OPERATION FOCUS- CASCAVEL_proof 23/08/2016 09:31 Page 2
OPERATION FOCUS
the nearby Mestre winze (90 m south) recorded
grades of 27 g/t Au (2.8 t) and 39 g/t Au (500 kg)
respectively.
While the coarse nature of the gold offers
many advantages in terms of low-cost processing
and recovery, it does make the task of resource
estimation within the JORC code incredibly
difficult. This is due to the very coarse nature of
the gold (80% > 100 μm) and the small volume
of sample that can be collected through diamond
drilling (approximately 8 kg/m HQ core).
Drilling provides a highly effective measure of
the geological continuity of the Cascavel system
but is not particularly useful for grade estimation
in such high-grade, coarse gold systems. As a
result, Orinoco has not quoted a JORC Mineral
Resource or production target for Cascavel.
However, it has undertaken a significant
amount of work at Cascavel since 2012, including
over 8,000 m of diamond drilling to delineate the
gold-bearing structures. This has been coupled
with extensive underground development, bulk
sampling and specific vein and alteration
sampling to provide an understanding of the
distribution of gold grades within this extensive
mineralised system.
Based on the nuggetty nature of the gold
mineralisation at Cascavel, the company decided
that the commencement of low-cost mining is
the most effective way to take the project
forward.
In a recent broker report from Breakaway
Research, Research Analysts Grant Craighead
and Mark Gordon noted that “development work
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has confirmed the geometry, continuity and
grade of the mineralisation, with the expected
diluted production grade of ~20 g/t Au
supported by some very high grades in the
development sampling.”
Orinoco currently holds a Guia de Utilização
(GU) for Cascavel, which allows the removal of
50,000 t of material from underground. The GU
can be continuously renewed until such time as
Cascavel is converted to a full mining lease,
which is expected to be completed in 2017. The
initial mine plan will encompass only a small
portion of the Cascavel and Mestre areas, where
limited historical mining and the company’s
exploration decline have opened up access to
high-grade shoots. This area has been tested by
diamond drilling, which enables accurate
location of the vein system and also contains the
old Cascavel exploration decline.
The main incline access is 3.5 m wide by 3 m
high, equipped for rail-bound ore haulage. The
skip and rail system delivers ore to surface which
is then truck-hauled about 300 m to the plant.
The system was locally designed by the Orinoco
engineering team, and manufactured by a local
company (Grupo Irmãos Haase). The rail line
does not extend beyond the foot of the decline,
with ore loaded in the stopes and trammed to
the decline and dumped in the skip using
Mustang 2054 skid steer loaders.
The standard load capacity of the Mustang
2054 is 750 kg. It is powered by a Yanmar Interim
Tier IV diesel engine. With radial-lift arm design,
it offers a lift height of 2.95 m. This unit has a
fast tramming speed up to 11 km/h. There is also