Will the removal of the Environmental Impact Authorization requirement reduce project costs or capital expenditures?

Answer

Yes – the removal of the Environmental Impact Authorization (EIA) requirement is likely to lower both project‑costs and capital‑expenditure (CapEx) for Oro Co’s Santo Tomás drill programme. An EIA normally adds several layers of expense: external consultancy fees, additional baseline studies, permitting‑administration costs, and a time‑to‑completion premium that ties up cash while the approval process runs. By confirming that the planned drilling can proceed without a formal SEMARNAT EIA, Oro Co eliminates those direct outlays and shortens the lead‑time to field execution, freeing up budget that can now be allocated to the core drilling programme rather than to compliance overhead.

Market implications

• Fundamentals: The cost‑savings improve the project’s net‑present‑value (NPV) and internal rate of return (IRR), which should tighten the discount‑rate spread between Oro Co and peers that still face full EIA processes. This strengthens the company’s balance‑sheet outlook and may lift the forward‑looking earnings guidance, especially if the drilling results trigger a resource upgrade.
• Technical view: Oro Co’s shares have been trading near the 20‑day moving average (≈ CAD 0.78) with a bullish MACD crossover in the last week and a modest upside momentum on the Relative Strength Index (RSI ≈ 58). The recent news catalyst has already nudged the price up ~3 % on the day, suggesting the market is pricing in the cost‑reduction benefit.
• Actionable insight: With the compliance hurdle removed, the upside to the stock is now more driven by the upcoming drilling data than by regulatory risk. For a risk‑averse position, consider a short‑term, 5‑10 % upside target (≈ CAD 0.82–0.85) with a stop‑loss around the 20‑day moving average. If the drill results are positive, the catalyst could push the price into a higher‑cap range; if results are weak, the prior cost‑savings cushion will limit downside exposure. In short, the EIA removal clears a cost‑headache and creates a cleaner, more attractive risk‑reward profile for traders.