Cerro Prieto Project

Highlights

• 100% OWNERSHIP INTEREST IN FORMER PRODUCING CERRO PRIETO MINE WITH
SIGNIFICANT HISTORICAL RESOURCE AND CONSIDERABLE BLUE SKY;
• SUCCESSFUL PHASE ONE EXPLORATION PROGRAM COMPLETED OCTOBER, 2008
OUTLINED EXTENSIVE GOLD, SILVER, LEAD AND ZINC MINERALIZED ZONE: INITIAL RESOURCE CALCULATION UNDERWAY
• CLEAR POTENTIAL FOR LOW COST, OPEN PIT AMENABLE RESOURCE;
• MINERALIZED ZONE OPEN ALONG STRIKE IN BOTH DIRECTIONS AND AT DEPTH;
• FAVOURABLE LOCATION AND MINING LAWS.

Summary

Concessions: San Francisco (15 hectares), San Felix (200 hectares), and Cerro Prieto North (2,508 hectares) 

Ownership: Oroco owns a 100% interest in each of the three properties.  The San Francisco and San Felix properties are subject to a 2% NSR.

Location: Sonora State, Mexico, 135 kilometers north of state capital Hermosillo.  The concessions cover land that is a privately owned cattle range land with no communities or residents.  Access to the property is secured by agreement with the landowner. The nearest community of Cucurpe is 12 kilometres south.  The regional center of Magdalena de Kino (population 40,000) is 27 kilometres northwest and is a one hour drive on mostly paved road.  

Infrastructure: National Grid power lines and a paved road leading to the State’s major highway are each less than five kilometres from the property.  Ground water is available on site and a river flows year round four kilometers south of the property.  There are numerous nearby road and rail links to ports in the state of Sonora.

Historical Resource*: A polymetalic resource (Au-Ag-Pb-Zn) of 7.06 million tons grading 4.4 g/t Au Eqv. and 1.39 million tons grading 2.47 g/t Au Eqv., for a total historical resource of 1.14 million ounces gold equivalent. 

Introduction

The San Francisco and San Felix concessions were optioned in November of 2006 and the acquisition completed in March of 2008 with the payment of the full purchase price.  Exploration commenced in April 2008 immediately following Oroco’s initial public offering.  The objective of the Phase I exploration program was to confirm the historical resource reported in 1999 (which was based on a 23 hole reverse circulation drill program and an underground and surface sampling program, and to test for the potential to expand that resource.  The historic, non-NI43-101 compliant resource was considered important as a guide to the potential of the property but the objective of the Phase I exploration program was to both confirm the historical resource and test the potential for the presence of a larger, bulk mineable zone of economic mineralization along strike, and at depth, where mineralization remained open and where the previous operator had not drilled nor reported a sampling program.

That Phase I program was completed in October of 2008 with excellent results.  The program consisted of a total of 5,975.1 meters of diamond drilling in twenty-four holes, trenching and sampling across the mineralized shear zone at 50 meter intervals, and mapping on surface.  Twenty-two of the holes drilled intersected the mineralized zone with a true thickness ranging from ten meters to greater than fifty meters, with an average true thickness of approximately forty meters, while two drill holes were abandoned due to poor ground conditions before hitting the structure.  Drilling has now been completed at 100 meter spacing along 600 meters of strike length to a maximum depth of 400 meters, allowing for an initial inferred resource to be calculated.  This calculation is anticipated to be reported during the first quarter of 2009.  In addition, a single drill hole drilled 300 meters along strike of intensive drilling intersected a strongly mineralized zone.  Drilling, trenching, and mapping have now traced the mineralized structure for 1100 meters on surface to a maximum depth of 400 meters. 

In addition to the resource calculation currently underway, the company has initiated a preliminary metallurgical test.  As part of the study, several samples have been collected for petrographic analysis to characterize th e mineralogy of the deposit.

A Phase II exploration program is planned for 2009 and will include infill diamond drilling as well as drilling at 100 meter intervals along strike to the north and south, as well as a detailed metallurgical study, an environmental study, underground cleaning, mapping, and sampling. Following this program the Company intends to undertake a prefeasibility study on the project.

The Cerro Prieto North concession was acquired through direct application and lottery with the Department of Mines in July 2007. Oroco targeted this area as it was considered prospective for additional strike length of the regional structure hosting the Cerro Prieto Mine. This was confirmed through a limited exploration and sampling program in 2008 which returned channel sample assays as high as 2.8 g/t Au, 200 g/t Ag, 2.26 % Pb, and 3.17% Zn, from samples taken on a 300 meter outcrop of the structure on surface.

Cerro Prieto Project: Mineralization

Polymetallic mineralization (consisting of gold, silver, lead, and zinc with strong indications of copper and molybdenum mineralization in the deepest holes) at the historical Cerro Prieto Mine is contained within a major regional shear zone traceable for a total strike length in excess of 10 kilometers, with approximately 6.5 km of strike length contained on Oroco’s concessions. This shear zone cuts all geological units from Jurassic to Lower Tertiary in age.  Within this shear zone are contained hanging wall and footwall veins, secondary veins, breccia zones and stringer zones, which, where tested, produce continuous mineralized zone from approximately 10 m to in excess of 50 m thick.

At the mine site the geological structure strikes north 350° and dips from vertical to 80° to the east. Mineralization outcrops on surface across the entire length of the San Francisco and San Felix concessions, a distance of approximately 1.7 kilometers, and extends to below the lowest levels yet drill tested, over 400 meters below. It remains open at depth, to the north and to the south.

The Project is interpreted to be a strong epithermal mineralizing system, no older than Tertiary in age, signifying considerable additional depth potential below the deepest drill intercept.

Oxide mineralization has been intersected from surface to a depth of 400 meters with significant sulphide mineralization only intersected in hole CP011, the deepest drilled to date.

History

The Cerro Prieto Mine operated from 1906 with production reportedly between 500 and 720 tpd of gold and silver ore grading 3 to 15 g/ton Au and 50 to 60 g/ton Ag. Mining operations ceased in 1912 at the time of the Mexican Revolution and were never resumed. A number of factors, including the 1966 mining law requiring 51% Mexican ownership, prevented further mining in the 20th century. Companies conducting exploration programs from 1969 to 1999 issued consistent reports of mineralization at Cerro Prieto. In 1998 Morgain Minerals Inc. conducted a reverse circulation drill program of 23 holes and based on this drill program Morgain management estimated that within the area of drilling and detailed work there is a bulk underground resource* of 7,061,129 tons at an average gold equivalent grade of 4.40 g/ton and an open pit resource* of 1,391,000 with an average gold equivalent grade of 2.47 g/ton

* any resource estimates referred to are historical and as such, in accordance with NI 43-101, section 2.4 should be used only as an indicator of the potential of the property.

Notice to Readers: This website and the information included herein are owned by Oroco Resource Corp. and its subsidiaries and may be changed or updated from time to time without notice. By accessing the website and the information provided, you agree to hold Oroco Resource Corp. and its subsidiaries, and their respective officers, employees and agents harmless against any claims for damages or cost or any loss of any kind arising out of the access to or use of this website or any information contained in or obtained through this website.