With an impressive acreage position of prime, well-researched sites already held at various levels of interest in the emergent diamond/gold regions of Sierra Leone, Oraco is well-positioned (especially when taking into account additional potential output from currently targeted acquisitions) to execute on their 25-30k carat/mo target within a 24-36 month window if negotiations pan out favorably. While most juniors in the diamond game are out hunting for new kimberlitic targets (peridotite rock formation type which typically forms/contains diamonds first discovered in Kimberley, Africa), Oraco is squarely focused on stable, near-term productivity vectors like high-grade alluvial/eluvial deposits too small for the majors, as well as projects that call for processing older kimberlite tailings reserves from larger mothballed mines.
The growth potential of this strategy for putting more metal concentrates (sold to smelters), refined/unrefined bullion bars, as well as unfinished diamonds and gem-quality diamonds (the company cuts and polishes some of the higher end gems before selling them) on a hungry global market’s doorstep is evident in relationships like the one formed with New York-based Ozuro Jewelry. The acquisition, distribution, and marketing agreement entered into with Ozuro pledges to give Ozuro first crack at diamonds and gold ahead of any other third party (active June 3, 2011 through June 3, 2014, with the price for gold being initially set at 90% of the London PM fix and diamonds initially set at 95% of the Rapaport Diamond Price Index, each as per date of sale) and showcases the shrewdness with which management has aligned a short-term production profile with tight end-market integration.
ORAC has assembled a network of primarily alluvial interests that play off a strong regional strategy for Sierra Leone, with a few examples showing brilliant deal engineering by Oraco (net revenue divisions expressed as gross value of recovery determined by government agencies less recovery/evaluation costs):
Tailings Number 5 (Kono District; estimated value of $300M with gross margin of 90%, or around $31.5M, due to low labor cost/high output; 70% of net revenues to wholly-owned subsidiary JYORK and 30% to local Gbense Chiefdom) – with an immediate move to trial mining (anticipated operational commencement is Q3 2012) helping to bring ORAC closer to the initial 2,500 carat/month and 500 oz Au production target for within the first year of operations, as well as recent estimates that place the project lifespan somewhere beyond a decade, this alluvial project targeting some 54.2M tons of diamondiferus gravel is the company’s immediate front-runner. Proximal to the Tailings Number 11 (some $40M in gold according to Behre Dolbear Report from Dec, 2006), the Tailings Number 5 is in final planning and ORAC anticipates ordering an independent NI 43-101 to estimate total diamond and gold bearing gravels, as well as a drilling program aimed at fleshing out the project dimension/potential further, considering the deposit is near surface and diamond bearing from surface to bedrock (about 50 feet, ideal for a low-cost strip mining operation). Initial plant design would incorporate a simple pan plant for processing the gravel, with automated X-ray flow sort, and a secondary grease belt recovery system.
Boroma (Kono District; net revenue split is 50% JYORK and 50% Boroma Gbense Chiefdom) – exceptionally rich little plot of about 10 acres just Northwest of Koidu that looks like a 2-month window for commencement. Operations would focus on processing previously pulled stone, as well as artisanal/alluvial mining focused squarely on the potential for high-quality, large stones evinced by previous (albeit minimal) site activity.
Nimini Hills (Kono District; 69% JYORK and 31% Nimikoro Chiefdom) – recent findings (reported June 5) of high-grade diamonds in the geologically analogous kimberlite dykes of nearby Stellar Diamonds, PLC, and Koidu Holdings (a subsidiary of BSG Resources LTD) offers abundant cause for ORAC shareholders to get excited about the potential of this 12,355-acre (as per the October 12, 2011 survey) alluvial/artisan diamond and gold site. Returns on bulk sampling from the neighboring Stellar kimberlite dyke showed as much as 90 carats per hundred tons on some 346 dry tons of kimberlite, with values as high as 4.45ct on individual diamonds. The Stellar/Kono dykes run straight towards the sizeable ORAC property (the initial contract for which mistakenly underestimated the total size of the property, placing it at only 500 acres due to a conversion error by the Nimikoro Chieftains, making the deal a huge value). A 50-acre area mapped within the concession during the survey looks exceptionally good for starting alluvial mining and ORAC expects to begin on this plot sometime in July, 2012, with JYORK already in the process of obtaining an exploratory license and a small scale mechanized mining license.
Zimmi (Pujehun District; 70% JYORK and 30% to Baysuagung-Gbeya Cooperative Mining Society) – a sprawling 35.4-mile alluvial diamond property originally developed back in the 80′s then mothballed before going into full operation due to the civil unrest in the region at that time. Large high-quality stones are indicated by extant data and the company’s own geological testing. ORAC is looking to evaluate the site for mechanized mining and explore further to validate the projections offered by the company’s considerable due diligence efforts (including internal development of all the necessary NI 43-101 prerequisites), which have drawn on all the available information from several years of previous drill, auger, and bulk sampling programs.
Oraco is widely respected in Sierra Leone for their commitment to corporate responsibility goals and the company constantly strives to enhance local communities by providing good jobs and infrastructure, while conducting comprehensive back-end community relations. Building trust with local communities and civic leaders is a fundamental element of ORAC’s business philosophy, and the only thing close to matching the company’s dedication to the people employed in areas around its mine sites, is the company’s steadfast emphasis on responsible stewardship of the land, its resources, and the flora/fauna.
For more information on Oraco Resources, Inc., please visit the company’s website at: www.OracoResourcesInc.com
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