O2Gold Inc (TSXV: OTGO) is looking to begin drilling. The firm this morning announced that they have contracted out what is to amount to its first phase of drilling at the Aurora brownfield property.
The program will see Serviminas, the drill contractor, drill an aggregate figure of 10,000 metres at the Aurora property, with pricing said to amount to US$117 per metre. Drilling is slated to begin this month with an initial 2,000 metres to be drilled, with an option for the remaining 8,000 metres at the same pricing.
O2Gold also indicated that cores are to be analyzed in Colombia, where wait times are currently sitting at roughly 14 days. The short turnaround time is notable, given that lead times for assay results in North America are currently between 60 and 90 days.
The company this morning also announced that it expects to sign today documentation to transform a current title held in the region, Title 4638, into a concessionary title that extends certain permissions on the property by a period of 30 years. The title contains the Aurora Tunnel, which have previously seen gold production historically.
Notably, with the advent of the title turning concessionary, the company is required to meet certain obligations. Among them, is the the recovery of 2,229 gold ounces within one year from the title, a figure which increases every year for the first six years. The title also has all environmental studies completed, and is permitted to construct a plant.
In essence – the gold junior is headed towards production of gold over the course of the next several months.
Production is slated to proceed on site, despite a feasibility study not having been conducted – something the company cautions is much higher risk than traditional methods. This risk is being abated in the form of drilling, with the drill campaign that commences this month focused on this title in particular.
O2Gold last traded at $0.26 on the TSX Venture.
Information for this briefing was found via Sedar and O2Gold Inc. The author is currently long the equity. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
