a Technology Evangelist at Microsoft, will present a unique opportunity to witness how Chef and Azure work tog...
Data is an unusual currency; it is not restricted by the same transactional limitations as money or people. In fact, the more that you leverage your data across multiple business use cases, the more valuable it becomes to the organization. And the same can be said about the organization’s analytics. In his session at 19th Cloud Expo, Bill Schmarzo, CTO for the Big Data Practice at EMC, will introduce a methodology for capturing, enriching and sharing data (and analytics) across the organizati...
SYS-CON Events announced today that Secure Channels will exhibit at the 19th International Cloud Expo, which will take place on November 1–3, 2016, at the Santa Clara Convention Center in Santa Clara, CA. The bedrock of Secure Channels Technology is a uniquely modified and enhanced process based on superencipherment. Superencipherment is the process of encrypting an already encrypted message one or more times, either using the same or a different algorithm.
The vision of a connected smart home is becoming reality with the application of integrated wireless technologies in devices and appliances. The use of standardized and TCP/IP networked wireless technologies in line-powered and battery operated sensors and controls has led to the adoption of radios in the 2.4GHz band, including Wi-Fi, BT/BLE and 802.15.4 applied ZigBee and Thread. This is driving the need for robust wireless coexistence for multiple radios to ensure throughput performance and th...