Orvana produces 5,890 oz Au at EVBC in June

2013-07-08 08:20 ET - News Release

Mr. Michael Winship reports

ORVANA ADVISES PRODUCTION GUIDANCE FOR FISCAL 2013 REMAINS ON TARGET

Orvana Minerals Corp. released today production results for the third quarter ended June 30 and is providing an update on its El Valle-Boinas/Carles gold-copper mine in northern Spain.

Production at EVBC for the month of June was 5,890 ounces of gold, over 687,000 pounds of copper and 21,793 ounces of silver. For the third quarter of fiscal-year 2013, production at EVBC was a record 18,500 ounces of gold, more than 1.9 million pounds of copper and 58,800 ounces of silver.

An alternative production schedule has been completed at EVBC in response to the hoist incident reported on June 17, 2013. The alternative schedule incorporates ramp haulage for Boinas skarns, greater oxides mining at the Boinas mine and an increase in overall production at the Carles mine. This revised production schedule will allow the company to maintain its fiscal-year 2013 production guidance of 75,000 ounces of gold from its EVBC mines in Spain and the UMZ mine in Bolivia.

Government authorities have released the hoist site at Boinas to the company in order to develop a detailed recovery plan, and insurance adjusters have visited the site. An internal investigation continues.

International shaft and hoist expert contractors and consultants have been to site as part of the internal investigation and to provide recommendations on the shaft recovery. Although the investigation is not complete, preliminary reports suggest it will take about four to six months to repair the shaft at an estimated cost of $2.5-million to $3.5-million. The company has notified its insurers and has been assisting them with their evaluations. Although such insurers have not confirmed coverage, at this time the company does not have any reasons to believe that it will not have coverage in respect of such repairs.

The company is pleased to have engaged Cementation Canada Inc. as its EPCM (engineering, procurement and construction management) contractor to lead the repair work.

"We are pleased with the revised production schedule from EVBC using ramp haulage and we fully expect to meet our overall fiscal 2013 production guidance," said Michael Winship, interim president and chief executive officer.

The company remains focused on increasing cash flow. In light of recent metal price volatility, an operating and capital cost review, and savings measures, are under way.