OROYA MINING LIMITED - ASX: ORO

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Description

Oroya is focussed on the discovery of large, bulk tonnage gold, base metal and nickel deposits because we believe that there is an enduring market for these commodities and that such deposits are typically well suited to meet the demands of emerging trends in mining, materials handling and processing technologies.

Lachlan Fold Belt Projects, NSW & Victoria (100%)

Oroya holds and is actively exploring an extensive gold and base metal exploration project portfolio in the Lachlan Fold Belt of New South Wales and Victoria. Oroya recognizes the emerging importance of the Lachlan Fold Belt as a gold producing province, and the paucity of modern exploration in many areas with the Company’s primary focus directed towards exploration for large tonnage disseminated and high grade vein style gold deposits. A number of new mines and advanced exploration projects based on such deposits have emerged in the region over recent years and as a result, the Lachlan Fold Belt now competes strongly with Western Australia in terms of new mine gold production.

Oroya’s focus in the Lachlan Fold Belt is the discovery of large gold mineralised systems using rapid exploration techniques in areas where there has been inadequate previous exploration. Oroya has substantially completed the company’s campaign of regional geochemical exploration in New South Wales and Victoria, commenced in late 2006, and which has successfully produced a ‘pipeline’ of targets prospective for bulk tonnage gold and base metal deposits. The current phase of Oroya’s exploration strategy involves detailed follow-up of selected geochemical targets to define drilling targets. This work includes infill geochemical stream sediment sampling, geological mapping and soil and rock chip geochemical sampling. Superfluous ground will be relinquished as high-priority targets are progressively refined to identify drill targets.

Oroya’s focus on large mineralised systems has attracted attention and enquiries regarding possible joint venture from major companies and these will be pursued.

Wiagdon Thrust Joint Venture, NSW (Oroya free-carried with 30% - gold and base metals)

As announced to ASX on 7 December 2009, Oroya has farmed-out its Sofala gold project to ORT Limited (ORT) under a joint venture called Wiagdon Thrust Joint Venture (WTJV). The WTJV comprises 10 gold and base metal exploration licences (4 granted and 6 under application) covering about 2,000 square kilometres in central New South Wales.

The main objective of the WTJV will be the drilling 6 gold and base metal targets identified by Oroya through their regional geochemical exploration of the area. Oroya’s work was aimed at the discovery of large tonnage, disseminated and vein-hosted gold and base metal deposits.

Under the terms of the WTJV, ORT may earn a 70% interest by funding exploration and administration to a value of $1.5 million over a two year period during the earn-in phase. After the earn-in phase, Oroya will be free-carried with a 30% interest to completion of a Feasibility Study and a Decision to Mine. Following a Decision to Mine, both JV parties will contribute to development expenditure in accordance with their interest or dilute under a standard dilution formula. If a JV party’s interest dilutes to 10% or less, that party will be deemed to have withdrawn from the JV and their interest will convert to a 2% net smelter royalty.

The WTJV includes an Area of Influence in which interests in tenements acquired by either party within 25 kilometres of the project tenements will be included in the joint venture. The WTJV covers Ordovician to Devonian metasediments, volcanics and granitoids of the north-eastern Hill End Trough, within the productive Central West region of NSW.

The Joint Venture is targeting the northern Hill End Trough for large tonnage disseminated gold deposits. The potential of the region is indicated by the presence of:

* Several antimony sulphide deposits in the project area, including Edwards, Goodiman, Rockwell, Razorback and Ford’s Creek prospects which indicate potential for large tonnage gold-antimony deposits.
* Numerous alluvial gold occurrences in the target area(s).
* Large multi-element sulphide mineralized systems, including the Glasscock gold-base metal prospect, the Mt Pleasant molybdenum deposit, the Spring Gully gold deposit, Springfield gold deposit and Bowdens silver-zinc deposit.
* Production of over 2 million ounces of gold from Slate Belt-style deposits (Hill End, Windeyer, Gulgong, Sofala) in adjacent areas which indicate that appropriate mineralizing environments are present.
* The regional-scale Wiagdon thrust fault system which cuts a complex array of Ordovician to Devonian sediments and volcanics and is a potential contributing structure to a favourable mineralizing environment.

Oroya’s research confirms that the region has been inadequately tested by modern regional exploration techniques focussed on large copper-gold systems.

OTHER LFB PROJECTS IN NSW

As announced to ASX on 12 November 2009, Oroya is vending the Mt Barrett (gold, rare earth elements & base metals), Moruya (gold) and Pambula (gold) projects into a proposed Initial Public Offering (IPO) of Mammoth Resources Limited (Mammoth). Further details are available under “Mammoth Resources Limited”. Pambula (Oroya 100%) – Disseminated, stockwork and associated high-grade vein epithermal gold mineralization has been historically mined in the Eden-Pambula region. Previous gold production exceeds 2 tonnes, mainly from hard rock sources. Moruya (Oroya 100%) – The project area covers most of the historic Moruya and Narooma goldfields. Oroya’s main exploration target in the Moruya Gold Project area is bulk tonnage gold-silver mineralization hosted by intrusive rocks. Past production in the Moruya area, including small tenements excised from Oroya’s ground, was at least 1.5 tonnes of gold from hard-rock production.

