US$50 million of Cash and Securities, pro forma as at end 29 March 2011
Share buy back active, annual report out beginning May
2011 Exploration Season
Ovoca is pleased to announce that mobilization has begun for the drilling season on the Rassoshinskaya exploration license. The Company plans to drill 5,000 metres on the Podgorniy target, and 2,000 metres on the Zet target. Olcha documentation is being prepared and will be submitted soon to the appropriate Russian authorities to receive an exploitation license, which are typically valid for 25 years. In addition to documentary work, Ovoca will perform geophysical work and some follow-up drilling (less than 1,000 metres) to explore potential mineralized zones to the northeast and east of zones 1 and 2 on Olcha. Previously announced on 7 December 2010, the Rassoshinskaya license has been extended by Rosnedra, the Russian State regulator, for two years to 15 February 2013. The Rassoshinskaya license is in the northeastern part of the Magadan Region, Russia and contains the Olcha, Podgorniy and Zet projects.
Ovoca is aggressively moving forward with its bulk sample program on Stakhanovsky which was announced with the maiden JORC resource of that project on 3 February 2011. The equipment for Ovoca's field installation to process 20,000 tons of material into a concentrate for analysis has been ordered; an engineering firm has been retained to design, coordinate equipment purchases and assemble the field installation on site; two heavy bulldozers have been moved to site already; on site is the rig for the 4,000 metre drill program to confirm the gold bearing quartz veins extend at depth. The Stakhanovsky gold project is located in the northwestern part of the Magadan Region, Russia.
Cash and Equity Investments
Currently, Ovoca has circa 1.2 million Polymetal common shares worth US$22.2 million as at close of business on 29 March 2011. Additionally, the Company has approximately US$7.6 million in cash and US$20.2 million in a diversified portfolio of gold mining equities. In total, the pro forma total cash and securities position of Ovoca as of 29 March 2011 is US$50 million.
The Buy Back program documentation is finalized, and management intends to execute the share buy back program for up to 10% of the Company's issued share capital by the end of the year. The AIM Rules and the ESM Rules prohibit the Company from purchasing its own ordinary shares during a close period which is defined as the period of two months preceding the publication of an AIM company's annual results or half-yearly report (or, if shorter, the period from the relevant financial period end to the time of publication), any other period when the AIM company is in possession of unpublished price sensitive information or any time it has become reasonably probable that such information will be required by the AIM Rules to be notified;
Ovoca intends to publish its 2011 annual report in the first week of May.
Tim McCutcheon, CEO, comments: "As always mobilization is an exciting time, and executing our plans for 2011 will allow us to significantly advance our Stakhanovsky and Rassoshinskaya projects. Ovoca's management is methodically executing the Company's development.
Our cash and equivalents position remains very strong, and we continue our strategy to give shareholders exposure to the gold price before we have our own gold production. Our per-share cash and investments value is approximately GBP 0.35, we are still trading at a discount to cash and investments. We would love to be acquiring our own shares at the moment but are prohibited to under the AIM and ESM Rules."
Notes to Editors
Ovoca Gold PLC ("Ovoca" or "the Company") is a mineral exploration and mine development company listed on the AIM market of the London Stock Exchange (Ticker: OVG) and on the ESM market of the Irish Stock Exchange (Ticker: OVX). The Company's principal activity is gold exploration in the Magadan Region of the Russian Federation. Previously Ovoca acquired, developed and sold to JSC Polymetal the Goltsovoye silver project located in the Magadan Region. Currently, Ovoca is aggressively exploring and developing its 100 per cent owned Stakhanovsky, Rassoshinskaya and Nevsko-Pestrinskoye licenses.
Stakhanovsky is located approximately 40 kilometres north of Susuman, the second largest city in the Magadan region. It is accessible by year-round road and there is power infrastructure on site. Stakhanovsky has an initial independently established JORC inferred resource of 350,000 ounces gold, with significant upside. The Company intends to put Stakhanovsky into production by 2013.
Rassoshinskaya is in the North Eastern part of the Magadan Region about 200 kilometres from the town of Simchan. There is no nearby infrastructure. Rassoshinskaya hosts an epithermal gold deposit named Olcha, which is the focus of Ovoca's exploration program. Olcha and nearby satellite deposits have the potential to host a high grade multi-million ounce gold resource. The maiden independently established JORC inferred resource for Olcha is 344,000 ounces gold.
Nevsko-Pestrinskoye is located in the central part of the Magadan region near the town of Omsukchan. A year-round road and powerline are near the site. The license completely surrounds the Goltsovoye silver deposit, which was owned by the Company from 2006 - 2009 and sold to JSC Polymetal for US$47.7 million at the time of closing. Ovoca intends to investigate and explore known mineral occurrences that extend beyond the Goltsovoye license area onto Nevsko-Pestrinskoye.
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