CAPITAL MARKETS

Orinoco gets funds to fast track second Brazil gold project

Brazil gold junior Orinoco has secured up to A$8 million in a convertible note to fast track development of the historic Sertao operation previously mined by Troy Resources.

Michael Quinn
 Orinoco focusing hard on trying to develop a viable gold mining business in Brazil

Orinoco focusing hard on trying to develop a viable gold mining business in Brazil

Now known as Rio do Ouro, the project is said to be in the final stages of licensing approval.

Under the convertible note agreement reached with a firm called Magna, $2 million is immediately available, with the rest of the funding available over the next 12 months at Orinoco's discretion.

Magna has the right to convert at a 10% discount, while Orinoco can repay at 110-115% of the face value depending on duration.

Orinoco believes Rio Do Ouro has the potential "to become a natural hub for other nearby potential mines at Antena and Digo Digo (and making it central) to (the company's) short and medium term growth plans outside of Cascavel".

Rio Do Ouro is 28km by road from Orinoco's Cascavel project and has an existing JORC resource estimate of 223,111 tonnes at 6.9 grams per tonne for 49,268 ounces of gold.

A series of openpits mined by Troy between 2002-2006 produced 256,000oz at an average grade of 25gpt.

The planned work at Rio Do Ouro comes as relatively recently installed board and management at Orinoco continue their efforts to put Cascavel on a sustainable production footing.

Last quarter Cascavel produced 219oz, with operations impacted by a trucking strike in Brazil.

Earlier this month the company hosted a four-day investor tour to Orinoco's prospects.

Shares in Orinoco (ASX: OGX) were down nearly 5% to 4.1c in early trade, capitalising the company at $42 million.

The stock rose from 2c last December to 13.5c in April.

 

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