The Company is actively looking to purchase mining operations and has a development plan based on initially commencing operation of the current CIP lixiviation plant, processing 40 tonnes per day (tpd). This will enable the company to quickly push the plant into early production, and generate early and significant cash flow. Once the initial capital raising is complete, the process of upgrading the existing plant to 40 tpd will commence.
New infrastructure to be built in phase one, includes upgrade to the existing laboratory, supply and installation of an 80 foot, 40 tonne weighbridge and installation of a new and substantial tailings facility. New dormitories, kitchen and mess facilities, and a maintenance workshop will also be added. The opportunity for the Gold Plant to start operations at a production rate of 40 tonnes per day will add great value to Oar, and enable cash-flow to commence almost immediately.
The main 120 tpd upgrade for Chimu will start concurrently with the 40 tpd work in August 2019 and once further capital is raised. This upgrade will be planned over the coming months and will be initiated upon starting the upgrade of the existing facilities. The main plant upgrade will take 12 months and will also include further infrastructure facilities in general maintenance, another dormitory, and greater water pumping and storage tanks.
Ore purchasing activities will commence 2 months prior to the re-commissioning of the plant. The Company has a development plan based on initially commencing operation of the current CIP lixiviation plant, processing 40 tpd.
It is very difficult to estimate entry costs and development costs for mining properties until a technical evaluation has been undertaken, however potential properties can be prioritised based on ease of mine development and proximity. Between these two development parameters, the latter is given the highest priority given that there is an opportunity to increase profits significantly by acquiring a mine (or equity and participation in a mine), and becoming self-sufficient in ore supply.
As before, a mining operation produces gold bearing ore at a significantly cheaper unit cost than purchasing ore on the open market. The processing of such ores at our Chimu plant would generate greater profits than processing ore purchased on the open market.
With its own mine, the company could more easily finance the construction and permitting of a new plant elsewhere in Peru, while it continued to operate and profit from the existing Chimu plant. The purchase and construction of additional processing facilities elsewhere in Peru, forms a fundamental part of the long term strategies that the Company has within the Peruvian economy.
With its own plant and operating mine, the growth potential of the Company is only limited by resource definition (in its own mine, or in other potentially obtainable mines) and its capacity to expand a profitable processing facility to a scale concurrent with any number of potential ore sources under control of the company.