The Don Mario deposit was probably worked by the Jesuits during the 18th century. Prior to Orvana’s acquisition of the Don Mario project in 1995, the property was explored by four companies following the discovery of gold at the site in 1991. Through its wholly-owned subsidiary, EMIPA, Orvana currently mines the upper mineralized zone (“UMZ”) in south-eastern Bolivia. The Don Mario District consists of 11 contiguous mineral concessions covering approximately 70,100 hectares. Historic exploration work included a combined 33,000 metres of drilling, 148 metres of drifting and a small open pit. This work resulted in the discovery and delineation of the lower mineralized zone deposit (the “LMZ”) and UMZ, the two principal zones of mineralization, and several prospects along strike and elsewhere in the Don Mario district, including the Las Tojas gold deposit. Production at Don Mario commenced in mid-2003 after the development of the LMZ at Don Mario. The LMZ was depleted in 2009 at which time mining moved to Las Tojas which is located 14 kilometres from the Don Mario Mine infrastructure. Las Tojas was depleted in the second quarter of fiscal 2011 and was succeeded by mining at the UMZ.
The UMZ mine commenced commercial production in January 2012.
The Company is open-pit mining the UMZ Mine copper-gold-silver deposit that lies above the LMZ. The Company was treating oxide ores using a leach-precipitation-flotation (“LPF”) process, but during the third quarter of fiscal 2013 determined, as a result of, among other things, declining metals prices and rising prices of necessary consumables for the LPF process, that it was no longer economical to process oxides through the LPF process. LPF processing costs were significantly higher than flotation only processing costs and throughput of the LPF circuit was approximately half that of the flotation only circuit. As a result, the Company suspended the LPF process. The Company continues to process transition and sulphide ores by the flotation only circuits. The Company continues to evaluate reagents which may allow it to process oxide ores through its flotation only process. Certain equipment previously used in the exploitation of the LMZ and Las Tojas deposits is used to process as much as 3,000 tonnes per day at the UMZ Mine through a closed-circuit SAG and ball mills.