D. Stewart Armstrong
(OLEPF.OTCBB and OLE.CA)
www.oromin.com
In our era, there are two basic yardsticks of International value: Oil and Gold.
Oromin Explorations is Pursuing both of them.
Here’s the premise: The US economy is not improving as touted and we are fast depleting our national resource of smaller denominations of physical gold and silver.
j@silverstockreport-com.ccsend.com
www.caminocoin.com
When those one ounce gold and silver coins and bars are finally depleted just as the pubic realizes that the “jig is up” with regards to “paper promises”, there will be a rush towards quality junior mining companies—again! It is my opinion that Oromin Explorations (OLEPF.OTCBB and OLE.CA) will be among those companies on investors “wish lists”. The reasons are succinctly listed below.
There are six major reasons:
1. OLEPF has spent $US 55M as of 12.31.08; over $US 60M as of 3.30.09
2. They have over 2.4 million ounces of gold in the ground
3. They are working on a pre-feasibility study which will be completed soon
4. They have seasoned management that has been through downturns before
5. Said management has proven up other gold deposits such as Eskay Creek
6. Six major deposits delineated with the possibility of more coming
I want you to understand that Oromin operates in its own particular sphere of influence. That means that it is a somewhat self contained macrocosm due to the nature of the project which is situated in Senegal, Africa. Senegal is a stable environment in which to do business—a very important point.
Therefore, Oromin marches to his own drummer.
The project in Sabodala speaks for itself and its progress is reinforced by these attached press releases. Currently, it has funding and the company has always conducted itself with integrity. When the junior gold markets got “hit” eight months ago, Oromin was the only company that honored its financial commitments to me which I personally found a reflection of the sound character of the company. So frequently, the devil is in the details and of course the numbers have to crunch but it always comes down to management and the way they conduct themselves.
The question becomes why doesn’t Oromin “promote” more? Or why has the share price come off? Or, what is it going to take for it to get moving again? The answers are the company doesn’t rely upon promotion—they are a “drill it and they will come” kind of outfit. Yes, most companies have “come off” in terms of their share price but if Oromin continues to discover new deposits, they will attract additional attention. You can be certain that the “big boys” are watching.
I personally would like to see them become a small “grass roots” producer but that may never happen. The point is that they have the resources to do so—my opinion only! Even if they were to produce 50-100 ounces per month, it would make a statement—and that statement would be in terms of a higher share price and ultimate project sale price if traditional models are employed—my opinion only!
Different CEO’s have different ways of doing things because we’re not all the same—obviously. The company will do some promotion in the future when they feel it is time but for now they are waiting for the fog to clear. This gives us an excellent opportunity to join one of the best run, most promising junior mining companies in the sector.
Two Excellent Projects with the focus on Sabodala
Oromin Explorations LTD (OLE-V) is a junior mining company under the “Mine-Tech” umbrella that currently has two excellent projects in its portfolio:
(1.) The Sabodala Project in Senegal, West Africa
Remember these names! Masato, Golouma West; Golouma South, Kerekounda, Maki Medini, Niakafiri These are six major deposits at the Sabodala Project and think of them as satellites around a central point.
Please remember that their immediate neighbor, MDL, is already producing gold in a concession a fraction of the size of Oromins. More…
(2.) The Santa Rosa Dome Prospect in Mendoza Province, Argentina is an oil and gas prospect.
The Sabodala gold project is the project that has received the attention, funding, and energy; all with good reason. It is an enormous tenement (lease) located in Senegal, Eastern Africa. There is the possibility that some day the Santa Rosa (oil and gas) Dome in Argentina will be explored but for now, we will focus on Sabodala.
The exploration has been intense with four to six drill rigs operating almost constantly for several years. The progress has been studied, plotted, steady, and in many ways the results have been simply excellent. It is an underperforming “stock” story at the moment because people just don’t understand it—they don’t even know about it!
It is not my job to contest managements promotional tactics. At this point I simply want to bring it to your attention to the project and let you make up your own minds based upon the accomplishments completed at Sabodala to date.
