Orvana Reports Results for the Second Quarter Ended March 31, 2012

TORONTO, ONTARIO--(Marketwire - May 15, 2012) - Orvana Minerals Corp. (TSX:ORV) announced operating results today for the second quarter ended March 31, 2012. Dollar amounts (other than per ounce and per share amounts) are in thousands of U.S. dollars unless stated otherwise, and fine troy ounces of gold and silver are referred to as "ounces".

Highlights:

• Cash costs for El Valle-Boinás/Carle╠üs ("EVBC") Mine in Spain were $745.00 per ounce of gold net of by-product revenues for the second quarter of fiscal 2012;
  
  
• Commercial production commenced at the Upper Mineralized Zone ("UMZ") of the Don Mario Mine on January 1, 2012. Cash operating costs were $1.66 per pound of copper net of by-product revenues for the second quarter of fiscal 2012;
  
  
• Total production was 3,024,000 pounds of copper, 12,754 ounces of gold and 115,282 ounces of silver for the second quarter of fiscal 2012;
  
  
• Revenue for the three months ended March 31, 2012 was $31,245;
  
  
• Gross margin for the quarter ended March 31, 2012 was $9,029;
  
  
• Net loss for the quarter ended March 31, 2012 was $7,959, resulting primarily from the loss on the mark-to-market revaluation and settlement of derivative contracts;
  
  
• Net income before the derivative mark-to-market adjustment, net of tax, was $4,128⁽¹⁾ for the three months ended March 31, 2012;
  
  
• Cash and cash equivalents, were $7,431 at March 31, 2012 compared to $12,244 at September 30, 2011;
  
  
• Mine permit for the Copperwood copper project, was received from the Michigan Department of Environmental Quality on April 30, 2012.
  

"We have made substantial progress at both operations and the Copperwood permitting process advances well," said Bill Williams, President and Chief Executive Officer. "We are confident that our performance will improve during the third quarter as the gold head grades improve and the shaft is completed at EVBC, and the throughput and concentrate production increase at UMZ."

Operations:

1. EVBC Mine, Spain

Production for the first and second quarters of the 2012 fiscal year and the six months ended March 31, 2012 is summarized in the table below:

	First quarter of	Second quarter of	Year-to-date
	fiscal 2012	fiscal 2012	fiscal 2012
Tonnes milled dmt	123,566	126,978	250,544
Head grade
Au, g/t	2.17	2.83	2.50
Cu, %	0.34	0.40	0.37
Ag, g/t	7.23	10.27	8.77
Concentrate
Tonnes dmt	1,686	1,646	3,332
Au, g/t	83.0	122.1	102.7
Cu, %	19.6	26.4	23.0
Ag, g/t	330	536	433
Cu Recovery, %	80.0	85.1	82.3
Au Recovery, %	54.7	55.9	54.4
Ag Recovery, %	63.2	67.6	65.4
Au, ounces	4,499	6,461	10,960
Cu, tonnes	330	434	764
Ag, ounces	17,880	28,343	46,223
Bullion
Au Recovery, %	37.5	37.3	37.0
Ag Recovery, %	6.6	11.2	9.3
Au, ounces	3,058	4,300	7,358
Ag, ounces	1,742	4,705	6,447
Total Production
Au Recovery, %	92.2	93.2	82.3
Cu Recovery, %	80.0	85.1	91.4
Ag Recovery, %	69.9	78.8	74.7
Au, ounces	7,655	10,761	18,416
Cu, 1000lbs	727	956	1,683
Ag, ounces	19,725	33,049	52,774

During the second quarter of fiscal 2012, production was 10,761 ounces of gold, 956,000 pounds of copper, and 33,049 ounces of silver. Recoveries for gold, copper, and silver were 93%, 85% and 79%, respectively. Cash operating costs at EVBC, including royalties, were $745 per ounce of gold, net of by-product revenues.

EVBC gold head grades are expected to steadily increase over the next few months and gold production for the fiscal year ending September 30, 2012 is targeted to be approximately 52,000 ounces.

