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Time not standing still for Oroya

Timing can be everything. Oroya Mining has made it work in its favour with some industry nous, but has also had to do some quick manoeuvring when its timing has spelt potential disaster.

Directors of the former Gold Partners Limited looked at Oroya’s main asset, Mount Gibson gold project 280 kilometres northeast of Perth, in May 2000, when there was no interest in the gold sector.

They knew of the project’s late-1980s production history, had known of the potential of the territory some years previous when wearing different hats, and figuring on sector cycles producing a gold recovery, by the end of that year were ready to commence an extensive geological review.

An IPO prospectus was prepared and early on September 11 2001, a Perth stockbroker agreed to sponsor the issue. When the broker pulled its support late that evening, the company became destined for a back-door listing through Gold Partners.

By October 19, a heads of agreement was in place, and when an acquisition prospectus was lodged on December 7, gold hit $305.

The price kept falling throughout the offer period, but Oroya raised $4.7 million and in early April this year Mount Gibson was formally acquired.

Results have been coming in since late May from extensive drilling which commenced just 10 days after the acquisition.

Oroya managing director Steve Shedden has described these as "interesting" results, "consistent with expectations".

The company is aiming for 100,000-ounce production, commencing mid next year, but before then needs to prove up sufficient reserves and resources to make the big-money decisions by the end of the year.

Following the resource evaluation phase, expected to be completed in September, Oroya will look at mine modelling.

If all goes to plan, mine planning and permits will take up the first quarter next year, followed by a mill refurbishment - all up expected to cost Oroya $6 million.

But hoping to have three years of mill feed ahead of production, Oroya is banking on a much greater return.

"We’ve got the cycle right," Mr Shedden said. "All we have to do now is prove the point."

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