Here are the nuts and bolts of the latest Press Release:
First 2009 drill results continue to expand Sabodala gold deposits
Wide-spread high-grade assays reported at Kerekounda deposit
Highlights
_ Five drills continue working at several OJVG gold deposits
_ SRK’s pre-feasibility study continues on schedule towards Q3
Completion
_ Successful deep drilling results returned from Golouma South,
Golouma West and Kerekounda deposits
_ Oxide potential expands at Masato and Maki Medina deposits
_ Latest drilling results include:
o 13 metres of 10.2 g/t gold in DH-426 at Kerekounda
o 10 metres of 8.52 g/t gold in DH-414 at Kerekounda
o 14 metres of 11.23 g/t gold in RC-521 at Kerekounda
o 12 metres of 15.33 g/t gold in RC-535 at Kerekounda
o 9 metres of 12.79 g/t gold in RC-555 at Golouma South
o 10 metres of 8.59 g/t gold in DH-429 at Golouma West
o 5 metres of 46.90 g/t gold in DH-430 at Golouma West
o 9 metres of 13.39 g/t gold in DH-434 at Golouma West
o 15 metres of 2.17 g/t gold in RC-505 at Masato
o 13 metres of 1.53 g/t gold and 16 metres of 1.76 g/t gold at Masato
o 22 metres of 1.44 g/t gold at Maki Medina
Try and remember that anything above 5g/t gold is considered by many to be quite positive. 10 meters is 30 feet give or take and at 8.52 g/t is quite good.
Grades
This project seems to have it all! But for quick practical purposes, allow me to point out a few important factors pertaining to grades. If the project is mined according to heap-leach methods, a 1 gram/ton (g/t) would suffice. If we go to an open pit method, the grade would be 2-21/2 or better. If we were to go to underground and high grade, we would be looking at 5-6 g/t or better. This project has several different ways to go so flexibility is always an attribute.
Below,I am going to try and give you the brief version of what I consider to be extraordinary news. It is a recapitulation of some of the highlights over the past four years. Please visit their website at www.oromin.com for the full picture and an understanding of what four years of hard work has accomplished.
Oromin Expanded
When I think of Oromin, I think of several things. I think of four years of hard work, about five or six drills working 24/7, about extraordinary drilling results, about good management, and about a company that’s going to end up with many millions of ounces of gold on its books. I also think that this is a company that has come a very long way in a very short period of time. At one point in the past, the price of OLE (CA) was well over $3.50 a share US and it is currently somewhere in the vicinity of $.60 US. The only difference between those two price points is the amount of work that has gone into the project during that span of time. As the price now hovers around $.55 US, we probably have five to 10 times more work completed, and positive results reported than when it was at $3.50 US. In other words, it’s all upside down. But what else would you expect? This is a world that’s upside down and the winners are going to be those who understand it and are able to stay the course and be rewarded for their knowledge and patience.
Oromin requires Patience
I want you to realize that I no longer officially work for the company but I have a great interest in how they will proceed. I also hold a position.
Oromin requires patience and patience is probably the one thing that most investors have in short supply. Investors in the junior mining companies have been put through a meat grinder and I would include the junior gold and silver producers in that category.
I’ve always believed that Oromin has been a special company because of the Sabodala project; I still do. They have a junior mining neighbor called Mineral Deposits Limited or MDL which has just started “pouring” gold at their adjoining, albeit infinitely smaller property. This is very big news and could offer OLEPF a boost by means of a comparison.
The Basics: Think about the enormity of these numbers
Current Development
In early 2008, Oromin initiated a 140,000 -meter resource drilling program focused mainly on the Golouma West, Golouma South and Masato gold deposits. This ongoing step-out and infill drilling is expected to expand and upgrade the NI 43-101 compliant inferred resource being prepared by SRK Consulting, based on more than 75,000 meters of previous drilling.
SRK is also engaged to complete environmental baseline studies, metallurgical test-work, additional resource updates, and initiate a preliminary feasibility study for one or more gold deposits during 2008. Oromin will also continue to dedicate funds for ongoing social programs focused on improving health, education and infrastructure for local communities in the region.
Exploration Expenditures
2008 Phase III budget - US$26,000,000
2007 Phase II expenditures - US$14,000,000
2006 Phase I expenditures - US$10,000,000
2005 Preliminary expenditures - US$1,000,000
Size
The 230-square-kilometer OJVG Sabodala Gold Project surrounds a 20.3-square-kilometer Exploitation Concession where Mineral Deposits Limited (MDL) of Australia is slated to produce 200,000 ounces of gold annually, starting in late 2008.
