Oromin Explorations Ltd. |
2000 – 1055 West Hastings Street, Vancouver, B.C. V6E 2E9 |
Phone: (604) 331-8772 Fax: (604) 331-8773 |
March 6, 2013
SECURITIES AND EXCHANGE COMMISSION | VIA EDGAR |
Judiciary Plaza Office Building | |
450 Fifth Street, N.W. | |
Washington, D.C. 20549 |
Dear Sir or Madam:
RE: | Oromin Explorations Ltd. - (File #0-30614) |
Form 6-K |
On behalf of Oromin Explorations Ltd., a corporation under the laws of British Columbia, Canada, we enclose for filing, one (1) copy of Form 6-K, including exhibits.
If you have any questions, please contact the undersigned at your convenience.
Very truly yours,
OROMIN EXPLORATIONS LTD.
“Chet Idziszek”
per: | Chet Idziszek |
President |
Enclosures
cc: | Miller Thomson, Attn: Mr. Peter McArthur |
OMB APPROVAL | ||
UNITED STATES |
OMB Number: 3235-0116 | |
SECURITIES AND EXCHANGE COMMISSION |
Expires: March 31, 2014 | |
Washington, D.C. 20549 |
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Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For the month of February 2013
Commission File Number 0-30614
OROMIN EXPLORATIONS LTD.
(Translation of registrant’s name into English)
Suite 2000, 1055 West Hastings St., Vancouver, B.C., Canada, V6E 2E9
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or 40-F.
Form 20-F [ X ] Form 40-F [ ]
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):_____
Note: Regulation S-T rule 101(b)(1) only permits the submission in paper of a Form 6-k if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): _____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a From 6-K submission or other Commission filing on EDGAR.
Exhibit
99.1 | |
99.2 | Form 51-102F3 Material Change Report |
99.3 | Form 51-102F3 Material Change Report |
99.4 | Form 51-102F3 Material Change Report |
99.5 | News Release dated February 21, 2013 |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
OROMIN EXPLORATIONS LTD. (Registrant) | ||
Date: March 6, 2013 | By | ”Chet Idziszek” |
Chet Idziszek, President |
Persons who are to respond to the collection of information contained in this form are not required to respond unless the form displays a currently valid OMB control number.
SEC 1815(04-09)
Exhibit 99.1
Suite 2000 - 1055 West Hastings Street, Vancouver, B.C., V6E 2E9 Canada | |
T: +1.604. 331.8772 Toll Free 1.877.529.8475 F: +1.604.331.8773 E: info@oromin.com W: www.oromin.com |
February 1, 2013 | Trading Symbol: TSX – OLE |
OTC/BB – OLEPF | |
Website: www.oromin.com |
OROMIN FINALIZES $5 MILLION CREDIT FACILITY
Vancouver, B.C. – Oromin Explorations Ltd. (the “Company”) is pleased to announce that, further to its news release dated December 21, 2012, it has entered into a credit agreement dated January 31, 2013 with Sprott Resource Lending Partnership (“Sprott Lending”) pursuant to which Sprott Lending is to provide the Company with a $5 million credit facility (the “Facility”). The credit agreement replaces the previously announced term sheet. As of today’s date, Oromin has received a total of $1,800,000 pursuant to the first two advances under the Facility.
The one year Facility will bear interest at 12% per annum, compounded and payable monthly. In consideration for the Facility, Sprott Lending has been paid a structuring fee of $50,000 and been issued 750,000 common shares of the Company at a deemed price of $0.75 per share. Of these shares, 375,000 have been released to Sprott Lending, with balance being subject to escrow pending the completion of further advances under the Facility. The common shares will be subject to a four month hold period. All amounts outstanding under the Facility will be repayable in the event of a change of control of the Company. The Facility will be secured by a fixed and floating charge and specific registration over all of the assets of the Company.
The Facility will be used for the development of the OJVG project as well as for general corporate purposes. Toll Cross Securities Inc. provided financial consulting services in connection with the Facility.
To find out more about Oromin Explorations Ltd., visit www.oromin.com.
On behalf of the Board of Directors of
OROMIN EXPLORATIONS LTD.
“Chet Idziszek”
Chet Idziszek, President and CEO
Forward Looking Statements: The above contains forward-looking statements regarding a credit facility. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in the Management Discussion and Analysis of the Company. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
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Exhibit 99.2
Form 51-102F3
Material Change Report
Item 1 | Name and Address of Company |
Oromin Explorations Ltd. |
Suite 2000, 1055 West Hastings Street |
Vancouver, BC V6E 2E9 |
Item 2 | Date of Material Change |
January 31, 2013
Item 3 | News Release |
The news release was disseminated on January 31, 2013.
Item 4 | Summary of Material Change |
The Company, on behalf of Oromin Joint Venture Group Ltd., announced positive results of its 2013 Carbon-in-Leach Feasibility Study and a mineral reserve update for its OJVG Gold Project in Senegal, West Africa.
Item 5 | Full Description of Material Change |
See attached news release.
Item 6 | Reliance on subsection 7.1(2) or (3) of National Instrument 51-102 |
Not Applicable
Item 7 | Omitted Information |
None
Item 8 | Executive Officer |
The following executive officer of the Company is knowledgeable about the material change and may be contacted regarding the change:
James Stewart |
Secretary |
Telephone: 604.331.8772 |
Facsimile: 604.331.8773 |
DATED: | February 4, 2013 |
Suite 2000 - 1055 West Hastings Street, Vancouver, B.C., V6E 2E9 Canada | |
T: +1.604. 331.8772 Toll Free 1.877.529.8475 F: +1.604.331.8773 E: info@oromin.com W: www.oromin.com |
January 31, 2013 | Trading Symbol: TSX – OLE |
OTC/BB – OLEPF |
OROMIN ANNOUNCES ROBUST CIL FEASIBILITY STUDY RESULTS AT THE OJVG GOLD PROJECT IN SENEGAL
The management and technical team of Oromin Explorations Ltd. (“Oromin” or the “Company”), on behalf of Oromin Joint Venture Group Ltd. (“OJVG”), is extremely pleased to announce the positive results of its 2013 Carbon-in-Leach (“CIL”) Feasibility Study (“FS”) and Mineral Reserve update for its OJVG Gold Project (“the “Project”) in Senegal, West Africa. The FS was compiled by SRK Consulting (Canada) Ltd. (“SRK”). All figures are in US Dollars.
HIGHLIGHTS
Net present value (“NPV”) pre-tax of $740 million and after-tax of $558 million at a 5% discount rate and evaluation price of $1550 per ounce of gold, generating an after-tax internal rate of return (“IRR”) of 27.7% with a 23 month payback
Average annual gold production for first three years of full production at 182,000 payable ounces per year at a $489 operating cash cost per ounce
Average annual life of mine (“LOM”) gold production of 144,000 ounces per full milling year at an LOM operating cash cost of $654 per ounce
Open pit and underground gold mining complex with a current mine life of 17 years
Probable mineral reserves increase by 64% to 2.335 million ounces of contained gold since the 2010 FS - the OJVG Gold Project now hosts the largest gold reserve in Senegal
Average LOM gold recovery of 90.8%
Estimated start-up capital cost of $ 297.1 million, including $ 27.9 million contingency
All capital and operating expenditures in the FS have been updated to Q1 2013
It is Oromin’s view that with all deposits remaining open to possible expansion, along with the potential for upgrading of the Project’s remaining indicated and inferred resources, future plant expansion and increased annual gold production may be realized
Granting of a 15 year renewable mining licence, receipt of the Government of Senegal approved Environmental and Social Impact Assessment (ESIA) and the formation of a Senegalese operating company (Somigol) paves the way for the development of Senegal’s next gold mine
Optimization towards further enhancing Project economics is ongoing, including studying the mine production schedule with elevated cut-off strategies to create low- grade stockpiles as well as a plant expansion
The FS does not include the results of the upcoming January 2013 Preliminary Economic Assessment (“PEA”) of the Project’s heap leach deposits which have potential to outline additional contained gold ounces within the Project.