2. Don Mario Mine - UMZ

Don Mario Mine has been in commercial production since January 1, 2012. Production for the first and second quarter of the 2012 fiscal year is summarized in the table below:

	First quarter of fiscal 2012		Second quarter of fiscal 2012
	LPF Oxide ore		LPF Oxide ore		Flotation-Transition Ore		Total second quarter
Throughput (tonnes)	117,933		62,701		41,774		104,475
Head Grade
Cu,%	1.75	%	1.97	%	1.72	%	1.87	%
Au,g/t	1.71		1.75		2.01		1.85
Ag,g/t	76.4		81.6		93.5		86.4
Recovery (%)
Cu	54.9		53.1		40.0		47.9
Au	35.1		28.2		35.4		31.1
Ag	21.7		22.6		36.4		28.1
Production (concentrate)
Tonnes	2,618		1,223		867		2,090
Cu,%	43.4	%	53.3	%	32.9	%	44.8	%
Au,g/t	27.1		25.4		35.7		29.7
Ag,g/t	748		944		1,618		1,223
Production (fines)
Cu,tonnes	1,135		652		286		938
Cu,1000 lbs.	2,504		1,438		630		2,068
Au,ounces	2,282		997		997		1,994
Ag,ounces	62,929		37,136		45,097		82,233

During the second quarter of fiscal 2012, concentrate production was 2,068,000 pounds of copper, 1,994 ounces of gold, and 82,233 ounces of silver. Recoveries for copper, gold, and silver were 48%, 31% and 28%, respectively. UMZ cash operating costs were $1.66 per pound of copper, net of by-product revenues, a revision from the $0.73 per pound of copper net of by-product revenues reported in the April 10, 2012 press release after reconciliation of all production costs and product sold.

Financial Highlights:

Orvana's financial highlights for the three and six months ended March 31, 2012 are summarized below:

	Three months ended March 31, 2012			Three months ended March 31, 2011			Six months ended March 31, 2012			Six months ended March 31, 2011
Revenue	$	31,245		$	6,330		$	46,618		$	12,757
Gross margin		9,029			1,352			9,383			2,370
Net gain (loss) before derivatives mark-to-market adjustment, net-of-tax(1)		4,128			1,720			992			(1,055	)
Gain (loss) on derivatives settlements and mark-to-market adjustment, net-of-tax(1)		(12,087	)		(3,360	)		(13,456	)		(21,984	)
Net earnings (loss)		(7,959	)		(1,640	)		(12,464	)		(23,039	)
Net earnings (loss) per share - basic and diluted	$	(0.06	)	$	(0.01	)	$	(0.09	)	$	(0.20	)
Net earnings (loss) per share before derivatives settlements and mark-to-market adjustment, net-of-tax- basic and diluted(1)	$	0.03		$	0.01		$	0.01		$	(0.01	)
Cash provided by (used in) operating activities		(5,568	)		(1,433	)		(278	)		(8,218	)
Cash and cash equivalents								7,431			23,546
Total assets								266,558			202,199
Long-term debt, net of financing fees								66,973			47,304
Obligations under capital leases								3,165			3,022
Shareholders' equity							$	116,293		$	87,457

(1)	These amounts are non-IFRS measures and are derived from the following amounts in the income statement: net derivative losses for the three and six months of 2012 at $17,267 and $19,223 respectively, less the three and six month deferred income tax recoveries of $5,180 and $5,767 respectively.

Revenues for the second quarter ended March 31, 2012 were $31,245 on sales of 11,331 ounces of gold, 86,636 ounces of silver, and 3,326,000 pounds of copper.

For the three months ended March 31, 2012 gross margin was $9,029. The net loss for the second quarter ended March 31, 2012 was $7,959 ($0.06 loss per share), resulting primarily from the loss on the settlement and mark-to-market revaluation of derivative contracts.

Cash used in operating activities was $5,568 for the quarter ended March 31, 2012.

