Brazilian Gold looks to Tapajos

Brazilian Gold (BGC-V) wants investors to get familiar with Brazil’s Tapajos region.

While the area in the north central part of the country is the largest alluvial gold district in Brazil — and third largest in the world – it has gone largely un-explored using modern exploration methods.

Covering roughly 140,000 sq. km the geology is described a Proterozoic terrain with gold potential similar to eastern Canada, Western Africa and Western Australia.

That vast area has, by some estimates, turned out as much as 30 million oz. of gold over the years via crude alluvial methods.

As for more concrete numbers, the largest discovery to date in the region is Eldorado Gold’s (ELD-T, EGO-N) TZ or Tocantinzinho project which has proven and probable reserves of 49 million tonnes grading 1.25 grams gold for 2 million oz. and another 70 million tonnes grading 1.06 grams gold for 2.4 million oz. in the measured and indicated category.

Brazilian Gold’s stake in Tapajos comes by way of an array of ten projects, one of which, Sao Jorges, is in the development stage, while two others have seen recent drilling.

Sao Jorge currently has indicated resources of 8.3 million tonnes grading 1.3 grams gold for 343,000 oz. of gold and inferred resources of 12.6 million tonnes grading 1.1 grams gold for 458,000 oz.

All told that gives Brazilian 801,000 oz. of gold but it thinks that number is set to grow much larger by way of its current exploration program.

The program is being carried out by four rigs that are drilling over 20,000 metres with the aim bringing the total resource up to 1.5 million oz. of gold.

The specific economics of the project will become clearer in the coming weeks when the first ever preliminary economic assessment study gets released.

But Brazilian is already comfortable with its understanding of the geology. It says the property is underlain by various age and composition granites that are host to auriferous stockworks.

The deposit itself is roughly 700 metres long by 60 metre wide and has been delineated from surface to 200 metres depth by drilling.

The company’s belief in the deposits growth potential comes from its having outlined an anomaly that stretches out over a 1.4 km strike length and the deposit remains open at depth.

As for the metallurgy, the company says it can get recoveries in the low 90% range via a conventional gold recovery process of gravity, floatation and cyanidation.

If all goes according to plan, Brazilian says it will have Sao Jorge in production by the first quarter of 2014.

Next on the company’s radar in terms of priority is Rio Novo, a grass roots project whose development will be key to Brazilian achieving its goal of becoming a regional player.

Thus far things look good as results from its latest four diamond drill holes were highlighted by 1.14 grams gold over 73 metres; 5.82 grams gold over 3.0 metres and 0.43 grams gold over 71.4 metres.

Brazilian says the quartz and sulphide veins that make up the mineralized zone at Rio Novo have been intersected over potentially economic widths and grades in all four holes with mineralization extending from surface to 300 metres depth.

The project, which has seen garimpeiros mining of alluvials since the 1970’s, sits roughly 50-km southwest of Sao Jorge and is accessed by the Transgarimpeiro Highway.

And while Rio Novo has proven its prospectiveness it was another one of Brazilian’s key projects in the area, Boa Vista, which grabbed the markets attention in early March.

The assay results from a single hole at the project returned 1.4 grams over 102 metres – a result that was a key driver in the company’s stock price run from the 70¢ range to the $1.50 range.

Brazilian has a right to earn a 51% stake in Boa Vista by making option payments and funding exploration activities over 2 year

A common feature of all of the company’s key projects is the good infrastructure that they benefit from as Boa Vista, Rio Novo and Sao Jorge are all road accessible and have access to grid power and labour and service companies.

Coupled with that solid infrastructure is an experienced management team that has a penchant for doing big deals.

Brazilian’s chief executive, Ian Stalker, is the former chief executive or UraMin (which was sold to Areva for $2.5 billion) and also served as a VP for Goldfields (GFI-N, GOF-L) and COO of AngloGold Ashanti (AU-N).

Then there is Chairman Alvin Jackson who was the former president and COO of EuroZinc Mining, which was sold to Lundin for $3.3 billion.

With strong leadership and plenty of exploration work to be done, Brazilian Gold is set on making sure that gold investors become quite familiar with both the pronunciation and the mineral wealth of Tapajos.


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