Oroco’s Technical Report – Welcome to the New Chapter

by | Sep 10, 2019 | General | 0 comments

Last night Oroco issued a press release stating that the Santo Tomas’ Technical Report has been released to the public. This definitely constitutes a new chapter for Oroco. Up to this point, not many investors (especially funds) were able to invest in Oroco because of the outdated information about Santo Tomas and lack of information about the high grade portion of the deposit.

When people looked at the historical technical reports, they saw a huge deposit grading at 0.356%. This meant $150 million of yearly profits at today’s copper prices. This is not that exciting considering it will cost $1.5 billion to put the project into production.

However, with the new technical report, the whole thing changes. The high grade zone contains 333 million tonnes of copper grading at 0.437%. This translates into $300 million of yearly profits for about 10 years. When we add, the credits from gold, silver, and moly, this number jumps to $340 million. This is exciting.

Now, all the funds and major mining companies will look at Santo Tomas and realize that this deposit is much better than they originally thought. But this is not everything yet. Right now copper is at a two-year low because Trump is fighting the trade war with China. Copper is extremely worried about this. When this trade war ends, copper is likely to shoot up back to $3 per pound. Then, the yearly profits will jump to $470 million from $340 million. I will take $340 million, but I will definitely be even happier with $470 million.

Like I said before, Oroco has another 10-bagger or even 20-bagger left before the investment thesis is finished. The technical report is a huge milestone towards that goal.  

Disclosure: Long Oroco

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About Mariusz Skonieczny

Mariusz Skonieczny is the founder of Classic Value Investors.