After about a year and a half of slim pickings at an operating mine in Bolivia, Orvana Minerals (TSX: ORV) has started to ramp up production at its El Valle-Boinás/Carlés mine in Spain. Orvana announced that as of May 31, 2011 commissioning of the mill was underway.
It is a significant step for Orvana in two ways: as part of the company's quest to become a multi-mine, mid-tier gold mining company, and more practically, as a sign Orvana production is on the rebound.
Since the end of 2009, production has been slow for Orvana. Ore from the Lower Mineralized Zone at its Don Mario Mine in Bolivia dried up, leaving Las Tojas, a smaller satellite deposit, as its sole source of production. Meanwhile it had started to develop a second zone at Don Mario, the Upper Mineralized Zone (UMZ), to bring online in 2011.
With only Las Tojas to rely on, however, Orvana production fell from 63,230 ounces gold in 2009 to 28,341 ounces gold in 2010. And small as it was, the deposit gave out in the second quarter of this year.
It was a well-timed ending for Las Tojas as this quarter Orvana started commissioning two mines that should more than pick up the production slack. In addition to El Valle, which Orvana expects to operate at 70 percent capacity until early 2012, Orvana announced in April it had commissioned the UMZ at Don Mario, which will eventually bring in about 20,000 ounces gold a year.
This year Orvana expects production, including the last ounces from Las Tojas, to hit about 60,000 ounces gold, plus byproducts. Next year Orvana forecasts production at over 100,000 ounces gold, 7.8 million pounds copper and 150,000 ounces silver, once El Valle and Don Mario are fully up and running.
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