Orovero Resources Signs Letter of Intent for Strategic Toll Milling Partnership
October 23 2013 - 9:29AM
Access Wire
Orovero Resources Corp. (formerly Golden
Alliance Resources Corp.) (TSX-V: OVR, Frankfurt: GA0, "Orovero"
or the "Company") has signed a
letter of intent to enter into an arrangement ("Partnership") to
partner with a Peruvian-based gold mining company ("Partner") with
hands-on expertise in small-scale gold processing. Under the
Partnership, the Company will fund the development of a toll
milling operation and the Partner will provide management expertise
that will include identifying existing milling facilities for
purchase, acquisition and permitting, construction, financing,
systems management, procurement of ore, and commissioning. The
Company will initially have a 100% interest in the Partnership
while the Partner will maintain an option to acquire 20% of the
Partnership for 24 months post-commissioning. The Company will
maintain operational control of the Partnership and will be
overseen in part, by lead advisory board member Mr. Carlos Mirabal,
who has extensive experience in this process.
"The toll milling
business has been chronically underfunded for centuries and has
emerged as an activity dominated by the underground economy. Under
a new legislative mandate enacted in March 2012, the Peruvian
government has unveiled an entirely new regulatory system for small
mining. This has resulted in significant new demand for legally
compliant ore-processing facilities and our new partnership will
allow us to immediately capitalize on this. The opportunity for
toll milling is immense and we look forward to working closely with
our new Partner. In a market where the junior exploration model is
broken and companies are simply looking for ways to survive, I
believe we have found a way to not only survive but to prosper,"
stated Len Clough, Orovero President and CEO.
Formalization
Mandate
The Peruvian
government has undertaken some significant measures to address
illegal mining and has proposed a process of formalization
specifically addressing the small and artisanal miners. Under the
new legislative mandate, small miners will only be allowed to
conduct exploitation activities on land in which they have
registered with the mining authorities. Furthermore, legislation
requires milling operations to only process "legal" ore, being ore
that comes from permitted concessions. It is estimated that
informal (illegal) mining could account for up to 20% of the
country's annual output of 161 tons of gold produced.
The
Partnership
The Partnership's
objective is to develop an initial operation with throughput
capacity of approximately 50 tonnes per day with the ability to
expand beyond that. Surveying efforts have already commenced to
identify a suitable mill for acquisition, utilizing the existing
network of our new Partner. Initial plans involve an extensive
capital investment plan into the facility, upon acquisition, to
improve efficiency and throughput capabilities. 'Legal' ore will
then be sourced for purchase, through a logistics team who
specialize in this field and have developed a network of
relationships with neighbouring miners. The Company will look to
establish contracts for delivery to ensure steady mill feed. The
Company will also establish an 'ore-purchase' office which can
purchase ore for its inventory which can then be used for blending
purposes. Prior to processing, the Company negotiates a fee with
the miner, based on a certain formula, where volume and grade are
the two most important factors. Spot gold pricing plays a very
small role and consequently, the toll milling business acts like a
utility with predictable cash flow and low commodity risk.
Furthermore, the absence of direct mining risk also provides
significant advantages to the business model.
About Orovero
Resources Corp.
Orovero is a company
focused on pursuing near term production opportunities with cash
flow. The Company is working in partnership to develop its first
gold toll milling operation in Peru with a goal of becoming Peru's
processor of choice with multiple facilities processing in excess
of 1000 tons per day. In addition, the Company has a portfolio of
highly prospective exploration properties including its' flagship
property called Rio Tabaconas located in Northern Peru.
ON BEHALF OF THE BOARD
"Len Clough"
_______________________________________
Mr. Len Clough, Chairman, President, CEO and
Director
For further information please contact:
Mr. Shawn Perger, Corporate Communications
Tel: 1-604-687-1828
Toll-Free: 1-800-901-0058
Email: info@oroveroresources.com
Neither TSX
Venture Exchange nor its Regulation Services Provider (as that term
is defined in policies of the TSX Venture Exchange) accepts
responsibility for the adequacy or accuracy of this release.
This news release
may contain forward-looking statements including but not limited to
comments regarding the timing and content of upcoming work
programs, geological interpretations, receipt of property titles,
potential mineral recovery processes, etc. Forward-looking
statements address future events and conditions and therefore
involve inherent risks and uncertainties. Actual results may differ
materially from those currently anticipated in such statements.
Readers are encouraged to refer to the Company's public disclosure
documents for a more detailed discussion of factors that may impact
expected future results. The Company undertakes no obligation to
publicly update or revise any forward-looking statements. We advise
U.S. investors that the SEC's mining guidelines strictly prohibit
information of this type in documents filed with the SEC. U.S.
investors are cautioned that mineral deposits on adjacent
properties are not indicative of mineral deposits on our
properties.
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