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Project Summary
The Project will be developed by both open pit and underground mining methods, with ore trucked from four deposits to a central plant for crushing, grinding and carbon-in-leach recovery processing. Heap leach processing of a portion of the total contained ounces at the project will be addressed in an updated heap leach PEA to be announced following this release.
The mine plans envisioned within the FS are based on probable mineral reserves of 28.0 million tonnes at a grade of 2.59 g/t containing 2.335 million ounces of gold which will be mined over a 17 year mine life. The current average annual production for the first 3 years is approximately 182,000 ounces of gold per year at an average operating cost of $489 per ounce and for the LOM, approximately 144,000 ounces of gold per year at an average operating cost of $654 per ounce. The total pre-production capital cost is estimated to be $297.1 million, including a $27.9 million contingency.
Throughput rates will vary between 4,500 and 7,500 tonnes per day based on the ratio of oxide and sulphide ore being processed. Larger daily throughput volumes, based on the increased percentage of the softer oxide ore, positively enhance the economics. The plant has been designed with sufficient flexibility for treatment of all ore types.
The financial modeling for the OJVG Gold Project indicates robust economics. At a gold price of $1,550 per ounce, the operation yields a positive after-tax NPV of $558 million at a 5% discount rate. The after-tax IRR is 27.7 % and payback is 23 months from initial gold production.
Additional Opportunities
Exploration potential remains excellent, both at the known gold deposits, which all remain open to possible further expansion, and throughout the entirety of the remaining Project area. This significant exploration upside could potentially support future plant expansion, increased throughput capacity, extended mine life and increased annual gold production.
At the Masato deposit the indicated resource is open to further expansion both laterally and to depth, and additional geotechnical drilling may enhance the opportunity to upgrade the status of this existing indicated resource to reserves. An additional inferred resource of 127,600 gold ounces (3.5 Mt grading 1.13 g/t Au) has also been defined at the Masato deposit which may similarly be upgraded with further drilling. Further, Masato remains open to potential expansion beyond these presently outlined resources.
Similarly, at the Golouma deposit, an inferred resource of 601,000 gold ounces (5.5 Mt grading 3.43g/t Au) has been identified. Additional closer-spaced drilling evaluation of this higher-grade mineralization may upgrade this mineralization beyond its current inferred designation. As with Masato, the Golouma deposit remains open to further potential expansion both laterally and to depth.
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Note: The quantity and grade of reported Inferred resources in this estimation are uncertain in nature and there has been insufficient exploration to define these Inferred resources as an Indicated or Measured mineral resource and it is uncertain if further exploration will result in upgrading them to an Indicated or Measured mineral resource category.
Future optimization evaluations of the current heap leach-designated deposits may further enhance the potential mill feed, as many of these deposits have gold grades compatible with the CIL design. The Company will be issuing a news release updating the 2011 heap leach PEA, separately today following this release. This heap leach PEA will represent an incremental development opportunity at the Project over and above the CIL feasibility study discussed herein.
Furthermore, more than a dozen additional exploration targets and prospects have been the focus of more recent exploration activities throughout 2011 and 2012. Combining the volume expansion opportunities recognized at each of the known deposits with the exploration upside of these numerous early stage discoveries supports the potential for significant resource expansion at the Project.
Reserves and Resources
SRK Mineral Reserve Estimate for the 2013 FS Update
The mineral reserve estimate representing the four deposits used in the FS production schedule for the OJVG Gold Project has been subdivided into an open pit portion and an underground portion as summarized in Table 1 below. The mineral reserves established for the Project are based only on the indicated mineral resources of the Masato and three Golouma deposits as outlined in the current resource summary announced in the Company’s news release dated October 1, 2012 and shown in Table 3.
The probable mineral reserve estimate of 28.0 million tonnes at a grade of 2.59 g/t gold containing 2.335 million ounces of gold has been calculated based on a gold price of $1,250 per ounce. Mine design and cut-off grade determination were undertaken using industry standard processes and software along with estimated cost assumptions. The production schedule forming the basis of the mineral reserves was then modelled in a discounted cash flow model, taking into account the capital costs estimates and evaluated based on the pit design price of $1,250. Based on the foregoing, the project demonstrated a post-tax NPV at 5% discount rate of $252 million, thus demonstrating the economic viability of these Mineral Reserves at the pit design price and given the contemplated cost assumptions.
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Table 1: Combined CIL Open Pit and Underground Mineral Reserves
Diluted | Cut-off | Diluted | Contained | ||
Deposit | Reserve | Tonnes | Grade | Grade | Gold Ounces |
Class | ('000s) | (g/t) | (g/t) | (‘000s) | |
OPEN PIT RESERVES | |||||
Masato | Probable | ||||
Oxide |
6,202 | 0.51 | 1.47 | 293 | |
Sulfide |
12,785 | 0.88 | 2.26 | 930 | |
Golouma W, S, NW | Probable | ||||
Oxide |
602 | 0.52 | 2.11 | 41 | |
Sulfide |
2,267 | 0.89 | 2.37 | 173 | |
Kerekounda | Probable | ||||
Oxide |
26 | 0.52 | 5.60 | 5 | |
Sulfide |
7 | 0.90 | 12.01 | 3 | |
Total Open Pit Oxide | Probable | 6,830 | variable | 1.54 | 339 |
Total Open Pit Sulphide | Probable | 15,059 | variable | 2.28 | 1,106 |
Total Open Pit Reserves | Probable | 21,889 | Variable | 2.05 | 1,445 |
UNDERGROUND RESERVES | |||||
Golouma W, S | Probable | 4,600 | 2.18 | 4.19 | 620 |
Kerekounda | Probable | 1,333 | 2.18 | 5.15 | 221 |
Kourouloulou | Probable | 189 | 2.18 | 8.16 | 49 |
Total Underground Reserves | Probable | 6,122 | 2.18 | 4.52 | 890 |
TOTAL OPEN PIT & UNDERGROUND RESERVES | Probable | 28,011 | N/A | 2.59 | 2,335 |
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The open pit external mining dilution is based on a calculation of the number of waste blocks which touch an ore block in the mineral inventory block model, along with an assumed dilution for each edge of a block.
A portion (waste material only) of the pit design that constrains the Masato reserve infringes on the adjacent property concession of Teranga. The actual mineralized zone is not affected but if the entire reserve is mined, the upper benches of an open pit would cross the adjacent property boundary and an agreement with the holder of that property would have to be reached before this mining could occur. No OJVG resources extend onto the Teranga concession. OJVG has an agreement in principle with Teranga allowing OJVG to mine waste on the Teranga concession in order to extract Masato ore contained on the OJVG concession.