Cash and cash equivalents amounted to $7,431 at March 31, 2012 compared to $12,244 at September 30, 2011.

During the second quarter of fiscal 2012, the Company entered into a $5,000 secured loan facility with its majority shareholder, Fabulosa Mines Limited ("Fabulosa"). The loan was subsequently amended, including increasing it to $6,500 and converting it to a term loan with a maturity date of July 1, 2013. The terms of the loan agreement are summarized in the MD&A and financial statements for March 31, 2012.

The consolidated financial statements and Management's Discussion & Analysis for the period ended March 31, 2012 are available on SEDAR and at www.orvana.com.

Outlook:

The forward looking statements made in this section are intended to provide an overview of management's expectations with respect to certain future operating activities of the Company and may not be appropriate for other purposes.

In the short term, Orvana is focused on its operations at the EVBC gold-copper-silver mine in northern Spain and its Don Mario Mine copper-gold-silver mine in eastern Bolivia as well as advancing its Copperwood copper project in Michigan.

During fiscal 2012, the Company expects gold production from EVBC to be about 52,000 ounces per annum, copper production about 2,000 tonnes per annum, and silver production about 125,000 ounces per annum. As head grades improve, cash cost per ounce of gold produced is expected to decrease. Mine life is now projected at 10 years. Beyond 2012, Orvana will continue to work on improving head grade, increasing gold production and reducing cost per ounce of gold produced. Completing the shaft, which is anticipated to take place during the third quarter of fiscal 2012, will allow for more efficient ore extraction, resulting in improved flexibility, increased mine production, and reduced costs. Orvana will also investigate alternatives to maximize the mill output and enhance recoveries, including a possible expansion of the mill in the future.

During fiscal 2012, the Company's focus at Don Mario will be on improving recoveries for both the LPF and flotation-only processing. Production in fiscal 2012 is expected to be about 5,500 tonnes copper, 12,500 ounces of gold, and 500,000 ounces of silver, respectively.

The Copperwood permitting process will continue during the third quarter of fiscal 2012. The Company will continue to investigate means of financing the project, including a joint venture partnership, debt financing, off-take agreement, and equity financing, among others.

Orvana projects total annual gold production to be approximately 64,500 ounces, total copper production to be 7,500 tonnes, and total silver production to be 625,000 ounces.

The Company will hold a conference call on Thursday May 17, 2012 at 10:00 a.m. (Eastern Time) to discuss the fiscal 2012 second quarter results. Following the presentation there will be a question and answer period for analysts and investors.

The conference call can be accessed at 1-416-695-7806 or the North American toll-free number at 1-888-789-9572, using the pass code 7100 584 followed by the number sign.

About Orvana:

Orvana Minerals is a multi-mine gold and copper producer. Orvana's primary asset is the El Valle-Boinás/Carlés ("EVBC") gold-copper Mine in northern Spain. Orvana also owns and operates the Don Mario Mine in Bolivia, processing its copper-gold-silver Upper Mineralized Zone ("UMZ") deposit. Orvana is also advancing its major Copperwood copper project in Michigan, USA. Additional information is available at Orvana's website (www.orvana.com).

Forward Looking Disclaimer

Certain statements in this press release constitute forward-looking statements or forward-looking information within the meaning of applicable securities laws ("forward-looking statements"). Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, assumptions, potentials, future events or performance (often, but not always, using words or phrases such as "believes", "expects" "plans", "estimates" or "intends" or stating that certain actions, events or results "may", "could", "would", "might", "will" or "are projected to" be taken or achieved) are not statements of historical fact, but are forward-looking statements.

