Orinoco Gold (ASX: OGX) chief Mark Papendieck returned from a trip to the Company's Faina Goldfields Project in earlier this week armed with the first of what could be a series of exciting announcements from the emerging resource play in central Brazil.
Orinoco has been developing an exploration decline into the heart of the ore zone at its high-grade Cascavel Project, which forms part of the broader 70%-owned Faina Project.
The purpose of the exercise is to give the Company's geologists a better handle on the orientation, grade and extent of the mineralisation by exposing the ore zone and enabling it to effectively "trial mine" the deposit.
Previous diamond drilling at Cascavel has been a somewhat hit-and-miss affair because the style of mineralisation at Cascavel is coarse, nuggetty gold, which is very hard to intersect through drilling.
This means that bulk sampling and trial mining is the only way to gain representative samples of the orebody.
The decision to develop the exploration decline has proven to be an important breakthrough for Orinoco, with the first batches of assays delivering some truly mouth-watering results - and plenty of visible gold.
Results from contiguous 0.5m by 0.5m panel samples reported this week included bonanza grades of 4m @ 148.5g/t just 27m from surface, including a zone of 0.46m @ 417g/t.
These results are directly contiguous with previously reported panel sample results of 5m @ 113g/t and, together, represent a continuous zone both along strike and down-plunge of 9.7m @ 125g/t gold.
Orinoco said that individual high grade shoots encountered to date have a greater strike extent (up to 12m) than previous interpretations, with the results continuing to demonstrate the continuity and exceptional grade of the mineralisation.
With the exploration decline already revealing a great deal about the Cascavel mineralisation (and more results in the pipeline), Orinoco also has several other strategies up its sleeve to drive the project towards commercial development.
The information from the decline will help guide resource definition drilling later this year. Orinoco has also recently struck a contract mining deal with fellow Brazilian miner Cleveland Mining Company (ASX: CDG) to develop a small-scale open pit operation at Cascavel and transport the ore to Cleveland's operating Premier Gold Mine for treatment.
This joint mining venture, which should kick off early next year, will deliver valuable cash flow to Orinoco from its share of the profits while also providing vital information on the grade and size of the deposit.
Orinoco plans to apply the knowledge gained to the broader region, and to its newly acquired Sertao gold mine, which it has acquired from Troy Resources (ASX: TRY).
The overall objective is to develop multiple high-grade production hubs, potentially feeding a centrally located, low CAPEX gravity gold plant which it plans to build in its own right.
In the meantime, Orinoco has been quietly drilling its nearby Tinteiro project, a polymetallic system which it believes has all the hallmarks of a massive IOCG prospect. Results from the most recent round of drilling are due in the coming weeks and could provide an intriguing second string to the Orinoco bow.
OGX Price at posting:
12.5¢ Sentiment: Buy Disclosure: Held
