Ann: Inside Briefing Interview with Mark Papendie, page-4

re: Ann: Inside Briefing Interview with Mark ... Found the report I was referring to from Cannacord dated 30 October.

• Our analyst recently spent three days in Brazil, inspecting Orinoco’s
Faina exploration projects (70% owned), encompassing the advanced
Cascavel high-grade gold project, the earlier stage Eliseo gold
exploration project and the more recently identified Tinteiro polymetallic
target. Included in the itinerary was a visit to Cleveland Minerals Premier
gold mine, located two hours drive from Cascavel by unsealed road.
• Whilst we have always understood that Cascavel hosts high grades,
nothing had prepared us for what we saw when we walked into the
Cascavel winze. Within minutes of chipping away at the the end of a
cross cut we were able to recover numerous pieces of the orebody with
extensive showings of visible gold from the weathered quartzite host
rock. It was a genuinely exciting event.
• The high-grade zone was obviously very rich. If a drill hole had
intersected the same zone it would probably have assayed many ounces
per tonne of ore. If it had been 30 cm away, it might have gone through a
barren zone and recorded little or no gold and left the observer
disappointed. Hence the difficulty in grade estimation. Drilling doesn’t
work well when there is such erratic distribution of gold, so the focus is
now on bulk sampling to assess recoverable gold.
• We were also keen to gain a better understanding of the high-grade silver
target which had set a rocket under the share price when the first assay
of 17.6m at 40 oz pt of silver was announced in May 2013. The
subsequent assays were disappointing, so it was important to find out
what was really happening with the follow-up work. We weren’t
disappointed.
• As the ASX release of 28/10/13 has shown, the 4.4m intercept of 730 gpt
Ag, including 1.05m at 2,510 gpt Ag (80 oz pt), shows there is still the
potential for a high-grade silver deposit. This hole was about 100m to the
west from the previous high-grade intercept, and about 30m deeper.
Thus we see the potential for a very sweet silver resource to add to the
project economics.
• Looking at the gold alone, we see potential for an initial low cost gravity
gold project at Cascavel. We speculate that a 300,000 tpa operation
costing US$10m could recover 40-50,000 oz p.a. on a head grade of 5
gpt, giving cash costs of less than US$500/oz. Test work and studies will
determine the probability of this scenario over the coming six months. In
due course we would expect to see a much larger operation.
• The Tinteiro polymetallic target, to the SW of Cascavel, has opened up
an exciting new dimension for OGX, with mapping and sampling
identifying gossans and extensive brecciation with good grades of gold,
copper and other metals. The zone of interest is already 5 km in strike,
demonstrating favourable folding and ideal targets for drilling.