Orvana Provides Update ON Don Mario Operation; Announces US$11.3 Million Debt Financing
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For Immediate Release TSX:ORV
Date: July 4, 2017 #07-2017
ORVANA PROVIDES UPDATE ON DON MARIO OPERATION; ANNOUNCES US$11.3
MILLION DEBT FINANCING
TORONTO, ONTARIO, July 4, 2017 - Orvana Minerals Corp. (TSX:ORV) (the “Company” or “Orvana”)
is pleased to provide an update on its efforts to e xtend the life of its Don Mario operation in Bolivi a. Further,
the Company announces that it has arranged debt fin ancing in the aggregate amount of US$11.3 million ( the
“Facilities”) from Banco BISA S.A. (“BISA”) in Boli via. The primary use of these proceeds will be used to
construct a major tailings storage facility expansi on project (“TSF Project”) that will add sufficient capacity to
support up to an additional three years of operations beyond Q2 2018.
Jim Gilbert, Chairman and CEO, stated “Don Mario wa s the foundational operation for Orvana, and has
contributed significant gold production and free ca sh flow generation for many years. We are very plea sed
with the progress we are making to clearly define w hat we are hoping to be a profitable future for Don Mario.
Currently, we are finalizing an open pit mine desig n for potential near-term mining of the Cerro Felix satellite
deposit. In parallel, we are completing an advanced stage confirmatory test program on processing of
significant existing surface mineral resource stock piles. Management believes the conclusion of these
projects at Don Mario will justify the planned TSF Project. In that regard, we have successfully arran ged
competitive debt financing with BISA, who continue to be a key local stakeholder of Don Mario, to fund the
TSF Project. We are grateful for their ongoing support.”
Don Mario Update
Mining activities are currently taking place in the Lower Mineralized Zone (“LMZ”) that forms part of the
existing open pit. The Company has been mining and processing LMZ ore since Q3 2016. Operational
activities at LMZ are scheduled to end during Q2 20 18. The Company is actively evaluating various proj ects
that are at various stages of completion and manage ment anticipates these will result in extension of
operational life beyond Q2 2018. A summary of these ongoing projects is below:
Near-term projects:
Cerro Felix Mining:
• Cerro Felix is a satellite mineral deposit located 500 m from the LMZ. The Company published
resource estimates effective September 30, 2016. Es timates include an indicated mineral
resource of approximately 490,000 tonnes grading 3. 15 g/t gold, 0.09% copper and 2.53 g/t
silver, containing approximately 49,600 ounces of g old, 0.97 million pounds of copper, and
40,000 ounces of silver 1.
• From 2009 to 2011, approximately 207,000 tonnes of ore at an average grade of 1.77 g/t of gold
was processed from mineralized zones north-west and south-east of the previously mined Upper
Mineralized Zone (“UMZ”), including Cerro Felix.
• Near surface mining activities have been undertake n in recent months. A total of 15,000 tonnes
have been extracted and processed as part of a blen ded plant feed during FY 2017 to date.
• An open pit mine design is currently being finaliz ed, incorporating a recently completed
geotechnical evaluation. The Company is aiming to c ommence pre-stripping activities during Q1
2018.
1 Mineral resource estimates were prepared by DGCS SA under supervision of Gino A. Zandonai, who is an independent Qualified
Person under NI 43-101. See “ Don Mario Mine Operation 2016 Technical Report” dated January 27, 2017 filed on SEDAR under
Orvana’s profile.
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Mineral Stockpile processing:
• As at September 30, 2016, Don Mario surface stockp iles contained a measured mineral
resource of approximately 2.2 million tonnes, grading 1.84 g/t gold and 1.89% copper 2.
• Don Mario has had a successful track record of pro cessing this material as part of a blended
feed into the processing plant (approximately 237,400 tonnes in FY 2016 and FY 2017 to date)
• Initial test results have yielded positive indicat ions towards the possibility of producing a copper
concentrate from this material, and the Company is now completing further testing to optimize
grade.
• The Company has received positive commercial indic ations from potential third party off-takers
for such copper concentrates.
Long-term projects:
Tailings re-processing:
• Prior to commencement of mining from the LMZ, mini ng activities took place in the UMZ open pit
from 2012 to early 2016. During this period, ore wa s processed through a flotation circuit and
achieved an average gold recovery of approximately 55% in the production of copper
concentrates. Management believes that tailings mat erial deposited as a result of this process is
therefore expected to contain significant gold content.
• The Company has commenced an evaluation of reproce ssing of tailings, to determine the
viability of recovering gold from the material depo sited in the tailings storage facility. Drilling is
planned to obtain geotechnical and metallurgical pa rameters in order to select conceptual
processing plan and develop a full economic case.
• At the present time, the Company aims to execute t his project subsequent to the completion of
the near-term projects above.
