After a long hiatus we finally have some assay results. Holes 9-12 assay results were released yesterday. The news is really good, the holes confirm what we know about the historical resource and also show expansion potential.
Lot of investors don’t understand the drilling program at Oroco. So far Oroco is really focused on providing the historical resource. The company has been using the historical data and the 3D IP information to guide its current drilling program. The thing that investors don’t understand is: (1) the drill results so far prove that the historical resource is there (incase some believed copper seep away over the past 2 decades); (2) the company has a 100% success rate on its first 12 holes; (3) the 3D IP is providing to be accurate; (4) the company has shown the resource extends beyond the historical.
The 100% success rate is huge. It is rare to see junior mining companies get 100% success rates over a decent number of holes. The company getting a perfect score over 12 holes is really good sign of the management team and the geological team at Oroco.
The drilling program so far shows the 3D IP data is good. This bodes really really well for expansion of the resource. The 3D IP data has shown the resource extends a lot in the North Zone, in Brasilles, and South Zone. So the initial drilling validating the 3D IP data is a good sign for expansion drilling.
Many investors see the 0.40% copper eq grade and say “ok, whatever.” The thing that many investors don’t realize is this is a huge resource. The size of this resource is enormous. The resource is close to surface, in a good mining district, accessible to transportation and ports, has access to good mining labor, and doesn’t have any major environmental issues. So getting a resource with this type of grade, at this size, and with all the mining benefits is very rate. On top of that you have lot of expansion potential.
The additional news in the press release that is glanced over by many is “the Company has now received the approvals necessary to begin drilling the western extension of the North Zone 3D IP model, thereby targeting a deeper tier of potential mineralization 300-400 m below the 2009 Gradeshell model”. This a major step forward in the drilling program. The western extension has a potential to substantially increase the resource size and potentially even have some good grade numbers.
So this drilling update is really good. We confirmed the historical resource and now we will likely start seeing results on the expansion. Don’t worry about the stock price. In this copper market the eyes (and money) will come as the drilling program expands the resource.