Orinoco raises $4.5m, Cascavel to pour first gold at month-end

JOHANNESBURG (miningweekly.com) – Sydney-listed Orinoco Gold has received firm commitments to raise $4.5-million through an institutional share placement to strengthen its balance sheet and provide it with financial flexibility ahead of the production ramp-up at the Cascavel gold mine, in Brazil.

The proceeds of the placement would also enable Orinoco to start planning growth initiatives aimed at expanding the production profile of Cascavel, the company reported on Friday.

Perth-based Somers & Partners acted as the lead manager and broker to the placement.

In addition to welcoming well-respected Australian institutional investors to the register, Orinoco’s funding partner at Cascavel, the Cartesian Group, also participated in the placement, which the firm said reflected the US private equity group’s confidence in the future of the Cascavel mine and Orinoco.

The funds would ensure that Orinoco had a strong working capital buffer in place ahead of the ramp-up of commercial gold production. Cash at bank as at June 30, 2016, was A$3.3-million.

Orinoco would also accelerate mine definition drilling at Cascavel to confirm recently identified extensions to the main Cascavel gold system, which could be accessed from the existing underground infrastructure. It would also accelerate drilling, targeting potential extensions of the system and parallel outcropping gold lode structures, and it planned to undertake bulk sampling at the Cuca prospect, 350 m north of Cascavel.

Meanwhile, Orinoco reported that dry commissioning of the gravity processing plant at Cascavel had been successfully completed with all key mechanical and electrical components operating according to design specifications and no significant issues encountered.

The wet commissioning process was under way with low-grade development material to be introduced into the processing circuit this weekend for the first time. In addition to several thousand tonnes of low-grade development material, parcels of production ore would be run through the plant in batches over the coming weeks to conclude the commissioning process prior to production build-up.

Technical representatives from the plant manufacturers, Gekko Systems and Simplex Equipamentos, together with a Canadian engineering consulting company JDS Energy & Mining, with specialist Brazilian expertise in gravity processing plants, were currently on site and assisting the Orinoco team with the commissioning process.

Orinoco said it expected its initial gold pour towards the end of July.