Brazauro cashes up for Tapajos exploration program

Vancouver – Brazauro Resources (BZO-V) is raising $5.5 million through a brokered private placement to fund an exploration program in the Tapajos gold district, Para state, Brazil.

The district is home to Brazauro’s flagship Tocantinzinho project optioned by Eldorado Gold (ELD-T) in 2008.

The private placement, led by M Partners and Industrial Alliance Securities, has Brazauro issuing 8.5 million units at 65¢ with each unit consisting of a share and a half-share purchase warrant. Warrants will be exercisable for a year and a half at $1.

Exploration in the caldera setting of the Tapajos region at the Tocantinziho property has proven highly successful for Brazauro. So far Brazauro and Eldorado have outlined a resource of 16.5 million measured tonnes grading 1.317 grams gold per tonne and an indicated resource of 29 million tonnes grading 1.196 grams gold.

A positive scoping study estimated Tocantinzinho could support a 13-year mine and produce about 123,000 oz. gold a year. The scoping study forecasted capital costs at US$128 million and cash costs per oz. gold at US$367. Tocantinzinho’s net present value based on US$700 gold and discounted at 5% was $177 million. At the same gold price the project’s internal rate of return was 21.6%.

Processing at the proposed mine would be a combination of flotation and cyanidation.

Though Brazauro still fully controls the project, Eldorado is close to completing exploration expenditure requirements that will trigger a purchase decision. For $40 million Eldorado can buy a 60% stake in the gold project. Subject to further terms and payments, Eldorado can increase its stake to 75%.

With Eldorado in the driver’s seat at Tocantinzinho, the new funding will support work on targets beyond Tocantinzinho yet still in the Tapajos district. Brazauro has three other properties in the district: Piranhas, Bom Jardin and Agua Branca.

Brazauro says not only are there favourable caldera type targets to explore but that there is also the potential to find epithermal and porphyry prospects.

On news of the private placement Brazauro’s shareprice shed 5¢ to close at 65¢. The company has about 85 million share outstanding.



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