Orvana Announces Taguas Mining Property Preliminary Economic Assessment Report
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Date: June 28, 2019 #08-2019
ORVANA ANNOUNCES TAGUAS MINING PROPERTY
PRELIMINARY ECONOMIC ASSESSMENT REPORT
Toronto, Ontario, June 28, 2019 - Orvana Minerals Corp. (TSX:ORV) (the “Company” or “Orvana”) is
pleased to announce that further to its press release dated May 14, 2019 announcing that it had entered into a
purchase agreement (the “ Purchase Agreement ”) to acquire the Taguas gold property (“ Taguas” or the
“Property”) located in San Juan Province, Argentina, the Company has rec eived a preliminary economic
assessment report (“PEA”) from Wood, formerly Amec Foster Wheeler (“Wood”).
Juan Gavidia, CEO of Orvana stated: “The Taguas property will be an open pit mining operation that is near-
surface, and has a low-strip ratio, coupled with conventional heap-leach extraction. The new asset will be an
addition to the Company’s portfolio and is expected to set the pace for growth and lower overall unitary costs
across the Company. Taguas’ PEA outlines inferre d resources of 494 thousand ounces of gold and 18.11
million ounces of silver at an estima ted AISC of US$500 per ounce of gold; these are very positive, early
indicators for Taguas as Orvana’s third potential operation. Mr. Gavidia added: “Orvana’s exploration team,
and the Wood Pre-Feasibility Study consultants are in the planning stages to advance Taguas to the next level,
which would include step-o ut drilling on additional, nearby, near-surface, oxide targets in order to determine
any potential increase of the current mineral resources. The execution of any additional work on the Property
remains subject to Orvana obtaining sufficient financing to proceed forward.”
Background of the Taguas Property
On May 14, 2019, Orvana entered in to a Purchase Agreement with Compañía Minera Taguas S.A. (the
“Vendor”) pursuant to which, Orvana agreed to acquire (the “ Transaction”) the Property. In consideration for
100% of Taguas, Orvana will grant to the Vendor an indivisible net smelter royalty equal to 2.5% on all future
metals production mined from the Property.
Taguas consists of 15 mining concessions over an area of 3,273. 87 ha. It is located in the Province of San
Juan, Argentina, on the eastern flank of the Andes, between 3,500m to 4,300m above sea level. The Property
is approximately 25km north of Barrick Gold Corporation’s Velad ero mining operations and uses the same
infrastructure to reach the Property.
The Toronto Stock Exchange (“ TSX”) has provided conditional acceptance of Orvana’s notice of th e
Transaction, pursuant to the TSX Company Manual. Closing of the Transaction is subject to the final acceptance
of the TSX and a number of closing conditions including, without limitation, Orvana’s completion of a corporate
structure that is acceptable from a tax, corporate and legal perspective relating to the ownership of Taguas.
Preliminary Economic Assessment Report (PEA)
In connection with the Transact ion, Orvana has received a PEA o n Taguas from Wood, prepared by the
following qualified persons: Antonio Peralta Romero, P.Eng., Pr incipal Mining Engineer, Wood Canada Ltd.,
Vancouver; Joseph J. Kowalik PhD, QP MMSA Senior Consulting Geo logist; Ronald G. Simpson, P.Geo.,
Mineral Resource Consultant, Ge osim Services Inc.; and William Colquhoun, Pr Eng, FSAIMM, Principal
Process Manager, Amec Foster Wheeler Peru S.A. (Wood).
The Property is host to a high- sulfidation epithermal gold-silv er system hosted in altered tertiary age rhyolite
volcaniclastic rocks. Supergene-o xidized gold-silver mineraliza tion occurs on the south half of the Property.
The oxide gold-silver mineralizat ion consists of sub-vertical, northeast striking mineralized structures in an
envelope of lower grade mineraliz ation. The high-grade zones c onsist of relatively continuous mineralization
with gold grades ranging from 0.2 g/t Au to over 4.0 g/t Au and 10 g/t Ag to over 50 g/t Ag. Oxidation extends
from surface to approximately 100m – 200m below surface. The present PEA refers only to this oxidized gold-
silver mineralization occurring near surface.