A Second Chance
If you believe in gold, in the future of gold to help a savaged world get back on its feet, then by all means you owe it to yourself to perform your own due diligence on Oromin Explorations.
We all have a second chance with this one because when I first recommended OLEPF back in 2006-2006, it was around $.40 US. It appreciated considerably; up to the $4.00 range and has retraced back to the $.60 US range during the contraction. Investors have indeed thrown out the baby with the bathwater. The only thing that has changed is the perception of the stock markets especially the junior gold markets, and the fact that OLEPF has done an extraordinary amount of exploration on this concession, advancing it way beyond where it was several years ago.
So here is the equation. Huge Lease + $US 50 M in Exploration Fees+ four years + Successful Discoveries = Lower Share price. Yes, I know that doesn’t make much sense, but such is the world we live in and it takes us back to our fundamental premise. Do you believe in gold? Now granted the shares have doubled in number over that period of time (from approximately 30M to 60M ) but the other parts of the equation have appreciated to the power of 10!
Inferred gold resources now total 2.26 million ounces in four deposits.
The Latest Press Release
January 12, 2009
Three newly discovered gold deposits Kerekounda, Niakafiri, Maki Medina complement three previous Oromin Gold deposit discoveries: Masato, Golouma West, and Golouma South. (That is a total of six major deposits—many of them being open in different directions!)
The Resource updates for all the drilling completed by the end of 2008 will be calculated and released by January 2009, including 375 drill holes completed since initial resource calculations.
The prefeasibility study began in January of 2009
This is the latest Press Release as of March 3, 2009.
(TSX.OLE)(OTCBB.OLEPF)
Oromin estimates 2.26 mm oz Au inferred at Sabadola
2009-03-02 10:26 ET - News Release; Mr. Chet Idziszek reports:
OLEPF Resource Update At Sabodala Adds 860,000 Inferred Gold Ounces
VANCOUVER, BRITISH COLUMBIA–(Marketwire - March 2, 2009) - Oromin Explorations Ltd.
Highlights
· Sabodala inferred gold resources now total 2.26 million ounces in four deposits representing a 61% increase from previous estimate
· initial estimate at the Kerekounda deposit confirms high-grade opportunity
· Masato deposit now exceeds 1.3 million ounces including 0.29 million ounces of oxide resources
Oromin Explorations Ltd. (”Oromin”), on behalf of the Oromin Joint Venture Group (”OJVG”), is pleased to provide a resource update for the various gold deposits at their Sabodala Property in eastern Senegal. The resource update has been completed for the Masato, Golouma West, Golouma South and Kerekounda deposits and is in progress for the Niakafiri and Maki Medina deposits. The resource estimate update has outlined an inferred mineral resource containing 2.26 million ounces of gold. This represents a 61% increase over the initial resource estimate completed in July of 2008 which outlined an inferred mineral resource of 1.40 million ounces of gold at the Golouma West, Golouma South and Masato Deposits (see July 24, 2008 Press Release).
Conclusion
Investors, especially gold and silver investors are weary and wary—even though gold is now close to $890/ounce and Silver at $12.75, you’d think that the game was over. I think that is a testament to how carefully the Powers That Be are Protecting their Financial systems.
Remember that nothing occurs in a vacuum and the printing of $5-50 trillion (take your pick) US dollars is going to leave repercussions.
Jim Rogers of Commodities fame says “marry a farmer!” He also says to buy oil and commodities and gold and silver are all part of that complex. “Try and protect yourself as best you can.”
Oromin Explorations is a company that is going to survive and prosper in this environment.
Common sense tells me gold and silver are going to do well in a financial environment where all sanity has gone by the wayside—where the paper numbers truly boggle the mine.
Until Next Time,
D. Stewart Armstrong
Seacoast Consulting
www.seacoast-consulting.com
PS
In the interim, we’re all feeling a bit beat up, frightened, and confused. Whatever we do, we cannot allow our incredulous leaders to sanction more war. That would be the one true nightmare that could emerge from this disintegrating financial turmoil.
Posted by D.Stewart Armstrong in Articles