Forward-looking statements relate to, among other things, all aspects of the development of the Upper Mineralized Zone ("UMZ") deposit at the Don Mario Mine in Bolivia, the El Valle-Boinás/Carlés Mine in Spain and the Copperwood project in Michigan and their potential operations and production; the outcome and timing of decisions with respect to whether and how to proceed with such development and production; the timing and outcome of any such development and production; estimates of future capital expenditures; mineral resource estimates; estimates of permitting time lines; statements and information regarding future feasibility studies and their results; production forecasts; future transactions; future metal prices; the ability to achieve additional growth and geographic diversification; future production costs; future financial performance, including the ability to increase cash flow and profits; future financing requirements; and mine development plans.

Forward-looking statements are necessarily based upon a number of estimates and assumptions that, while considered reasonable by Orvana as of the date of such statements, are inherently subject to significant business, economic and competitive uncertainties and contingencies. The estimates and assumptions of Orvana contained or incorporated by reference in this news release, which may prove to be incorrect, include, but are not limited to, the various assumptions set forth herein and in the Company's most recently filed Annual Information Form, or as otherwise expressly incorporated herein by reference as well as: there being no significant disruptions affecting operations, whether due to labour disruptions, supply disruptions, power disruptions, damage to equipment or otherwise; permitting, development, operations, expansion and acquisitions at the UMZ deposit, El Valle-Boinás/Carle╠üs Mine and the Copperwood project being consistent with the Company's current expectations; political developments in any jurisdiction in which the Company operates being consistent with its current expectations; certain price assumptions for gold, copper and silver; prices for key supplies being approximately consistent with current levels; production and cost of sales forecasts meeting expectations; the accuracy of the Company's current mineral reserve and mineral resource estimates; and labour and materials costs increasing on a basis consistent with Orvana's current expectations.

A variety of inherent risks, uncertainties and factors, many of which are beyond the Company's control, affect the operations, performance and results of the Company and its business, and could cause actual events or results to differ materially from estimated or anticipated events or results expressed or implied by forward looking statements. Some of these risks, uncertainties and factors include fluctuations in the price of gold, silver and copper; the need to recalculate estimates of resources based on actual production experience; the failure to achieve production estimates; variations in the grade of ore mined; variations in the cost of operations; the availability of qualified personnel; the Company's ability to obtain and maintain all necessary regulatory approvals and licenses; the Company's ability to use cyanide in its mining operations; risks generally associated with mineral exploration and development, including the Company's ability to develop the UMZ deposit, the Copperwood project or the El Valle-Boinás/Carle╠üs Mine; the Company's ability to acquire and develop mineral properties and to successfully integrate such acquisitions; the Company's ability to obtain financing when required on terms that are acceptable to the Company; challenges to the Company's interests in its property and mineral rights; current, pending and proposed legislative or regulatory developments or changes in political, social or economic conditions in the countries in which the Company operates; general economic conditions worldwide; and the risks identified in Orvana's Management's Discussion and Analysis for the period ended March 31, 2012 under the heading "Risks and Uncertainties". This list is not exhaustive of the factors that may affect any of the Company's forward-looking statements and reference should also be made to the Company's Annual Information Form for a description of additional risk factors.

Forward-looking statements are based on management's current plans, estimates, projections, beliefs and opinions and, except as required by law, the Company does not undertake any obligation to update forward-looking statements should assumptions related to these plans, estimates, projections, beliefs and opinions change. Readers are cautioned not to put undue reliance on forward-looking statements.

Non-IFRS Measures

The Company has used Non-IFRS measures, including direct mine operating costs, cash operating costs, total cash costs and total production costs, and related unit cost information, because it understands that certain investors use this information to determine the Company's ability to generate earnings as cash flow for use in investing and other activities. The Company believes that conventional measures of performance prepared in accordance with IFRS do not fully illustrate the ability of its operating mine to generate cash flow. Non-IFRS measures do not have any standardized meaning prescribed under IFRS, should not be construed as an alternative to IFRS reporting of operating expenses, and may not be comparable to similar measures presented by other companies. The measures are not necessarily indicative of cost of sales as determined under IFRS. Cash costs are determined in accordance with the former Gold Institute's Production Cost Standard. Cash costs for copper are determined in accordance with methods used by Brook Hunt.