Ortac Resources, Investment in Eritrea Set to Pay Dividends

Copper grades to outclass and outperform

When AIM listed exploration and mine development company Ortac Resources (LSE:OTC) informed the market in January that it had taken an investment stake in the private Eritrean focused exploration company Andiamo Exploration, the market took and instant like to the deal, Ortac shares rose over 10% in January on the back of the news.

Since the deal with Andiamo was announced, significant progress has been made on their flagship Eritrean copper gold project, Yacob Dewar, where last month the first assay results were released which have turned out to be pretty impressive including 53m at 1.38 per cent copper and 42.5 m at 1.32 per cent copper respectively, secured from an oxide ore body and at surface.

At the same time Ortac announced they had increased their stake in Andiamo to 25.37% in what is now a US$ 1.5 million investment with the option to take that stake to over 40%. This investment by Ortac is not to be sniffed at, clearly they see something in Eritrea and in particular the Yacob Dewar project that they like, least of which is the extensive level of high quality technical work and investment of over $10 million that Andiamo has already sunk into its Eritrea projects.

What I have picked up on is an interesting analogy between Ortac-Andiamo and Central Asia Metals (LSE:CAML) the Kazakhstan focused copper “waste dump” processor. The reason that I am making the connection between Ortac and CAML is that I was astonished to learn that CAML not only paid a dividend to shareholders in 2013 but is also planning to pay a dividend this year too………………and the really incredible point about this is that the grades of copper they are processing from their Kounrad dump are 0.10% from their oxide eastern dump and as little as 0.03% from other parts of their dump.

This is absolutely incredible and I have to say to CAML well done! Not only are you paying a dividend, you are also delivering real shareholder value  (stock is up 54% this year so far) and you are also proving technically that you can make a profit by processing copper at grades of 0.10% and you only own 60% of the Kounrad project!!!!!!!!!!! And this is your only cash-generating asset!!!!!!!!!!!

CAML Share Price    Jan to MayCAML stock has risen over 54%In the last 12 months

Which leads me nicely into Ortac. I understand that by next year Ortac-Andiamo will deliver a technical and economic assessment of Yacob Dewar. Subject to approval by the Eritrean authorities, and by the way they have the right to buy into the project, Andiamo could be awarded a mining licence. This leads me to my next point.

Ortac-Andiamo like CAML plans to use a solvent extraction, leaching method & electrowinning (SX-EW) process to recover the copper and produce a saleable copper cathode.

Its worth noting that CAML’s Kounrad waste dump processing plant was constructed within 21 months for a capital cost of $39m, $8m below the budget, so whilst their might be some short term dilution for Ortac, in the medium term it will be pretty easy to secure debt finance to get Yacob-Dewar into production, especially if the Eritrean government buy in.

The high copper grades that Yacob Dewar is currently delivering over more than decent lengths, all within oxide and at surface, essentially mean that Yacob Dewar could initially be mined pretty much as an open cast operation where their would be some blasting, shoveling to a heap, followed by exactly the same process that CAML are using at Kounrad, so not much difference in extraction costs.

I can categorically state that it will not cost Ortac-Andiamo the value of 1.2% copper to just blast and scoop, more like 0.1%.

To cap this all off, Yacob-Dewar will also deliver a high grade gold deposit that will further add to the economic viability of the project as a whole, an aspect  that CAML appears not to be getting from their waste dump treatment.

So really it’s quite a story.  Ortac is currently trading at 0.021 p and is one of the most liquid stocks on AIM trading over 6 million shares daily.

If CAML can deliver a dividend on 0.10 per cent copper

What can Ortac do on 1.3 per cent copper?

Central Asia Metals SX-EW Kounrad Project

Simple Processing method that would be a benchmark for Ortac-Andiamo’s Yacob-Dewar Project

Low cost Capex built in under 2 years and was producing 10,000th tonne of 99.99%-purity copper. within 12 months of commissioning.

Ariana Resources, Flagship Red Rabbit Project Boosted by New Gold & Silver Discoveries

Ariana Resources the Anglo Turkish gold exploration and mine development company advanced Thursday with news that it had discovered new gold and silver zones Kiziltepe Sector of the Red Rabbit Mining Project, in Turkey.

See below for for details of the RNS

Ariana Resources plc ("Ariana" or "the Company"), the Anglo-Turkish gold exploration and mine development company is pleased to announce the discovery of additional gold-silver bearing zones within the Kiziltepe Sector of the Red Rabbit Mining Project, which it holds in a joint venture with Proccea Construction Co.

