Orko Silver Corp. (CVE:OK) says it is has signed confidentiality agreements with several parties as its La Preciosa project in Mexico looks more and more attractive.
In a conference call to discuss the companys recently released increased mineral resource estimate for the La Preciosa silver project Tuesday, president Gary Cope said that the chances are pretty good that Orko wouldnt make it to the feasibility study stage of development, as it has signed confidentiality agreements with eight companies that are now conducting due diligence.
Cope didn’t disclose many details on the call due to the confidential nature of the agreements.
What I will say is that we are in constant talks with at least three or four of the eight companies with confidentiality agreements, Cope said during the call, adding that Orko would prefer an outright sale, as opposed to a joint venture with another partner.
Orko last week released an updated mineral resource estimate for its La Preciosa silver project in Durango, Mexico, that resulted in a 124-per-cent increase in the size of the open pit indicated resource and a 535-per-cent rise for the open pit inferred resource.
Orkos VP of exploration and director George Cavey said that a whopping 95 per cent of material is now accessible by open pit mining methods, which will reduce overall mining costs, and costs on a per ounce basis.
According to MiningPlus, who executed the resource report, there are a number of positive exploration options to expand resources at La Preciosa and further explore the 32,000-hectare project area.
Mining Plus VP of North American operations, Mike Collins, said during Tuesdays call that the increase in size of the La Preciosa resource makes it the largest pure silver project in Mexico.
The revised block model identified open pit indicated ounces of 110 million ounces of silver equivalent, up from 49 million ounces previously outlined in a 2011 preliminary economic assessment (PEA).
Additionally, the estimate identified open pit inferred ounces of 127 million ounces of silver equivalent, up from 20 million ounces in the 2011 PEA.
There is nothing that big in Mexico currently, in the pure silver sector, said Collins.
Orko said that the increase to the resource, paired with the changes to the conceptual approach to the mining of the deposit to include a Whittle Pit or superpit mining method, have resulted in the project being larger than most had expected making it even more attractive to potential buyers.
A Whittle Pit model provides mine optimization, which allows significant increases in project value over and above pit optimization.
The next steps for Orko include following up on recommendations made by the consulting firm, including a small drill program to test the potential for additional near surface resources along the east side of the deposit, and completing the PEA.
The open pit mineral resources for the La Preciosa project stand at 29.2 million tonnes grading an average of 117 grams per tonne (g/t) silver equivalent classified in the indicated category, with an additional 40.03 million tonnes grading an average of 98 g/t silver equivalent in the inferred category.
The resource is based on a 25 g/t silver cut-off grade and contained within two potentially economically mineable pit shells.
Underground mineral resources are 80,000 tonnes grading an average of 79 g/t silver equivalent in the indicated category, with an additional 2.9 million tonnes grading an average of 116 g/t silver equivalent in the inferred category.
This resource is based upon a 60 g/t silver cut-off grade to reflect the higher mining costs associated with underground mining methods.
While shares in Orko fell to $1.68 Tuesday afternoon, they are up almost eight per cent in the last month, and over 50 per cent in the last three months.
Orko Silver Corp. holds more than 32,000 hectares of mineral concessions on the Mesa Central, east of the Sierra Madre Occidental mountains, in the heart of the Mexican silver trend.
