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Orinoco Gold on track to join ranks of Brazilian producers

Orinoco Gold (ASX:OGX) is set to join the ranks of international gold producers, with mine development at its Cascavel Gold Mine in Brazil progressing according to schedule.

Commissioning of the gravity plant is set to commence in late March. The cost of the processing plant remains on budget at around A$7 million.

Providing an overview of the potential at the project, there is free-gold visible in all development headings.

The headframe for the Incline Shaft has been erected, with rail lines to be installed in March.

The timing is right for Orinoco, with the price of gold climbing 17% so far in 2016, and currently sits atop US$1230 an ounce.

Additional construction details

Construction of the crushing circuit has already been completed, while the gold room construction is now 80% complete - and awaiting fit-out.

The plant commissioning is expected to commence in late March with customs clearance of final shipping containers expected imminently.

Analysis

Orinoco is on schedule to join the ranks of Brazilian gold producers, and the timing is right, considering gold is up 17% so far in 2016.

Orinoco's current mine plan encompasses the mining of the high-grade shoots through small-scale room-and-pillar mining while the lower grade shoots are currently scheduled to be left as pillars.

However, the lower grade areas will be further assessed for mining as both mine and plant costs are better understood once full production is underway.

Highlighting the potential are results such as: 3.66 metres at 142.62g/t gold; 4.56 metres at 49.65g/t gold; and 15 metres at 88g/t gold.

Shares in the company are trading two-and-a-half times higher than a year ago, last changing hands at $0.17.

The company held $3.7 million in cash at the end of 2015, with a placement recent adding another $1.1 million in gross proceeds.

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