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PEA Highlights
Pre-Tax NPV of US $55.1M at 8.0% discount rate
Pre-Tax Internal Rate o f Return (IRR): 21.7%
After-Tax NPV of US $37.8M at 8.0% discount rate
After-Tax IRR: 17.3%
Payback Period (f rom start of operations): 3 years
Initial Capital: US $92.8M
LOM Capital: US $106.1M
Estimated Average LOM Net Direc t Cash Cost (C1): US $498/Au oz payable equivalent
Estimated Average LOM All-In S ustaining Costs (AISC): US $519/Au oz payable equivalent
Mineral resources that are not mineral reserves do not have demonstrated economic viability. The PEA is
preliminary in nature and includes inferred mineral resources t hat are considered too speculative
geologically to have the economic considerations applied to them that would enable them to be categorized
as mineral reserves and there is no certainty that the results of the PEA will be realized. The financial
analysis in the PEA does not incl ude the 2.5% royalty associate d with the acquisition of the Property by
Orvana. The PEA study is conceptual in nat ure and the PEA mine plan is based on 100% inferred
resources. The projections, forecasts and estimates presented i n the PEA constitute forward-looking
statements and readers are urged not to place undue reliance on such forward-looking statements.
Additional cautionary and forward-looking statement information is detailed at the end of this news release.
PEA Key Inputs
Gold Price: 1,300 US$/oz
Silver Price 17 US$/oz
Construction: 2 years
Production: 10 years
Waste/Processed Feed: 1.02
Mine: 9M tons per year (Processed Feed + Waste)
Plant: 12,000 tons per day
Au Recovery: 87%
Ag Recovery: 52%
Au LOM Production: 410Koz
Ag LOM Production: 9,023Koz
NPV Sensitivity by Discount Rates
Discount Rate
(%)
Net Present Value
(USD M’s)
5 57.6
8 37.8
10 27.1
12 18.0
15 6.9
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PEA Inferred Resource
Estimate of Inferred Mineral Resource reported at 0.25 g/t AuEq Cut-off
COG g/t
AuEq
Tonnes
Mt Au g/t Ag g/t AuEq g/t Contained Metal
Au koz Ag koz
0.20 49.6 0.35 12.7 0.45 556 20,237
0.25 38.6 0.40 14.6 0.51 494 18,110
0.30 30.0 0.45 16.5 0.58 435 15,894
Notes:
1. Mineral Resource estimate prepared by Mr. R. Simpson, P.Geo. , of GeoSim Services Inc. with an effective date of 14 May
2019. Mineral Resources are classified using the 2014 CIM Definition Standards.
2. Gold equivalent (AuEq g/t) calculations were based on assume d metal prices of $1300/oz Au, and $17/oz Ag, recoveries of
87% Au and 52% Ag. AuEq = Au(g/t) + Ag(g/t) *0.0078
3. An optimized pit shell was generated using the following assumptions: metal prices/recoveries in Note 2 above; a 45° pit slope;
mining costs of $2.00 per tonne, processing costs of $5.20 per tonne, and general & administrative charges of $1.50 per tonne.
All amounts are expressed in US dollars.
4. Totals may not sum due to rounding.
5. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability.
PEA Mining & Processing
The mining method proposed for the Property in the PEA is conventional truck and shovel open pit mining. The
proposed recovery process will be crushing and agglomeration of mineralized material at a rate of 12,000 tpd,
stacking in 6 m lifts on a permanent heap leach and gold and si lver recovery from the heap leach pregnant
solution in a carbon Adsorption-Desorption-Recovery (ADR) plant and electrowinning to produce doré gold
bars.