Club Terrace Gold Project, VIC (Oroya 100%)

Oroya is exploring Club Terrace for large, sediment-hosted gold and base metal deposits along 80 strike kilometres of the Combienbar - Buldah fault systems. The Club Terrace project includes 3 exploration licences and 3 exploration licence applications in the East Gippsland area of Victoria. The tenements cover part of the regional-scale Combienbar Fault system which extends from the Bemm River goldfield near the south coast of Victoria into Oroya’s Craigie tenement in New South Wales on the border.

The Combienbar Fault and associated structures are well defined in aeromagnetic data and may be traced for over 100 kilometres, from Bass Strait northwards into New South Wales. There is evidence of large displacements and multiple movements over a very long period, from at least the Ordovician through to the Carboniferous providing both structural sites and a long timeframe for mineral emplacement.

Devonian base metal occurrences including lead, zinc, copper and molybdenum sulphides at Boulder Flat and several other localities, are directly related to the Combienbar Fault. There is also a strong spatial association with a number of primary and alluvial gold deposits, including the Gippsland-Boulder Gold Mine which has a reported production of 4,000 ounces of gold, the Club Terrace-Poddy Creek goldfield and several others, some of which have only been revealed by Oroya’s recent work. Large quartz veins, breccia and shear zones are also a feature of the fault systems which are considered by Oroya to be positive exploration vectors for gold mineralization.

The regional trend and structural associations of gold and base metal anomalies generated by the Company’s first exploration venture in eastern Victoria significantly re-rates the potential of this previously under-explored region. Oroya and its consultants are currently reviewing the recent results to consider the next phase of work and to assist with developing methods to be used on other targets in the project area.

Mt Piper, VIC (Oroya 100%)

The Mt Piper Gold Project is located in central Victoria, 80 kilometres north of Melbourne. The principal exploration target is disseminated gold-antimony mineralization.

The latest drainage results are encouraging and confirm a new zone anomalous in gold in an area where mineralisation was previously unknown (locality 1 on plan). The new results include two distinctly anomalous sample sites with BLEG (Bulk Leach Extractable Gold) values up to 23.3 ppb (parts per billion) in one gully and 4.5 ppb gold in an adjacent gully. These values are supported by anomalous -80# (minus 80 mesh) drainage samples from the same locations with values up to 4.1 ppb gold, 4,100 ppb antimony and 5,800 ppb arsenic. The reliability of the results from the more anomalous of these sites was confirmed by duplicate sampling and analysis.

The latest results in this zone support Oroya’s earlier sampling, and when combined, they indicate a source that has been shedding mineralisation over a minimum of 2.5 kilometres in strike length. Other BLEG drainage results above 2 ppb gold suggest a possible extension of the same zone for a further 3 kilometres southwards. Values reach 6,900 ppb antimony/10,000 ppb arsenic to the south and 10,200 ppb antimony/5,800 ppb arsenic to the north of this new zone.

The combination of antimony and arsenic with gold is characteristic of the type of gold mineralisation targeted at Mt Piper by Oroya. This geochemical association further confirms the adopted geological model because it is characteristic of the major Fosterville ore bodies in production east of Bendigo and the Nagambie gold mine operated to the north of Oroya’s tenements in the 1980s. These are large tonnage deposits with sulphide-locked, micron-sized (very fine grained) gold which shed negligible alluvial gold into adjacent streams and which were therefore not a type of deposit easily discovered by 19th century prospectors.

Two other sites with low-level anomalies and similar elemental associations were also identified from the recent -80# sampling. One is near Pyalong (locality 2) and has 2.3 ppb gold (BLEG), 2.5 ppb gold (-80#) and 6,700 ppb arsenic (-80#). The other new site (locality 3) is close to Seymour and returned 2.2 ppb gold (-80#) with anomalous values of 2,200 ppb antimony and 6,100 ppb arsenic. This site is well north of, but along strike from previous Oroya BLEG anomalies at Heywood Hill where values to 2.9 ppb gold and antimony values to 2,600 ppb and arsenic to 6,000 ppb were obtained.

OTHER LFB PROJECTS IN VICTORIA

Ballarat North (Oroya 100%) – Encompasses the northern extensions of the active Ballarat goldfield whose historic production is estimated at 15.2 million ounces of gold, and parts of the historic Creswick Goldfield. Oroya’s principal target is primary quartz-vein and stockwork style gold deposits on projected strike extensions of the Ballarat West goldfield, where coarse gold in quartz veining was reported during 1860s mining of the Deadhorse Deep Lead (buried palaeoplacer) which produced 60,000 ounces of gold and which cuts across the projected extensions. In November 2007, a joint venture commenced with Range River Gold Ltd (RNG:ASX) to explore the property. Range River has planned a traverse of three 400 metre deep diamond holes.

