Orinoco showing “encouraging progress”, says leading Sydney analyst
14th July 2017
Resources Rising Stars
Orinoco Gold (ASX: OGX) enjoyed a strong week as investors marked the stock up by 30 per cent on the back of record monthly mine production from its Cascavel project in Brazil.
And according to prominent Sydney-based resource analyst Gavin Wendt, the company is demonstrating encouraging progress with remedial work aimed at recommencing gold operations at Cascavel, having achieved a number of “important recent milestones”.
Writing in his widely circulated Minelife newsletter, Wendt says Orinoco’s share price has recovered strongly, reflecting growing market confidence in the company’s ability to rectify the operational hiccups at Cascavel which negatively impacted production and revenues last year.
“The recent announcement of a maiden Mineral Resource estimate for Sertão was a major milestone and Orinoco is continuing to build on this momentum,” he said.
“Cascavel’s potential is underlined by AngloGold Ashanti’s involvement as a major shareholder and strategic project partner,” Wendt wrote.
He says important progress is being made towards production recommencement, along with measures to ensure that reliable production is maintained at Cascavel.
“At the same time, the company has made some important non-mine improvements,” he added. “It’s raised significant new company funding, introduced gold sector heavyweight, AngloGold Ashanti, as a major shareholder and project partner, boosted its project interest from 70% to 100% and implemented major board changes.
“Just as importantly in our view, Orinoco has maintained open and honest dialogue with the market, clearly communicating its problems and strategy of rectification.
“Orinoco Gold will remain firmly held within our Portfolio,” he added.
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