The Open Pit and Underground Reserves have increased in comparison with the previous 2010 Feasibility as summarised on the following tables:
Table 2: Summary of changes to Reserves from 2010 Feasibility study
OP Reserves Change | 2010 FS | 2013 FS Update | % Change |
OP Tonnes (Mt) | 12.8 | 21.9 | 71% |
Contained Gold (koz) | 813 | 1,443 | 78% |
Diluted Grade (g/t) | 1.96 | 2.05 | 5% |
UG Reserves Change | 2010 FS | 2013 FS Update | % Change |
UG Tonnes (Mt) | 4.6 | 6.1 | 33% |
Contained Gold (koz) | 607 | 890 | 47% |
Diluted Grade (g/t) | 4.08 | 4.52 | 11% |
Total Reserves Change | 2010 FS | 2013 FS Update | % Change |
Contained Gold (koz) | 1,420 | 2,334 | 64% |
The mineral reserve estimate for the OJVG Gold Project open pits was defined by applying economic factors for gold price, mining dilution, process recovery, operating costs, refining/transport costs and royalties to the mineral resource estimate. The mining, processing and general administration costs are based on feasibility level engineering for the expected mill throughput rate. A distinction has been made between material types (soft vs. hard) for both ore and waste in order to capture the expected variation in mining and processing costs and mill production rates. The mineral inventory block models for each of the deposits were evaluated with the Gemcom Whittle - Strategic Mine Planning™ (“Whittle”) software to determine optimal mining shells to be used for mine design.
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SRK Mineral Resource Estimate for the 2013 FS Update
The following table summarizes the mineral resources for all of the CIL and heap leach deposits identified to date and announced in Oromin’s news release dated October 1, 2012. That news release included details of SRK’s mineral resource estimates and methodology. Mineral resources are inclusive of the Project’s newly defined probable mineral reserves as outlined in Table 1.
Table 3: OJVG Mineral Resource Estimate - Effective Date: September 28, 2012
Deposit | Resource | Tonnage | Grade | Gold Ounces |
Category | ||||
(000’s) | g/t Au | (000’s) | ||
Golouma | Indicated | 13,685 | 3.18 | 1,400 |
Masato | Indicated | 44,970 | 1.34 | 1,933 |
Sub total | Indicated | 58,655 | 1.77 | 3,333 |
Heap Leach | Indicated | 16,551 | 0.84 | 445 |
TOTAL | Indicated | 75,206 | 1.56 | 3,778 |
Golouma | Inferred | 5,455 | 3.43 | 601 |
Masato | Inferred | 3,527 | 1.13 | 128 |
Sub total | Inferred | 8,982 | 2.52 | 728 |
Heap Leach | Inferred | 8,346 | 0.87 | 234 |
TOTAL | Inferred | 17,329 | 1.73 | 963 |
Notes: The Golouma deposits include the Golouma (West/South/Northwest), Kerekounda and Kourouloulou deposits and together with the Masato deposit comprise the 4 CIL deposits subject to the FS. The Heap Leach category includes the Niakafiri Southeast, Niakafiri Southwest, Maki Medina, Kobokoto, Mamasato, Sekoto, Kinemba, Koulouqwinde, Koutouniokolla, and Kouroundi deposits. Tonnage and grades for the open pit portions of all deposits have been constrained by an optimized Whittle pit based on a $1,500 per ounce gold price and the proposed mining and processing related costs. Tonnages and grades for Masato as well as the Golouma category deposits assume CIL processing methods and were calculated at gold cut-off grades of 0.32 g/t for sulphide ore and 0.15 g/t for oxide ore. Tonnages and grades for the heap leach category deposits assume heap leach processing methods and were calculated at gold cut-off grades of 0.24 g/t for sulphide ore and 0.15 g/t for oxide ore.
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Underground resources reported below the optimized pits for all of the deposits are reported using a 1.0 g/t cut-off grade. The detailed SRK resource reporting methodology is summarized in Oromin’s October 1, 2012 news release.
The total indicated resource for all deposits at the OJVG Gold Project is 75.21 million tonnes grading 1.56 g/t Au containing 3.78 million ounces of gold. The total inferred resource for all deposits at the Project is 17.33 million tonnes grading 1.73 g/t Au, containing 0.96 million ounces of gold.
The Masato and three Golouma deposits are grouped together in Table 3 as only the indicated resource of 3.333 million ounces (58,665,000 tonnes grading 1.77 g/t Au) for these four deposits was considered for the 2013 CIL FS update.
Separately, the indicated and inferred resources for the heap leach designated deposits will form the basis for the heap leach PEA update which will be announced separately.
Mining and Production
Mining of the Masato deposit will take place using open pit mining methods. The Golouma deposit will be mined by a combination of open pit and underground methods. The Golouma open pit will form access for the development of the Golouma underground mines. The four Golouma underground mines (Golouma South 1 and Golouma West 1, 2 & 3) will be mined in a sequence that targets the higher grade deposits as early as feasible in the mining schedule. Two additional high-grade underground mines at the Kerekounda and Kourouloulou deposits are also planned. Kerekounda will be accessed via a small open pit mine aimed at exposing fresh rock for underground development. The Kourouloulou mine will be accessed via a small box-cut and decline.
All mines will share a common processing facility. Throughput is planned at a yearly production rate of approximately 1.7 million tonnes for sulphide ore and 2.7 million tonnes for oxide ore.
The OJVG Gold Project open pit and underground mines will produce a total of 28 million tonnes (Mt) of ore and 184 Mt of waste rock over a 17 year mine operating period. The mine schedule focuses on achieving the required plant feed production rate and is based on mining of higher grade material early in the schedule while balancing stripping ratios. The mining schedule maximizes the attainable mill throughputs based on the oxide/sulphide ore ratios produced. The OJVG Gold Project is most profitable when the open pit phases and the underground workings are mined concurrently. This approach allows the higher underground ore grades to be milled initially yet allows the open pits to provide the additional ore feed to maintain the mill at maximum capacity.
Average annual gold production for the 13 years of full production from 2017 to 2029 inclusive, is expected to be approximately 144,000 ounces per year. This does not include any production from heap
7
leach processing, which will be addressed in the 2013 heap leach PEA update to be announced separately, following this release.
Processing
The process plant and associated service facilities for the OJVG Gold Project are designed to process run of mine (“ROM”) ore delivered to the primary crusher, and ultimately to produce doré bars. The milling process encompasses crushing and grinding of the ore, carbon-in-leach cyanidation and adsorption, carbon stripping, electro-winning and smelting to produce gold bars that are then shipped to a refinery for final processing.
The key design criteria used in the FS for the plant design are listed below:
Treatment of an average 4,540 dry metric tonnes per day (“t/d”) for 365 days per year, after allowance for availability whilst treating 100% primary sulphide ore;
Treatment of an average 7,390 t/d for 365 days per year, after allowance for availability whilst treating oxide ore, or a blend of oxide and sulphide ore containing no more than 43% sulphide ore;
Sufficient plant design flexibility for treatment of all ore types from all deposits as per test work completed at design throughput.
The soft ore treatment rate is higher than the primary hard ore treatment rate due to the ore being significantly less competent and therefore requiring less power in the grinding circuit. Overall gold extractions seen in the various metallurgical test work programs ranged from 88 – 95 % depending on the ore lithology.
