The state of Sinaloa in northwest Mexico is a prime mining target known for copper, gold, iron and lead that includes many mines, prospects and occurrences. The region has become the focus of Oroco Resource Corp. (TSX-V: OCO), which has steadily amassed a large land position in the state. Friday morning, the Vancouver-based company said that its holdings there just got a little bigger.
Coming into the latest acquisition agreement, Oroco held an irrevocable option to acquire a majority interest in 1,172 hectares of core concessions in the Santo Tomas project near El Fuerte, Sinaloa, Mexico. The company also has a 77.5% interest in over 7,000 hectares adjacent to and surrounding the core concessions. First discovered in 1968, historic research through 1994, including surface trenching, 30,000 meters of drilling, mapping and more, has provided sufficient data to point to a significant copper porphyry deposit at Santo Tomas.
To that end, a resource estimate was previously calculated, followed by a prefeasibility study (PFS) completed in 1994. The PFS by Bateman Engineering Inc. scoped open-pit mining and contemplated production in the range of 150-300 million pounds of copper per year, plus quantities of gold and silver, in a high-quality concentrate.
A missing piece of the puzzle for Oroco was the Rossy mineral concession, which it is now adding to its collection. The company said this morning that it has entered into an agreement through its wholly-owned Mexican subsidiary Minera Xochipala S.A. de C.V. for an 80% interest in the 766.7 hectare Rossy concession located within the northeast limits of it existing Santo Tomas project.
The acquisition means Oroco now controls about 8,981 hectares at Santo Tomas.
Rossy is on trend with known mineralization in Santo Tomas zones. Historic drilling at Santo Tomas comes within 100 meters of the Rossy concession.
For the stake, Orco is paying $125,000 in cash over two years and issuing 300,000 shares of its stock to the concession holders. The current owners will also be entitled to a 1.5% net smelter royalty on future production.
“The Rossy concession has long been an acquisition target for Oroco for reason of its favourable geology and proximity to the Brasiles Zone,” commentd Oroco CEO Craig Dalziel in this morning’s news release.
Shares of OCO closed Thursday at 45.5 cents and are up to 46.5 cents shortly after Friday’s opening bell. For the year, the stock is in a nice uptrend, rising 127.5% through Thursday’s close.