Contrarian view on Orko, fwiw..
Taken from another board...
I am very suspicious of that resource estimate. I have had my issues with OK management in the past. I think they are overly aggressive on their assumptions, but so far they have been able to get away with it. for example:
"Silver-equivalent is calculated as silver plus 60 times gold, with metallurgical recoveries and net smelter returns assumed to be 100%." - ENDQUOTE
I would consider the above to be overly aggressive and I cannot think of another reputable company that would plug in those assumptions. Most juniors will go with a 50-times multiple for silver, and a lower metallurgical efficiency rate. I would think 80% is far more reasonable for real world mining.
"...the Company feels given the location of the project and current market conditions that the 100 g/t cut-off grade is more relevant" - ENDQUOTE
Again, I must ask, what planet do these guys live on? The geometry of that deposit as defined so far would suggest that the only economic method to attempt to mine it would be via an underground operation. A cut-off grade is an estimate at which point all ore of that, or higher grade, could be mined at a profit. I cannot name a single producing junior that is making money running ore of 100 g/t silver EQ. I can name several that are losing money running far higher grade feedstock. I think it is irresponsible of management to try and sell a resource estimate using such a low grade cutoff.
I would also caution that the average spacing of the drill cores is about 100m, which is a wide drill fence on which to base even an inferred resource.
None of the above is illegal, and I do not wish to suggest that OK management have done anything unethical. My point is that they are going well beyond what other juniors in the peer group are willing to assume for a documented resource. They have crossed the line IMO. When so many other high quality companies have chosen to be far more realistic in their approach, I question the validity of the numbers for OK.
I have had my disagreements with this company in the past. I do not own the stock, and have no short position. I am sure that the happy momo crowd love this one, and people will be thrilled as they continue to report successful exploration work. Maybe the overly aggressive assumptions they have made will come back to haunt them, or maybe not.