Operating Cost Estimates (As at Q1 2013)
The estimated operating costs for the OJVG Gold Project are $654 per ounce of payable metal. The costs are summarized in the tables below:
Table 4: Unit Operating Cost Summaries
Summary Unit Operating Costs | Unit | Cost | ||
UG Mining Unit OPEX | $/t ore mined | $ | 41.51 | |
OP Mining Unit OPEX | $/t ore mined | $ | 17.17 | |
Milling/G&A/Site/Tails unit OPEX | $/t milled | $ | 19.30 | |
G&A Unit Costs | $/t milled | $ | 5.50 | |
Import duty Unit Costs | $/t milled | $ | 2.17 | |
Total Unit OPEX | $/t milled | $ | 49.44 | |
Total Unit OPEX | $/oz | $ | 653.98 |
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Underground Unit Operating Costs | Unit | Cost | ||
Total Secondary Development | $/t ore mined | $ | 5.58 | |
Total C&F Stoping | $/t ore mined | $ | 13.63 | |
Haulage (Ore, Waste, Backfill) | $/t ore mined | $ | 8.03 | |
Ancillary Equipment | $/t ore mined | $ | 3.52 | |
Electricity | $/t ore mined | $ | 2.79 | |
Technical & Admin Labour | $/t ore mined | $ | 2.18 | |
Maintenance Labour | $/t ore mined | $ | 1.10 | |
Mine Supervisory Labour | $/t ore mined | $ | 1.64 | |
Production Labour | $/t ore mined | $ | 1.61 | |
Mine Dewatering | $/t ore mined | $ | 0.28 | |
Mine G & A | $/t ore mined | $ | 1.15 | |
All Underground Mining Opex | $/t ore mined | $ | 41.51 | |
Open Pit Unit Operating Costs | Unit | Cost | ||
LOM Strip Ratio (Waste:Ore) | (Waste : Ore) | 8.4 : 1 | ||
Open Pit Mining | $/tonne material | $ | 1.85 | |
Open Pit Mining | $/tonne of ore | $ | 17.17 | |
Processing | Unit | Cost | ||
Power | $/t ore milled | $ | 10.38 | |
Reagents and Consumables | $/t ore milled | $ | 6.66 | |
Maintenance Consumables and Services | $/t ore milled | $ | 0.75 | |
Process Plant Labour | $/t ore milled | $ | 1.51 | |
Processing Total | $/t ore milled | $ | 19.30 |
General and Administration | Unit | Cost | ||
General & Administration | $/t ore milled | $ | 3.35 | |
G&A Labour | $/t ore milled | $ | 1.08 | |
Camp | $/t ore milled | $ | 1.06 | |
G&A Total | $/t ore milled | $ | 5.50 | |
Unit Costs per Ounce | Unit | Cost | ||
All Mining | $/oz | $ | 297.38 | |
Milling/G&A/Site/Tails unit OPEX | $/oz | $ | 255.25 | |
G&A Unit Costs | $/oz | $ | 72.70 | |
Import duty Unit Costs | $/oz | $ | 28.65 | |
Total Unit OPEX | M$ | $ | 653.98 |
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Capital Cost Estimates (As at Q1 2013)
Pre-production development capital for project facilities is estimated to be approximately $297.1 million, which includes open pit mobile equipment costs, underground mine development for the Kerekounda and Kourloulou deposits, plant and infrastructure construction and commissioning costs, as well as site infrastructure construction costs plus contingency. Ongoing life-of-mine sustaining capital is $208.0 million, including underground mobile equipment replacements, waste facility expansions, sustaining capital estimates for fixed plant and infrastructure and ongoing underground development. The sustaining capital also covers the preproduction capital for later Golouma underground mines that commence development once the Golouma open pit mine has provided access.
A contingency has been added to the underlying capital cost estimates that reflects the level of risk associated with those estimates. The overall weighted-average contingency for the entire capital program is 11%. The capital cost estimate for the project is summarized in the following table.
Table 5: LOM Capital Cost Estimate
CAPITAL EXPENDITURE ($M USD) | Total | Initial | Sustaining |
UG Mine Development Capital | 30.6 | 2.9 | 27.7 |
UG Mine Mobile Equipment | 59.6 | 20.5 | 39.0 |
UG Mine Infrastructure | 4.4 | 1.1 | 3.2 |
Open Pit Mine Capital | 80.0 | 31.3 | 48.7 |
Process Plant | 70.6 | 67.1 | 3.5 |
Infrastructure | 59.4 | 56.5 | 3.0 |
Sustaining Capital for Mill and Infrastructure | 14.0 | - | 14.0 |
Indirects, Mine and Miscellaneous | 52.6 | 50.0 | 2.6 |
Tailings, Water and Roads | 44.7 | 19.8 | 24.8 |
Owners Costs | 20.0 | 20.0 | - |
Closure | 17.5 | - | 17.5 |
Contingency @ 11% | 51.3 | 27.9 | 23.5 |
TOTAL CAPITAL COST | 504.7 | 297.1 | 207.7 |
Economic Analysis
The mining and processing plan was evaluated at three different gold prices: $1,350/oz, $1,550/oz and $1,750/oz. Economic evaluation was undertaken using industry-standard discounted cashflow modelling. Common assumptions used in the cash flow models include:
10
5% discount rate for NPV calculation;
In accordance with government policy, a tax-free period was applied until 2018. From 2018 onwards, each of a 15% import duty applicable to 50% of operating costs (estimate of imported component), a 30% corporate income tax, and a 18% Value Added Tax were applied. The corporate income tax recently increased to 30% from 25% effective January 2013;
A combination of unit-of-production depletion and 15% straight-line depreciation was assumed for deductions used in estimation of corporate income tax. Depletion and depreciation were accumulated and carried forward until they could be utilized for tax purposes;
3% government royalty is applied to payable gold revenue;
100% payable gold has been assumed with a $7.00/oz off-site refining cost;
All 2012 and prior costs assumed to be sunk costs with economic analysis beginning in 2013;
Plant commissioning takes place in the 3rd quarter of 2015 and commercial plant production begins in H2 2016.
The results of discounted cash flow analyses are summarized in the following table:
Table 6: Cash Flow Analysis Results:
Gold Price ($/oz) | ||||
Parameter | Unit | $1,350 | $1,550 | $1,750 |
Off site cost | $/oz | $7.00 | $7.00 | $7.00 |
Royalty @ 3% of NSR | $/oz | $40.34 | $46.29 | $52.29 |
Net gold price | $/oz | $1,304 | $1,497 | $1,691 |
Ore mined (LOM - UG and OP) | Mt | 28.0 | 28.0 | 28.0 |
Average ROM grade | g/t Au | 2.59 | 2.59 | 2.59 |
Average process recovery | % | 90.8% | 90.8% | 90.8% |
Gold produced | M. oz. | 2,119 | 2,119 | 2,119 |
Unit operating cost per tonne milled | $/t milled | $49.44 | $49.44 | $49.44 |
Unit operating cost per oz | $/oz Au | $654 | $654 | $654 |
Pre-production capital cost | $M | 297.1 | 297.1 | 297.1 |
Total capital cost (Life of mine) | $M | 504.7 | 504.7 | 504.7 |
Pre-tax NPV0% | $M | 854 | 1261 | 1672 |
Pre-tax NPV5% | $M | 476 | 740 | 1007 |
Pre-tax IRR | % | 23.9% | 31.3% | 38.2% |
Pre-tax payback period | Months from start Prod. | 29 | 23 | 18 |
Post-tax NPV0% | $M | 652 | 961 | 1274 |
Post-tax NPV5% | $M | 353 | 558 | 765 |
Post-tax IRR | % | 20.7% | 27.7% | 34.3% |
Post-tax payback period | Months from start Prod. | 30 | 23 | 18 |
11
The results of the analyses indicate that the project demonstrates robust economics under all three gold price scenarios. The overall project break-even gold price is $1,019 /oz using a 5% discount rate.
Note that the cash-flow analysis at the various prices uses the base mining and processing plan without modifications. Further value may be generated by optimizing mining and processing strategies at the evaluation prices.
Additional Value-Adding Opportunities
The mine plans were developed on the basis of a fixed gold price and therefore a fixed cut-off grade strategy. During operations of a long life and flexible mining complex such as is proposed, there may be opportunities to improve project economics by making management decisions that are responsive to variations in economic parameters. These management options include the ability to vary cut-off grade to maximize cashflow and value. The use of intermediate-grade stockpiling is known to improve project economics in many cases. Oromin has undertaken to examine the upside potential of this type of optimization.
Qualified Persons
The Resources and Reserves estimations have been undertaken by SRK Consulting (North America). Certification by relevant Qualified Persons will be included in the Feasibility Study Update Report.
