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Ortac Resources Ltd

  • BY: Andrew Hore |
  • POSTED: 16/08/2012 |

Slovakia-focused Ortac Resources Ltd is progressing with a pre-feasibility study for the Sturec project, which has a JORC resource of 1.36m ounces of gold equivalent.

There are more than one million ounces of gold in measured and indicated categories at grades above 0.44g/t which makes open pit mining commercial. The scoping study came up with a post-tax net present value of $309m.

The pre-feasibility study should be delivered by the end of March and this will enable a maiden JORC reserve figure to be announced.

The 100%-owned project is near to the small town of Kremnica in central Slovakia. The scoping study was based on average production of 86,000 ounces over an 11 year mine life. The estimated average cash cost would be $508/ounce and capex of $155m would be required.

The main uncertainty is whether local opposition could stop the mine being developed. There was previously a small open pit mine in the licence area.

Ortac also has eastern Slovak licences and it continues to explore on these licences with an updated mineral resource estimate for Zlata Bana being calculated.

Ortac has £7.2m in the bank and a £20m equity financing facility from Darwin Strategic lasting three years. Darwin’s majority shareholder is Henderson, which owns 1.1% of Ortac. 

RFC Ambrian has a target price of 3.2p a share and the broker believes that Ortac could move into profit in 2015.

At 0.47p a share, down 0.045p, Ortac is valued at £10.8m.

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