Chris Wright of Wood supervised the preparation of the PEA, is independent of the Company and a qualified
person as defined by National I nstrument 43-101 and has reviewe d and approved the technical disclosure
reported herein. The PEA will be filed on SEDAR within 45 days from this news release.
Related-Party Transaction Exemption
Pursuant to Multilateral Instrument 61-101 – Protection of Mino rity Security Holders in Special Transactions
("MI 61-101"), entering into the Purchase Ag reement with the Vendor is a " related party transaction" as the
Vendor is indirectly owned by Orvana’s 51.9% shareholder. The Company is exempt from the requirements to
obtain a formal valuation or minority shareholder approval in connection with the Transaction contemplated by
the Purchase Agreement by virtue of sections 5.5(a) and 5.7(a), respectively, of MI 61-101, as neither the fair
market value of the subject matter of the Purchase Agreement, n or the fair market value of the consideration
for the Property exceeds 25% of the Company's market capitalization as calculated in accordance with MI 61-
101. The Purchase Agreement was considered and unanimously app roved by the board of directors of the
Company. Ms. Sara Magner abstained from voting on this matter.
About Orvana - Orvana is a multi-mine gold-copper-silver company. Orvana’s operating assets consist of the
producing El Valle and Carlés gold-copper-silver mines in north ern Spain and the producing Don Mario gold-
silver operations in Bolivia. Additional information is available at Orvana’s website (www.orvana.com).
For further information about the Company or this News Release, please contact:
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Nuria Menéndez
Chief Financial Officer
Joanne Jobin
Investor Relations Officer
T: 647 964 0292
Cautionary Statements - Forward-Looking Information
Certain statements in this news release c onstitute forward-looking statements or forw ard-looking information within the meaning of
applicable securities laws (“forward-looking statements”). Any statements that express or involve discussions with respect to p redictions,
expectations, beliefs, plans, proj ections, objectives, assumptions, potentials, fu ture events or performance (often, but not al ways, using
words or phrases such as “believes”, “expects”, “plans”, “estimates” or “intends” or stating that certain actions, events or re sults “may”,
“could”, “would”, “might”, “will” or “are projected to” be taken or achieved) are not statements of historical fact, but are fo rward-looking
statements.
This news release contains certain "forwa rd-looking statements" within the meaning of applicable securities legislation, includ ing, without
limitation, statements with respect to the results of the pre liminary economic assessment, including but not limited to the min eral resource
estimation, conceptual mine plan and operations, internal rate of return, sensitivities, taxes, net present value, potential recoveries, design
parameters, operating costs, capital costs, production data and economic potential; the timing and costs for production decisions; permitting
timelines and requirements; exploration and planned exploration programs; the potentia l for discovery of additional mineral res ources;
timing for completion of a feasibility study; timing for first gold production; and the Company's objectives and strategies. Fo rward-looking
statements are statements that are not historical facts which address events, results, outcomes or developments that the Company expects
to occur. Forward-looking statements are based on the beliefs, es timates and opinions of the Company's management on the date t he
statements are made and they involve a number of risks and uncertainties. Consequently, there can be no assurances that such statements
will prove to be accurate and actual results and future events c ould differ materially from those anticipated in such statement s. Forward-
looking statements involve significant known and unknown risks and uncertainties, which could cause actual results to differ materially from
those anticipated. These risks include, but are not limited to: risks related to uncertainties inherent in the preparation of preliminary economic
assessments, drill results and the estimation of mineral resour ces, including changes in the economic parameters; risks relatin g to not
securing agreements with third parties or not receiving requir ed permits; risks associated with executing the Company's objecti ves and
strategies, including costs and expenses, t he ability to acquire sufficient funding fo r the proposed project, as well as those risk factors
discussed in the Company's most recently filed management's discussion & analysis, as well as its annual information form dated December
20, 2018, available on www.sedar.com. Except as required by the securities disclosure laws and regulations applicable to the Co mpany,
the Company undertakes no obligation to update these forward-looking statements if management's beliefs, estimates or opinions, or other
factors, should change.