To find out more about Oromin Explorations Ltd., visit www.oromin.com.
On behalf of the Board of Directors of
OROMIN EXPLORATIONS LTD.
“Chet Idziszek” |
Chet Idziszek, President and CEO |
[Refer to the “Cautionary Statements” on the following page.]
12
Cautionary Statements This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking statements”). Specifically, this press release has as its principal subject a feasibility study update as at today’s date prepared by our independent consultants. In addition, this release provides certain comparisons to a prior feasibility study as at July 2010, as filed on SEDAR July 15, 2010 (the “2010 Feasibility Study”).It is emphasized to readers that any feasibility study is based upon assumptions about such factors as extent and continuity of mineralization, rock density, and variation between predicted and actual deposit shapes. In addition any feasibility study is based upon assumptions about such factors as availability of capital for development, commencement of construction, capital costs, ore grade, anticipated gold production, gold recovery, cash operating costs and other costs, expected mine life, projected internal rate of return, projected payback period, sensitivity to metal prices and other sensitivities, and assumptions underlying any financial analysis. Statements based on such assumptions may be viewed as forward-looking statements. Any company contemplating the development of a mineral resource is subject to such risks and uncertainties as commodity price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, market competition, ongoing relations with employees and impacted communities, general economic conditions and other risks involved in the mineral exploration and development industry, as well as those risk factors discussed in the section entitled “Description of Business - Risk Factors” in Oromin’s Annual Information Form filed on SEDAR May 29, 2012. Statements based on such assumptions may be viewed as forward-looking statements. The operating and capital costs in the 2013 Feasibility Study which is the principal subject of this news release were developed to be reasonable estimates within industry benchmarks. The 2013 Feasibility Study uses estimates of gold prices in line with norms currently used in our industry. There is no certainty that the results of the 2013 Feasibility Study will ever be realized. Should one or more of the risks or uncertainties involved in forward-looking statements relating to the 2013 Feasibility Study materialize, or should the assumptions underlying the 2013 Feasibility Study prove incorrect, actual results of the 2013 Feasibility Study may vary materially from those anticipated, believed, estimated or expected. Statements based on such assumptions may be viewed as forward-looking statements. In addition to the forward-looking statements associated with feasibility parameters and resource and reserve estimates, this news release contains other forward-looking statements associated with the following matters: references to additional opportunities and indicated and inferred resources on page 2; to future optimization evaluations and the potential for significant resource expansion on page 3; reference to an agreement with the holder of an adjacent property on page 5; the mineral resource estimates in Table 3 on page 6; and the discussion of additional value-adding opportunities on page 12. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Oromin’s ability to predict or control and may cause Oromin’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Oromin undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. Cautionary Note to U.S. Readers Regarding Estimates of Indicated and Inferred Resources This document uses the terms “indicated mineral resources” and “inferred resources”. The Company advises U.S. investors that while these terms are recognized and required by Canadian regulations, they are not recognized by the SEC. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred” or “indicated mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimates of “inferred mineral resources” may not form the basis of a feasibility study or prefeasibility studies, except in rare cases, such as with an initial PEA. The SEC, normally, only permits issuers to report mineralization that does not constitute “reserves” as in-place tonnage and grade, without reference to unit measures. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable. Information concerning descriptions of mineralization and resources contained herein may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC. |
13
Form 51-102F3
Material Change Report
Item 1 | Name and Address of Company |
Oromin Explorations Ltd. | |
Suite 2000, 1055 West Hastings Street | |
Vancouver, BC V6E 2E9 | |
Item 2 | Date of Material Change |
January 31, 2013 | |
Item 3 | News Release |
The news release was disseminated on January 31, 2013. | |
Item 4 | Summary of Material Change |
The Company, on behalf of Oromin Joint Venture Group Ltd., announced positive results for its updated 2013 Heap Leach Preliminary Economic Assessment for its OJVG Gold Project in Senegal, West Africa. | |
Item 5 | Full Description of Material Change |
See attached news release. | |
Item 6 | Reliance on subsection 7.1(2) or (3) of National Instrument 51-102 |
Not Applicable | |
Item 7 | Omitted Information |
None | |
Item 8 | Executive Officer |
The following executive officer of the Company is knowledgeable about the material change and may be contacted regarding the change: | |
James Stewart | |
Secretary | |
Telephone: 604.331.8772 | |
Facsimile: 604.331.8773 | |
DATED: | February 4, 2013 |
Suite 2000 - 1055 West Hastings Street, Vancouver, B.C., V6E 2E9 Canada | |
T: +1.604. 331.8772 Toll Free 1.877.529.8475 F: +1.604.331.8773 E: info@oromin.com W: www.oromin.com |
January 31, 2013 | Trading Symbol: TSX – OLE |
OTC/BB – OLEPF |
OROMIN ANNOUNCES POSITIVE RESULTS FOR THE UPDATED 2013 HEAP LEACH PRELIMINARY ECONOMIC ASSESSMENT AT THE OJVG GOLD PROJECT IN SENEGAL
Oromin Explorations Ltd. (“Oromin” or the “Company”), on behalf of Oromin Joint Venture Group Ltd. (“OJVG”), is pleased to announce results for its updated 2013 Heap Leach Preliminary Economic Assessment (“2013 HL PEA”) for its OJVG Gold Project (the “Project”) in Senegal, West Africa. The 2013 HL PEA was compiled by Oromin under the direction of its V.P. of Engineering, Ken Kuchling, P.Eng., with the assistance of external independent consultants, including SRK Consulting (Canada) Ltd. (“SRK”) who completed all of the resource models. The 2013 HL PEA is an update to the Project’s 2011 heap leach PEA (“2011 HL PEA”) completed by SRK and Ausenco Solutions Canada Inc. (“Ausenco”). The PEA has been completed concurrently with the Company’s recently announced 2013 CIL feasibility study (“FS”) update. The 2013 HL PEA evaluates deposits and potential mineable resources that are not included as part of the 2013 CIL FS. All figures presented are in US Dollars.
HIGHLIGHTS
Several open pit gold deposits will provide a heap leach production period of just over 14 years
Average annual heap leach gold production for first full three years of production is 36,000 ounces per year at a $760 operating cash cost per ounce
Average annual life of mine (“LOM”) heap leach gold production is 27,000 ounces per year at an operating cash cost of $929 per ounce
Average LOM gold recovery of 70%
Estimated start-up capital cost of $54 million including $10.5 million contingency
At a gold price of $1550/oz Net Present Value (“NPV”) pre-tax of $98 million and after- tax of $76 million at a 5% discount rate generating an after-tax internal rate of return (“IRR”) of 36% with an 1.9 year payback
Current heap leach resources justify throughput expansion towards increased annual gold production
All heap leach deposits remain open to expansion
Project Summary
The heap leach project can be developed, as originally proposed in the 2011 HL PEA, by open pit mining methods with material trucked from various deposits to a central plant for crushing, agglomeration, and heap leaching (Oromin news release of May 5, 2011). In order to remain consistent with the 2011 study, no change in the original 2 million tonnes per year production rate was assumed, although the defined production tonnage indicates that a heap leach capacity increase may be warranted.
The production plan envisioned in the 2013 HL PEA is based on a potentially mineable portion of the indicated plus inferred mineral resource of 28.4 million tonnes at a grade of 0.61 g/t containing 560,000 ounces of gold which will be mined over a 14 year mine life. The average annual production for the first 3 years is approximately 36,000 ounces of gold per year at an average operating cost of $760 per ounce, and over the mine life, approximately 27,000 ounces of gold per year at an average operating cost of $929 per ounce.
