Brazil Resources (TSXV: BRI; US-OTC: BRIZF) aims to grow its gold resources by acquiring the large Titiribi gold-copper project in central Colombia.
The Vancouver-based junior, which has gold projects in Brazil and Alaska, and a uranium joint venture in Saskatchewan, has agreed to buy Sunward Investments, a subsidiary of NovaCopper (TSX: NCQ; NYSE-MKT: NCQ) that owns 100% of Titiribi.
Brazil intends to pay 5 million shares and 1 million warrants exercisable at $3.50 per share for two years in exchange for Sunward. Based on its Aug. 17 close of $2.24 per share, the acquisition price is $11.2 million, excluding warrants.
“The acquisition is prospective and located in a good area, with solid infrastructure,” Cantor Fitzgerald analyst Rob Chang writes. He has a “buy” and $3.45 target on the stock.
The Titiribi project sits 70 km southwest of Medellin in the Antioquia department, within the historical Titiribi mining district. The project is road accessible by paved highway from Medellin and has electrical power lines within 3 km, Brazil says.
The 39 sq. km project contains several near-surface, bulk-tonnage gold-copper and related epithermal gold systems. Sunward explored nine mineralized areas, including the main Cerro Vetas, Chisperos and NW Breccia zones, and five other peripheral targets.
According to Sunward’s 2013 technical report, the deposit’s three main zones host measured and indicated resources of 4.66 million oz. gold (285.8 million tonnes grading 0.5 gram gold per tonne) and an inferred resource of 6.01 million oz. (349.4 million tonnes at 0.53 gram), using a 0.3-gram gold cut-off. They also contain 654.4 million lb. copper in measured and indicated, and 216.3 million lb. in inferred.
The project saw extensive exploration from 2012 to 2013. Through February 2013, Sunward drilled nearly 145,000 metres in 270 holes on the deposit, including 184 holes in Cerro Vetas, Chisperos and NW Breccia.
Once the transaction closes, Brazil’s geologists will review the drilling database to pinpoint areas for follow-up exploration and commission an independent resource estimate, the company’s president and CEO Garnet Dawson states.
The junior intends to release more information on its plans shortly.
The project will likely join the ranks of the company’s main gold assets, which include the Cachoeira and Sao Jorge gold projects in Brazil’s Para state and the Whistler gold-copper project in Alaska.
NovaCopper — which is changing its name to Trilogy Metals (TSX: TMQ; NYSE-MKT: TMQ) — acquired Titiribi last June as part of its acquisition of Sunward Resources.
The sale will help NovaCopper focus on its high-grade copper, zinc and precious metals projects in northwestern Alaska, NovaCopper’s president and CEO Rick Van Nieuwenhuyse says.
Some gold assets in Antioquia near Titiribi include B2Gold’s (TSX: BTO; NYSE-MKT: BTG) Gramalote, Red Eagle Mining’s (TSXV: RD) near-producing San Ramon mine, Continental Gold’s (TSX: CNL) Buritica and Gran Colombia Gold’s (TSX: GCM) producing Marmato mine.
Brazil closed Aug. 18, the day of the acquisition news, up 12% to $2.51 per share.