Published: 08 October 2008
Oro Silver Announces First Closing Financing & Provides Corporate Update
Oro Silver Resources (“Oro Silver” or the “Company”) (TSX-V: OSR) has closed the first tranche of the non-brokered private placement comprised of 1,836,666 units at a price of $0.30 per unit, each unit consisting of one common share and one-half non-transferable share purchase warrant. Each warrant will entitle the investor to purchase one additional common share at a price of $0.45 for a period of two years from the date of closing, subject to acceleration in the event the Company’s share price is greater than $0.66 for ten or more consecutive trading days at any time after the date that is four months after the date of issuance of the warrants. The hold period for all securities issued under this private placement will expire on February 8, 2009. The Company paid $12,060 in finder’s fees. Oro Silver currently has a financial position of approximately $1.5 Million dollars in cash and account receivables; the majority of receivables include value-added taxes owed to the Company in Canada and Mexico.
Oro Silver management would also like to take this opportunity to inform its shareholders and investors of the Company’s plans.
In relation to the current market conditions, Oro Silver’s President Darren Bahrey commented: ““We recognize that today’s market conditions present challenges moving forward and view that there will be uncertainty for the next while. Therefore, we are implementing measures that will allow us to get through this unstable market. We have initiated an action plan that will involve showing the value of our assets while acting on significant cost reduction. ”
Oro Silver is optimizing and restructuring its operations in Canada and Mexico by making adjustments to its management and operations team to enable the Company to meet its next milestones: completing a preliminary economic assessment of the El Compas resource, monetizing certain Oro Silver assets, and focusing exploration and development at its Vetagrande mine property. Since inception of cost control initiatives in June 2008, Oro Silver has reduced its fixed costs by 30% through cost reductions at its Vancouver and field offices, voluntary salary reductions, and staff retrenchment by temporary “leasing” of Oro Silver’s personnel to other corporations. “It is imperative that we continue to be cautious in our spending and optimize our resources to show the value we have created for our shareholders, while minimizing share dilution,” stated Oro Silver’s CEO, Herve Thiboutot.
In regard to project advancements in Mexico, Mr. Thiboutot commented: “At Vetagrande, our flagship property, we recently completed over 4,000 metres of drilling aimed at testing the depth extension of the historically mined veins some 150 metres vertically below the old workings; an area that has never been tested in the past. We are awaiting assay results in order to execute our next phase of work at the property. This will include additional drilling, a preliminary resource potential calculation, and a preliminary economic assessment. At our El Compas project we have just disclosed a resource estimate. The indicated portion of the resource is estimated at 310,000 tonnes grading 6.52 g/t gold-equivalent for a total of 65,000 gold-equivalent ounces, while the inferred portion is estimated at 234,000 tonnes grading 5.48 g/t gold-equivalent for a total of 41,200 gold-equivalent ounces; both categories were calculated using a 3.0 g/t gold-equivalent cut-off (see press release dated September 18, 2008). This was also our first drill program and our first resource estimate at the project. As the mineralized zones are still open at depth and laterally, the potential for resource increase is excellent. Furthermore, the recent acquisition of 6 large concessions covering approximately 10 kilometres of the strike extension of the El Compas vein system (see press release dated August 28, 2008) will allow for continued significant increase in the property value and potential. We are presently completing a preliminary economic assessment that should show robust economics of this project.”
In terms of investor relations, Oro Silver believes that now is the time to heavily expose the Company to the investment community, in order to demonstrate the added value and upside of Oro Silver’s assets. Mr. Bahrey commented: “We believe the market indicators are re-enforcing the fact that silver, as a commodity, will remain an important investment option to the investor, which should benefit emerging silver companies like Oro Silver. We look forward to playing a role in providing a new source of silver to the industry by having success in discovering ounces and defining resources & reserves at our properties.” The Company recently presented at the Silver Summit in Coeur D’Alene, Idaho, and plans to speak again at upcoming engagements including the HBS Financial Investment conference in England on October 31st.
About Oro Silver
Oro Silver is a silver exploration company pursuing early and advanced stage silver-based opportunities primarily in the western hemisphere. The company is focusing on rapidly building a silver resource base at its Vetagrande and El Compas projects, and optimizing milling processes at its flagship Vetagrande property in Zacatecas, Mexico. Oro Silver's strategy is to develop properties towards production through strategic business arrangements and a development plan focused on advanced-stage projects with known silver resources that exhibit potential for expansion and significant increase in value.
ON BEHALF OF THE BOARD OF DIRECTORS,
CEO & Vice-President Exploration
Suite 1400-625 Howe Street, Vancouver BC V6C 2T6
Telephone: 604 646-1588 Facsimile: 604 642-2411
The TSX Venture Exchange does not accept responsibility for the adequacy or accuracy of this release.
Some statements in this release may contain forward-looking information. These statements include, but are not limited to, statements with respect to future exploration, resource estimation, development and production activities and future expenditures and statements containing the words “believe”, “plan”, “will” , “estimate” and other similar expressions which constitute “forward-looking information” within the applicable Canadian Securities laws. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include, among others, the time and success of future exploration, development and production activities and the timing and amount of expenditures.