The 2013 HL PEA is considered preliminary in nature and includes inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. Mineral resources that are not mineral reserves have not yet demonstrated economic viability. Due to the uncertainty that may be attached to inferred mineral resources, it cannot be assumed that all or any part of an inferred mineral resource will be upgraded to an indicated or measured mineral resource as a result of continued exploration or to mineral reserves once economic considerations are applied. Therefore, there is no certainty that the production profile contemplated in the 2013 HL PEA will be realized.
The economic modeling in the 2013 HL PEA for the OJVG Gold Project indicates positive economics. At a gold price of $1,550 per ounce, the heap leach aspect of the OJVG Gold Project yields a positive after-tax NPV of $76.4 million at a 5% discount rate. The after-tax IRR is 36 % and payback is only 1.9 years from initial gold production.
Exploration potential is considered excellent at the known heap leach gold deposits, which all remain open to further expansion as well as throughout the entirety of the Project area where more than a dozen newly identified exploration targets and prospects have been identified thus far. This exploration upside could support extending the processing life in the future, and would likely support an expanded operating capacity.
The indicated and inferred resources for the heap leach deposits outlined in Table 2, represent the starting point from which the potential mineable resources in Table 1 have been determined.
It is important to note that the recoverable heap leach gold ounces are derived from separate deposits or in the case of Masato, from low grade mineral resources that are below cut-off grade for the CIL mill facility proposed in the 2013 FS. As such, any potential value of recoverable heap leach gold ounces would be in addition to those defined in the 2013 CIL FS plan (Oromin news release of January 31, 2013). Table 1 summarizes, for each deposit, the potential mineable portion of the resource used to develop the heap leach production plan. Some of the smaller heap leach deposits have not been included in the production plan at this time.
Table 1: Potential Mineable Resources for Heap Leach Deposits
Effective Date: January 31, 2013
Diluted Tonnes | Diluted Grade | Contained Ounces | |
Deposit | (000’s) | (g/t Au) | (Au) |
Niakafiri Southeast | |||
Oxide | 4,146,000 | 0.79 | 104,900 |
Sulphide | 1,611,000 | 0.80 | 41,400 |
Niakafiri Southwest | |||
Oxide | 1,376,000 | 0.54 | 23,700 |
Sulphide | 2,103,000 | 0.54 | 36,800 |
Maki Medina | |||
Oxide | 1,597,000 | 0.69 | 35,600 |
Sulphide | 777,000 | 0.75 | 18,700 |
Kobokoto | |||
Oxide | 1,068,000 | 0.81 | 27,900 |
Sulphide | 328,000 | 0.97 | 10,200 |
Mamasato | |||
Oxide | 356,000 | 0.95 | 10,900 |
Sulphide | 358,000 | 1.49 | 17,200 |
Sekoto | |||
Oxide | 579,000 | 0.66 | 12,300 |
Sulphide | 3,000 | 0.59 | 100 |
Sub-Total | |||
Oxide | 9,122,000 | 0.73 | 215,300 |
Sulphide | 5,180,000 | 0.75 | 124,400 |
Masato | |||
Oxide | 2,157,000 | 0.34 | 23,600 |
Sulphide | 11,969,000 | 0.51 | 196,500 |
Total | |||
Oxide | 11,279,000 | 0.66 | 238,900 |
Sulphide | 17,149,000 | 0.58 | 320,900 |
Total Combined | 28,428,000 | 0.61 | 559,800 |
2012 Mineral Resource Estimate
Table 2 summarizes the mineral resources for all of the CIL and heap leach deposits identified to date and announced in Oromin’s news release dated October 1, 2012. That news release includes details of SRK’s mineral resource estimates and methodology. Mineral resources are inclusive of the Project’s newly defined probable mineral reserves as outlined in the 2013 feasibility study update (Oromin news release of January 31, 2013).
Table 2: OJVG MINERAL RESOURCE ESTIMATE
Effective Date: SEPTEMBER 28, 2012
Deposit | Resource Category | Tonnage | Grade | Gold Ounces |
(000's) | g/t Au | (000’s) | ||
Golouma | Indicated | 13,685 | 3.18 | 1,400 |
Masato | Indicated | 44,970 | 1.34 | 1,933 |
Sub total | Indicated | 58,655 | 1.77 | 3,333 |
Heap Leach | Indicated | 16,551 | 0.84 | 445 |
TOTAL | Indicated | 75,206 | 1.56 | 3,778 |
Golouma | Inferred | 5,455 | 3.43 | 601 |
Masato | Inferred | 3,527 | 1.13 | 128 |
Sub total | Inferred | 8,982 | 2.52 | 728 |
Heap Leach | Inferred | 8,346 | 0.87 | 234 |
TOTAL | Inferred | 17,329 | 1.73 | 963 |
The Golouma deposits include the Golouma (West/South/Northwest), Kerekounda and Kourouloulou deposits and together with the Masato deposit comprise the 4 CIL deposits subject to the FS. The Heap Leach category includes the Niakafiri Southeast, Niakafiri Southwest, Maki Medina, Kobokoto, Mamasato, Sekoto, Kinemba, Koulouqwinde, Koutouniokolla, and Kouroundi deposits. Tonnage and grades for the open pit portions of all deposits have been constrained by an optimized Whittle pit based on a $1500 per ounce gold price and the proposed mining and processing related costs. Tonnages and grades for Masato as well as the Golouma category deposits assume CIL processing methods and were calculated at gold cut-off grades of 0.32 g/t for sulphide material and 0.15 g/t for oxide material. Tonnages and grades for the Heap Leach category deposits assume heap leach processing methods and were calculated at gold cut-off grades of 0.24 g/t for sulphide material and 0.15 g/t for oxide material. Underground resources reported below the optimized pits for all of the deposits are reported using a 1.0 g/t cut-off grade. The detailed SRK resource reporting methodology is summarized in Oromin’s October 1, 2012 news release.
The total indicated resource for all deposits at the OJVG Gold Project is 75.21 million tonnes grading 1.56 g/t Au containing 3.78 million ounces of gold. The total inferred resource for all deposits at the Project is 17.33 million tonnes grading 1.73 g/t Au containing 0.96 million ounces of gold.
From the above Table, the heap leach deposits’ total indicated resource of 16.55 million tonnes grading 0.84 g/t Au containing 445,000 ounces of gold, the inferred resources of 8. 35 million tonnes grading 0.87 g/t Au containing 234,000 ounces of gold plus the low grade mineral resources from Masato (that are within the final reserve pit, but below cut-off grade for the CIL mill facility proposed in the 2013 feasibility study and referred to on Page 3), provided the resource base for the 2013 HL PEA. Pit optimizations were completed for each of the heap leach deposits in order to quantify the material that would be considered as potentially mineable for use in the production plan. Ultimately the 2013 HL PEA considered the development of six of the ten heap leach deposits that were deemed of sufficient size to warrant development at this stage.
Mining and Production
The low grade material resources from Masato and open pit heap leach deposits at the OJVG Gold Project will produce a total of 28.4 million tonnes (Mt) of heap leach feed and 52.5 Mt of waste rock over a 14 year mine operating period. The heap leach stacking rate assumed is 2.0 million tonnes per year. Given the size of the potential tonnage, an increase in production rate may improve the heap leach economics significantly.
Average annual gold production for the initial 3 years of full production beginning in 2016 is expected to be 36,000 ounces. Over the 14 year project life, total gold production is estimated to be 390,000 ounces.
The open-pit shells were initially optimized by applying economic factors for a gold price of $1,250/ounce, mining dilution, heap leach recovery, operating costs, refining/transport costs and royalties. Operational pits were then designed in order to estimate the potential mineable portion of the resource for use in the production plan.