Exploration – Las Tojas Deposit:
• Las Tojas is a satellite deposit located approxima tely 12 km northwest from the Don Mario Mine.
• Drilling of the Las Tojas deposit have been carrie d out by Orvana at various times between 1996
and 2008, during which 110 holes totalling 15,080 m of drilling was completed. Drilling was
carried out along northeast-southwest oriented sect ion lines spaced about 50 and 100 m apart.
Orvana completed two additional drill holes at Las Tojas in 2015 and these tested depth
extensions of the known mineralized zone. Both hole s intersected narrow mineralized zones.
The Las Tojas deposit is not included in any of the resource or reserve estimation work covered
by the Company’s most recent Don Mario 43-101 Report or Annual Information Form.
• A limited amount of material from Las Tojas was mi ned from 2009 to 2011 and was successfully
processed through the carbon in leach circuit at that time.
• A new drilling campaign, testing the southern exte nsions of previously mined areas of Las Tojas,
is planned to be completed in the coming months wit h the objectives of establishing a NI 43-101
compliant mineral resource.
TSF Project
The TSF Project is required to support processing a ctivities at Don Mario beyond Q2 2018. The TSF Proj ect
will include the construction of a 4 meter raise to provide storage capacity for up to 3 additional ye ars. The
Company engaged Amec Foster Wheeler (“AMEC”) to evaluate alternatives, provide design parameters and
engineer the TSF Project. As a result, AMEC develop ed a capital cost estimate of US$9.7 million within 10%
accuracy, including owner’s costs and 10% contingen cy. Execution of the TSF Project is expected to
2 Mineral resource estimates were prepared by DGCS SA under supervision of Gino A. Zandonai, who is an independent Qualified
Person under NI 43-101. See “ Don Mario Mine Operation 2016 Technical Report” dated January 27, 2017 filed on SEDAR under
Orvana’s profile.
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commence immediately to take advantage of the favor able dry season in Bolivia, with expected completio n
in Q2 2018.
BISA Facilities
The BISA Facilities are comprised of two separate a greements, both of which are secured by certain ass ets
of Don Mario without recourse to Orvana.
Term facility
• Principal amount of approximately US$8.34 million (denominated in Bolivianos);
• Annual interest rate of 5.3% (fixed rate);
• Scheduled drawdowns between closing and December 2 017;
• Quarterly interest payments; equal quarterly princ ipal repayments commence April 2018 until
January 2021.
Revolving working capital facility
• Principal amount of up to approximately US$2.97 mi llion (denominated in Bolivianos);
• Renewable every 6 months until November 2020;
• Annual interest rate determined at date of drawdow n and dependent on form of drawdown;
• Drawdown may be in the form of cash for up to US$1 .97 million, bank guarantees for up to
US$2.97 million, or a combination of the two up to the limit of US$2.97 million.
The pre-existing bank loan with BISA (the “BISA Loa n”) is not affected by the BISA Facilities and will
continue to be repaid in the normal course with ful l repayment scheduled for September 2017. The princ ipal
balance outstanding on the BISA Loan is $2.8 million as at June 30, 2017.
Scientific and technical information in this news r elease has been reviewed and approved by Gino A.
Zandonai, a Qualified Person under the terms of Nat ional Instrument 43-101. Mr. Zandonai is independen t of
Orvana. Mr. Zandonai has verified the technical dat a disclosed in this news release not related to the current
mineral resource estimates disclosed herein.
About Orvana
Orvana is a multi-mine gold and copper producer. Or vana’s operating assets consist of the producing go ld-
copper-silver El Valle and Carlés mines in northern Spain and the producing gold-copper-silver Don Mar io
mine in Bolivia. Additional information is available at Orvana’s website (www.orvana.com).
For further information please contact:
Jeff Hillis
Chief Financial Officer
T (416) 369-6281
Cautionary Statements – Forward-Looking Information
Certain statements in this information constitute f orward-looking statements or forward-looking inform ation within the
meaning of applicable securities laws (“forward-loo king statements”). Any statements that express or i nvolve discussions
with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, poten tials, future events or
performance (often, but not always, using words or phrases such as “believes”, “expects”, “plans”, “es timates” or
“intends” or stating that certain actions, events o r results “may”, “could”, “would”, “might”, “will” or “are projected to” be
taken or achieved) are not statements of historical fact, but are forward-looking statements.
The forward-looking statements herein relate to, am ong other things, Orvana’s ability to achieve impro vement in free
cash flow; the potential to extend the mine life of Don Mario beyond their current life-of-mine estima tes, including
specifically, but not limited to in the case of Don Mario, the completion of the TSF Project, the mini ng of the Cerro Felix
deposit, the processing of the mineral stockpiles and the reprocessing of the tailings material; Orvana’s ability to optimize
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its assets to deliver shareholder value; the Compan y’s ability to optimize productivity at Don Mario ; estimates of future
production, operating costs and capital expenditure s; mineral resource and reserve estimates; statemen ts and
information regarding future feasibility studies an d their results; future transactions; future metal prices; the ability to
achieve additional growth and geographic diversific ation; future financial performance, including the ability to increase
cash flow and profits; future financing requirements; and mine development plans.