Orbost (Oroya 100%) – Oroya is exploring for Cadia-style porphyry copper-gold deposits at Orbost, 30 kilometres west of Club Terrace. Three exploration licence applications cover a regional copper metallogenic zone which is prospective for granodiorite-hosted copper-gold mineralisation. In the 1970s and 1980s, US explorer Pickands Mather and others discovered porphyry copper mineralisation associated with granodiorites in this area, and drilled a limited number of diamond core holes. Initial investigation of previous work by Oroya reveals that original drill core remains in storage and that systematic gold assaying was not undertaken in either drill core or in geochemical drainage and soil sampling, leaving the way open for Oroya to demonstrate that the region has untested potential for the discovery of Cadia-style porphyry copper-gold mineralisation.

Beaufort (Oroya 100%) – The Beaufort Gold Project is centred on the township of Beaufort and covers the historic Fiery Creek gold field where economically very significant high-grade surface alluvial and deep lead gold deposits were mined for many decades. In November 2007 a joint venture with Range River Gold Ltd (RNG:ASX) to explore the property commenced. Approval for a Ground Intrusive Work Plan for further work, including drill testing, was approved during the December 2009 quarter by the Department of Primary Industries in Victoria.

ROE HILLS, WA (Oroya 100%)

Roe Hills is located about 120 kilometres east-southeast of Western Australia’s principal gold mining centre of Kalgoorlie, 85 kilometres east of the major nickel centre of Kambalda.

The project lies within the highly prospective Norseman-Wiluna greenstone belt that forms part of the Archaean Yilgarn Craton. The geology of the project comprises a complex assemblage of mafic, ultramafic and sedimentary units. A thick layer of laterite, lake sediments and aeolian sand covers most of the project area.

The subject of this exploration is a belt of ultramafic rocks over 30 kilometres in extent. The previous discovery of Kambalda-style nickel sulphides, including a drill intersection of sulphides averaging 6.15% nickel and 0.38% copper over 0.5 metres from 155 metres depth in diamond drill hole ROE 114, encourages a sustained effort.

Nickel Sulphide Mineralisation

Limited historical drill testing at Roe Hills has identified nickel sulphide mineralisation both within the ultramafic host rocks and also on their footwall contacts. Nickel sulphide mineralisation generally appears to conform to the Kambalda style of nickel deposit, where sulphides are characteristically located in embayments or troughs under the ‘channel flow facies’ of the host komatiite.

At the Talc Lake Prospect, previous diamond drill hole ROE 114 intersected 0.5 metres at 6.15% Ni and 0.38% Cu from 155 metres in disseminated matrix sulphides, within a 128 metre interval of talc-carbonate ultramafics on the southernmost line of drilling and electromagnetic.

At the Roe 2 Prospect, disseminated nickel sulphides were intersected in diamond drill hole ROE 2 with 8.6 metres at 0.45% Ni and 0.2% Cu from 241.4 metres, at the basal contact of a narrow ultramafic unit. A single follow-up drill hole intersected an unmineralised 26 metre thick pyrite body but the nickel sulphide intersection remains unresolved. No further follow-up drilling was undertaken and the mineralised ultramafic remains untested for several kilometres both north and south along strike from this intercept.

At the Point Perchance Prospect, an intersection in drill hole PP-1 of 0.3 metres at 0.46% Ni and 0.12% Cu from 58.3 metres occurs at the basal contact of an ultramafic unit with minor sulphides. This intersection has not been followed up and the strike extensions are entirely open for 1 kilometre to the north and 2 kilometres to the south.

Gold Mineralisation

In the Roe Hills area, gold has been discovered as an adjunct to nickel exploration as well as during dedicated gold exploration. During exploration for nickel at Talc Lake, significant gold values were intersected in hole ROE 100 with 2 metres at 2.7g/t gold from 44 metres, hole ROE 114 with 2 metres at 2.6g/t gold from 132 metres and hole ROE 147 with 2 metres at 11g/t gold from 138 metres, all of which justify follow-up work. Each of these drill holes is located at the limit of current drill coverage leaving the strike potential open. At the Terra Prospect, extensive gold exploration resulted in significant drill intercepts, including the following drill holes:

* KR-1 with 2 metres at 3.9g/t gold from 98 metres,
* KD-1 with 1 metre at 20.4g/t gold from 165 metres,
* KR-55 with 4 metres at 2.6g/t gold from 82 metres and
* KR-160 with 2 metres at 4.85g/t gold from 84 metres.

These holes were drilled on three exploration traverses covering 800 metres of strike length with no effective follow-up infill testing between or along the original lines.

OTHER WESTERN AUSTRALIAN PROJECT (Project tenure under application)

Mt Barrett Gold & Nickel Project (Oroya 100%) – Oroya’s licence application encloses Archaean greenstone terrain near the north-east margin of the Yilgarn Block which the company’s research shows is prospective for nickel and gold.

Mine For

gold, antimony, nickel

Location of operation(s)

Western Australia, New South Wales, Victoria

Address

Se 3, 72 Canning Hwy
VICTORIA PARK, WA, AUSTRALIA

Phone

(61 8) 9361 3887

Email

Website

http://www.oroya.com.au/

Last Updated

3/3/2011