Processing
Heap leach metallurgical test work was completed on three Masato composites, four Niakafiri Southeast composites, and one Niakafiri Southwest composite. These three deposits provide about 80% of the total heap leach tonnage. Test work consisted of bottle rolls on fine grind and coarse grind samples, as well as column leach tests. No test work has yet been completed on the other heap leach deposits.
The average overall gold recovery from the bottle roll and column leach test work to date is 74% based on 82.5% for the oxide material and 60.9% for the fresh rock material. For the purposes of the 2013 HL PEA recoveries of 82.5% for oxide and 60% for sulphide rock have been assumed for all deposits under consideration, resulting in an overall average heap leach recovery of 70%.
Capital and Operating Costs
The capital and operating costs for the heap leach operation are assumed to be incremental to the costs for the CIL project. For example, general site facilities and administration services will be borne by the CIL project and hence only specific costs for bringing on the heap leach operation are considered. Preproduction development capital as of Q1 2013 for project facilities relating to the heap leach project is estimated to be approximately $54 million to an estimated accuracy of +/-35%. This estimate includes the construction of the heap leach pad and associated dams, process plant and associated services and reagent facilities, local power supply, site construction costs, and an overall project contingency of 25%.
The estimated operating costs for the heap leach project are set out in Table 3. It is assumed that all mining will be done by a mining contractor for the heap leach pits.
Table 3: Heap Leach Operating Cost Assumptions
Oxide Material | Sulphide Material | |
Mining Cost ($/t material) | $1.70 | $2.38 |
Heap Leaching cost ($/t feed) | $6.18 | $6.73 |
Feed transport cost ($/t-km) | $0.12 | $0.12 |
G&A Cost (incremental) | $0.11 | $0.11 |
Cash Flow Analysis
Project economics were evaluated using varying gold prices. For each economic scenario the gold price was fixed throughout the project life and all cash flows are based on the same production mine plan. Three gold prices were used in the cash flow analysis: $1,350/oz, $1,550/oz and $1,750/oz.
The assumptions used in the economic modelling include:
5% discount rate for NPV calculation;
Exclusion of all duties and taxes for our tax-exempt period ending in January 2018 with a 15% import duty applied to 80% of operating costs starting in year 2018 and a 30% corporate income tax starting in year 2018;
3% government royalty on payable gold revenue;
100% payable gold with a $7.00/oz offsite cost;
All pre-2015 costs assumed to be sunk costs with economic analysis beginning in 2015 (2015 is Year -1);
Commercial plant production begins January 2016.
The economic analysis results are summarized in Table 4:
Table 4: Cash Flow Analysis Results
Parameter | Unit | |||
$1250/oz Au | $1550/oz Au | $1750/oz Au | ||
Off site gold cost | $/oz | 7.00 | 7.00 | 7.00 |
Heap Leach feed mined | Mt | 28.4 | 28.4 | 28.4 |
Average grade | g/t Au | 0.61 | 0.61 | 0.61 |
Average process recovery | % | 70.% | 70.% | 70.% |
Gold produced | M. oz. | 389,600 | 389,600 | 389,600 |
Unit operating cost per tonne processed | $/t | $12.70 | $12.70 | $12.70 |
Unit operating cost per oz | $/oz Au | $929 | $929 | $929 |
Pre-production capital cost | $M | $ 54.0 | $ 54.0 | $ 54.0 |
Total capital cost (Life of mine) | $M | $ 69.0 | $ 69.0 | $ 69.0 |
Pre-tax NPV0% | $M | $76.6 | $152.2 | $227.8 |
Pre-tax NPV5% | $M | $45.2 | $98.3 | $151.4 |
Pre-tax IRR | % | 24% | 41% | 56% |
After-tax NPV0% | $M | $60.7 | $118.8 | $176.3 |
After-tax NPV5% | $M | $34.8 | $76.4 | $117.6 |
After-tax IRR | % | 21% | 36% | 51% |
After-tax payback period | years | 2.9 | 1.9 | 1.6 |
The results of the economic analysis indicate that the project demonstrates positive economics for all three gold price scenarios.
As part of the on-going advanced study of the OJVG Gold Project, further optimizations will be done to determine the optimal allocation of material between the CIL plant and the heap leach plant based on specific cost and recovery parameters for each deposit and each processing method.
Qualified Persons
Ken Kuchling, P. Eng., is a qualified person for the purposes of National Instrument 43-101, and has reviewed and verified the technical data disclosed in this news release. The Resources and Reserves estimations have been undertaken by SRK Consulting (North America). Certification by the relevant Qualified Persons that participated in the completion of the HL PEA under the direction of Mr. Kuchling, will be included in the final technical report.
To find out more about Oromin Explorations Ltd., visit www.oromin.com.
On behalf of the Board of Directors of
OROMIN EXPLORATIONS LTD.
“Chet Idziszek” |
Chet Idziszek, President and CEO |
[Refer to the “Cautionary Statements” on the following page.]
Cautionary Statements This press release contains certain forward-looking information as defined in applicable securities laws (referred to herein as “forward-looking statements”). Specifically, this press release has as its principal subject a preliminary economic analysis (the “2013 HL PEA”) as at January 2013 prepared by our independent consultants working in conjunction with in-house staff. In addition, this release A) makes reference to a mineral resource estimate as at September 2012, as set out in our news release filed on SEDAR October 1, 2012 (the “2012 Resource Estimate”), B) makes reference to our preliminary economic assessment of the viability of heap leach processing filed on SEDAR May 5, 2011 (the “2011 PEA”, and C) makes reference to a feasibility study update also issued today, January 31, 2013 and filed on SEDAR (the “2013 Feasibility Update”)). It is emphasized to readers that any mineral resource estimate, preliminary economic assessment or feasibility study is based upon assumptions about such factors as extent and continuity of mineralization, rock density, and variation between predicted and actual deposit shapes. In addition any preliminary economic assessment or feasibility study is based upon assumptions about such factors as availability of capital for development, commencement of construction, capital costs, ore grade, anticipated gold production, gold recovery, cash operating costs and other costs, expected mine life, projected internal rate of return, projected payback period, sensitivity to metal prices and other sensitivities, and assumptions underlying any financial analysis. Statements based on such assumptions may be viewed as forward-looking statements. Any company contemplating the development of a mineral resource is subject to such risks and uncertainties as commodity price volatility, changes in debt and equity markets, the uncertainties involved in interpreting geological data, increases in costs, environmental compliance and changes in environmental legislation and regulation, interest rate and exchange rate fluctuations, market competition, ongoing relations with employees and impacted communities, general economic conditions and other risks involved in the mineral exploration and development industry, as well as those risk factors discussed in the section entitled “Description of Business - Risk Factors” in Oromin’s Annual Information Form filed on SEDAR May 29, 2012. Statements based on such assumptions may be viewed as forward-looking statements. The operating and capital costs in the 2013 HL PEA were developed to be reasonable estimates within industry benchmarks. The 2013 HL PEA uses estimates of gold prices in line with norms currently used in our industry. There is no certainty that the results of the 2013 HL PEA will ever be realized. Should one or more of the risks or uncertainties involved in forward-looking statements relating to the 2013 HL PEA materialize, or should the assumptions underlying the 2013 HL PEA prove incorrect, actual results of the 2013 HL PEA may vary materially from those anticipated, believed, estimated or expected. Statements based on such assumptions may be viewed as forward-looking statements. In addition to the forward-looking statements associated with resource estimates and the 2013 HL PEA, this news release contains other forward-looking statements associated with the following matters: references to the 2013 CIL Feasibility Study on pages 1, 2 and 4; references to exploration potential and to deposits remaining open to further expansion on page 2; the assumption about mining being done by a contractor on page 5; and discussions of an on-going advanced study and further optimizations on page 6. Forward-looking statements involve known and unknown risks, uncertainties and other factors which are beyond Oromin’s ability to predict or control and may cause Oromin’s actual results, performance or achievements to be materially different from any of its future results, performance or achievements expressed or implied by forward-looking statements. Accordingly, readers should not place undue reliance on forward-looking statements. Oromin undertakes no obligation to update publicly or otherwise revise any forward-looking statements contained herein whether as a result of new information or future events or otherwise, except as may be required by law. Cautionary Note to U.S. Readers Regarding Estimates of Indicated and Inferred Resources This document uses the terms “indicated mineral resources” and “inferred resources”. The Company advises U.S. investors that while these terms are recognized and required by Canadian regulations, they are not recognized by the SEC. “Inferred resources” have a great amount of uncertainty as to their existence, and great uncertainty as to their economic and legal feasibility. It cannot be assumed that all or any part of an “inferred” or “indicated mineral resource” will ever be upgraded to a higher category. Under Canadian rules, estimates of “inferred mineral resources” may not form the basis of a feasibility study or prefeasibility studies, except in rare cases, such as with an initial PEA. The 2013 HL PEA is not an initial PEA. The SEC, normally, only permits issuers to report mineralization that does not constitute “reserves” as in-place tonnage and grade, without reference to unit measures. Under U.S. standards, mineralization may not be classified as a “reserve” unless the determination has been made that the mineralization could be economically and legally produced or extracted at the time the reserve determination is made. U.S. investors are cautioned not to assume that any part or all of a measured, indicated or inferred resource exists or is economically or legally mineable. Information concerning descriptions of mineralization and resources contained herein may not be comparable to information made public by U.S. companies subject to the reporting and disclosure requirements of the SEC. |
Form 51-102F3
Material Change Report
Item 1 | Name and Address of Company |
Oromin Explorations Ltd.