Forward-looking statements are necessarily based up on a number of estimates and assumptions that, whil e considered
reasonable by the Company as of the date of such st atements, are inherently subject to significant bus iness, economic
and competitive uncertainties and contingencies. Th e estimates and assumptions of the Company containe d or
incorporated by reference in this information, whic h may prove to be incorrect, include, but are not l imited to, the various
assumptions set forth herein and in Orvana’s most r ecently filed Management’s Discussion & Analysis an d Annual
Information Form in respect of the Company’s most r ecently completed fiscal year (the “Company Disclos ures”) or as
otherwise expressly incorporated herein by referenc e as well as: there being no significant disruption s affecting
operations, whether due to labour disruptions, supp ly disruptions, power disruptions, damage to equipm ent or otherwise;
permitting, development, operations, expansion and acquisitions at Don Mario being consistent with the Company’s
current expectations; political developments in any jurisdiction in which the Company operates being c onsistent with its
current expectations; certain price assumptions for gold, copper and silver; prices for key supplies b eing approximately
consistent with current levels; production and cost of sales forecasts meeting expectations; the accur acy of the
Company’s current mineral reserve and mineral resou rce estimates; and labour and materials costs incre asing on a
basis consistent with Orvana’s current expectations.
A variety of inherent risks, uncertainties and fact ors, many of which are beyond the Company’s control , affect the
operations, performance and results of the Company and its business, and could cause actual events or results to differ
materially from estimated or anticipated events or results expressed or implied by forward looking sta tements. Some of
these risks, uncertainties and factors include fluc tuations in the price of gold, silver and copper; t he need to recalculate
estimates of resources based on actual production e xperience; the failure to achieve production estima tes; variations in
the grade of ore mined; variations in the cost of o perations; the availability of qualified personnel; the Company’s ability
to obtain and maintain all necessary regulatory app rovals and licenses; the Company’s ability to use c yanide in its
mining operations; risks generally associated with mineral exploration and development, including the Company’s ability
to continue to operate Don Mario; the Company’s abi lity to acquire and develop mineral properties and to successfully
integrate such acquisitions; the Company’s ability to execute on its strategy; the Company’s ability t o obtain financing
when required on terms that are acceptable to the C ompany; challenges to the Company’s interests in it s property and
mineral rights; current, pending and proposed legis lative or regulatory developments or changes in pol itical, social or
economic conditions in the countries in which the C ompany operates; general economic conditions worldw ide; and the
risks identified in the Company’s Disclosures under the heading “Risks and Uncertainties”. This list i s not exhaustive of
the factors that may affect any of the Company’s fo rward-looking statements and reference should also be made to the
Company’s Disclosures for a description of additional risk factors.
Any forward-looking statements made in this informa tion with respect to the anticipated development an d exploration of
the Company’s mineral projects are intended to prov ide an overview of management’s expectations with r espect to
certain future activities of the Company and may not be appropriate for other purposes.
Forward-looking statements are based on management’s current plans, estimates, projections, beliefs an d opinions and,
except as required by law, the Company does not und ertake any obligation to update forward-looking sta tements should
assumptions related to these plans, estimates, proj ections, beliefs and opinions change. Readers are c autioned not to
put undue reliance on forward-looking statements.
The forward-looking statements made in this informa tion are intended to provide an overview of managem ent’s
expectations with respect to certain future operati ng activities of the Company and may not be appropr iate for other
purposes.
Cautionary Notes to Investors – Reserve and Resourc e Estimates
In accordance with applicable Canadian securities r egulatory requirements, all mineral reserve and min eral resource
estimates of the Company disclosed in this news release have been prepared in accordance with NI 43-101, classified in
accordance with Canadian Institute of Mining Metall urgy and Petroleum's "CIM Standards on Mineral Reso urces and
Reserves Definitions and Guidelines" (the "CIM Guidelines").
Pursuant to the CIM Guidelines, mineral resources h ave a higher degree of uncertainty than mineral res erves as to their
existence as well as their economic and legal feasi bility. Inferred mineral resources, when compared w ith measured or
indicated mineral resources, have the least certain ty as to their existence, and 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 res ult of continued
exploration. Pursuant to NI 43-101, inferred minera l resources may not form the basis of any economic analysis,
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including any feasibility study. Accordingly, readers are cautioned not to assume that all or any part of a mineral resource
exists, will ever be converted into a mineral reserve, or is or will ever be economically or legally mineable or recovered.