Highlights:

• New highly anomalous zone of mineralisation identified at Kepez Far West with rock-chip samples of up to 6.3g/t Au + 54.8g/t Ag, 5.1g/t Au + 31g/t Ag and 3.5g/t Au + 17.3g/t Ag

• Mineralised zone extended to over 1.6km in strike length at Kepez West and Far West, containing alteration and high-grade quartz veins

• Trenching completed at Camalani identifies several anomalous elluvial quartz fragments with grades of up to 1.9g/t Au + 0.3g/t Ag, 1.2g/t Au + 91.2g/t Ag and 0.9g/t Au + 77.2g/t Ag

• Significant resource upside remaining, with only 6% of the total vein system mapped across the Kiziltepe Sector having received resource drilling

Dr. Kerim Sener, Managing Director, commented:

"The latest sampling in the Kepez Far West area of our flagship Red Rabbit project has returned exciting results, and confirms the potential of the area to host a mineralised structure of over 1.6km in length.  We have previously drill-tested the far eastern end of this structure and intercepted 8m @ 3.65 g/t gold equivalent and have evidence that the mineralised structure continues at depth.

"We have now established over ten new drill targets across the Kiziltepe Sector, many of which are located within agricultural land and will not require forestry permits to be drill tested. Of 34km of veins mapped and sampled across the region only 2km have been resource drilled and have yielded JORC reserves of 1.1Mt @ 3.1 g/t Au and 39.8 g/t Ag.  We expect to identify significant further resources across this region that have the potential to increase mine life well beyond eight years."

Kepez West Sampling

In September 2013, Ariana announced the discovery of a high-grade zone of mineralisation encountered at the western end of the Kepez West structure* (Figure 1).  This area is referred to as Kepez Far West.  A second phase of exploration was recently undertaken to follow-up on a broadly east-west trending corridor of kaolinite-illite alteration, which continued beyond the known area of mineralisation.  The programme consisted of a 3.9km x 1.5km portable X-Ray Fluorescence ("XRF") soil study and aimed to comprehensively cover the east-west trending alteration zone.  

A total of 1,500 XRF readings were taken and a full geochemical analysis was completed.  Trends in trace element geochemistry, particularly for certain pathfinders such as arsenic and antimony were associated with known zones of mineralisation.  A new area extending a further 500m west of Kepez Far West was defined by anomalous arsenic trends and textured quartz vein float material.  Assay results from randomly selected quartz float samples returned with grades of 6.28g/t Au + 54.8g/t Ag, 5.09g/t Au + 31g/t Ag and 3.54g/t Au + 17.3g/t Ag.  The new area of mineralisation remains open to the west.  Further work will commence later this year to refine several drill targets to include within a future drilling programme. 

Figure 1: Kepez West and Kepez Far West discoveries identified from XRF geochemistry superimposed on satellite imagery.  A quartz vein bearing structure can be traced for over 1.6km in this area in addition to associated alteration.  The structure is significant due to the highly anomalous gold and silver grades and due to its ENE-trending orientation, which is not typical of the orientation of mineralised structures elsewhere in the project area.

* Kepez West occurs to the west of Kepez North within which the Company has identified an Indicated JORC resource of approximately 9,000 oz Au equivalent.  Kepez North is located 6.5km north-east from Kiziltepe. 

Camalani Trenching

In addition to the Kepez Far West work, the team have been working throughout the winter on a series follow-up targets.  Since obtaining access to the N2D (Newmont Two Decade) database early last year, the team have generated over 380 exploration targets within 75km of the Kiziltepe mine site.  Currently over 90 targets have been followed up, including several important targets within the Sindirgi Gold Corridor.  As part of this on-going work, 194m of trenching was completed within the Company's 100% owned Camalani licence located approximately 16km east of the planned Kiziltepe mine.  Results have identified a zone containing several anomalous elluvial quartz fragments (1.89g/t Au + 0.3g/t Ag, 1.205g/t Au + 91.2g/t Ag and 0.89g/t Au + 77.2g/t Ag) associated with a Miocene conglomerate horizon occurring between overlying and underlying volcanic tuffs.  Further work is currently on-going to locate the primary source of the elluvial fragments.  

Current Exploration Plans

The Ariana team are currently in an advance stage of initiating a 500km2 airborne geophysics programme, designed to cover all of the Kiziltepe Sector tenements including all the new targets identified above.  This geophysical programme is to be undertaken to further enhance our understanding of the structural architecture of the region and will likely lead to the identification of several new conceptual drilling targets.  Furthermore, early preparations are being undertaken for a drilling programme on the Kizilcukur and Karakavak prospects and scheduled to commence in Q3 2014.