Suite 2000, 1055 West Hastings Street
Vancouver, BC V6E 2E9
Item 2 | Date of Material Change |
February 1, 2013
Item 3 | News Release |
The news release was disseminated on February 1, 2013.
Item 4 | Summary of Material Change |
The Company announced that further to its news release dated December 21, 2012, it has entered into a credit agreement dated January 31, 2013 with Sprott Resource Lending Partnership who will be providing the Company with a $5 million credit facility. The Company also announced it has received two advances for an aggregate of $1,800,000 under the credit facility and issued 750,000 common shares at a deemed price of $0.75 per share to Sprott Resource Lending Partnership, 375,000 of which remain in escrow.
Item 5 | Full Description of Material Change |
See attached news release.
Item 6 | Reliance on subsection 7.1(2) or (3) of National Instrument 51-102 |
Not Applicable
Item 7 | Omitted Information |
None
Item 8 | Executive Officer |
The following executive officer of the Company is knowledgeable about the material change and may be contacted regarding the change:
James Stewart
Secretary
Telephone: 604.331.8772
Facsimile: 604.331.8773
DATED: | February 4, 2013 |
Suite 2000 - 1055 West Hastings Street, Vancouver, B.C., V6E 2E9 Canada | |
T: +1.604. 331.8772 Toll Free 1.877.529.8475 F: +1.604.331.8773 E: info@oromin.com W: www.oromin.com |
February 1, 2013 | Trading Symbol: TSX – OLE |
OTC/BB – OLEPF | |
Website: www.oromin.com |
OROMIN FINALIZES $5 MILLION CREDIT FACILITY
Vancouver, B.C. – Oromin Explorations Ltd. (the “Company”) is pleased to announce that, further to its news release dated December 21, 2012, it has entered into a credit agreement dated January 31, 2013 with Sprott Resource Lending Partnership (“Sprott Lending”) pursuant to which Sprott Lending is to provide the Company with a $5 million credit facility (the “Facility”). The credit agreement replaces the previously announced term sheet. As of today’s date, Oromin has received a total of $1,800,000 pursuant to the first two advances under the Facility.
The one year Facility will bear interest at 12% per annum, compounded and payable monthly. In consideration for the Facility, Sprott Lending has been paid a structuring fee of $50,000 and been issued 750,000 common shares of the Company at a deemed price of $0.75 per share. Of these shares, 375,000 have been released to Sprott Lending, with balance being subject to escrow pending the completion of further advances under the Facility. The common shares will be subject to a four month hold period. All amounts outstanding under the Facility will be repayable in the event of a change of control of the Company. The Facility will be secured by a fixed and floating charge and specific registration over all of the assets of the Company.
The Facility will be used for the development of the OJVG project as well as for general corporate purposes. Toll Cross Securities Inc. provided financial consulting services in connection with the Facility.
To find out more about Oromin Explorations Ltd., visit www.oromin.com.
On behalf of the Board of Directors of
OROMIN EXPLORATIONS LTD.
“Chet Idziszek”
Chet Idziszek, President and CEO
Forward Looking Statements: The above contains forward-looking statements regarding a credit facility. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in the Management Discussion and Analysis of the Company. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
Exhibit 99.5
Suite 2000 - 1055 West Hastings Street, Vancouver, B.C., V6E 2E9 Canada | |
T: +1.604. 331.8772 Toll Free 1.877.529.8475 F: +1.604.331.8773 E: info@oromin.com W: www.oromin.com |
Trading Symbol: TSX – OLE | |
February 21, 2013 | OTC/BB – OLEPF |
Website: www.oromin.com |
OROMIN EXPLORATIONS TO PRESENT AT THE 2013 PDAC
Vancouver, B.C. – Oromin Explorations Ltd. (the “Company”) is pleased to announce that it will be presenting as well as exhibiting at this year’s Prospectors and Development Association Conference (PDAC) being held March 3rd - 6th, 2013 at the Metro Toronto Convention Centre, South Building, Toronto, ON, Canada.
David Mallo, Oromin’s Vice President of Explorations, will be presenting: “The OJVG Golouma Gold Project” at the Investing in Africa Mining Seminar. This event, hosted by MineAfrica, will take place March 5th at the Sheraton Centre Toronto Hotel, 123 Queen Street West, Toronto. Oromin welcomes the presence at this seminar of His Excellency M. Aly Ngouille Ndiaye, Minister of Energy and Mines of the Republic of Sénégal, and of M. Ousmane Cissé, Director of Mines and Geology. If you are interested in attending please refer to http://www.mineafrica.com/MineAfricaatPDAC/mineafricaatpdac-program.htm for more details.
You will find us at Investors Exchange Halls F & G, Booth # 3028 March 3rd - 5th: 10:00AM - 5:30PM and March 6th: 9:00AM to 12:00 Noon.
The Oromin Explorations management team will be in attendance to update you on the company’s latest developments and answer your questions.
To find out more about Oromin Explorations Ltd., visit www.oromin.com.
On behalf of the Board of Directors of
OROMIN EXPLORATIONS LTD.
“Chet Idziszek”
Chet Idziszek, President and CEO
Forward Looking Statements: The above contains forward-looking statements regarding a credit facility. Forward-looking statements are frequently, but not always, identified by words such as “expects,” “anticipates,” “believes,” “intends,” “estimated,” “potential,” “possible” and similar expressions, or statements that events, conditions or results “will,” “may,” “could” or “should” occur or be achieved. Forward-looking statements are statements about the future and are inherently uncertain, and actual achievements of the Company or other future events or conditions may differ materially from those reflected in the forward-looking statements due to a variety of risks, uncertainties and other factors, including, without limitation, those described in the Management Discussion and Analysis of the Company. The Company’s forward-looking statements are based on the beliefs, expectations and opinions of management on the date the statements are made and the Company assumes no obligation to update such forward-looking statements in the future. For the reasons set forth above, investors should not place undue reliance on forward-looking statements.
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