Brazilian Gold Corp BGC:TSX.V Yearly Review Report on São Jorge:
by Brand Mining 25/01/2012
Brand Mining provides readers of its blog with a “Yearly Review” on Brazilian Gold Corp’s flagship São Jorge project, located in the Tapajós region of northern Brazil.
Overview:
The São Jorge project is Brazilian Gold Corp’s flagship gold project and forms part of a adjacent package of gold projects that include the Jau Tragte (Previous Rio Novo), Boa Vista, Surubim and Pista Manual properties.
The latter projects have all seen exploration expenditure over the last twelve months with drilling activity that has led to the release of some positive assay results.
Drilling:
BGC commenced its phase one, 5,000 meter diamond drill campaign on the São Jorge project on the 24th November 2010. Over 14,000 meters of drilling has been sunk on the latest programme, where results were released on the 19th January 2012.
Positive PEA:
On the 21st July 2011 BGC received a National Instrument 43-101 Independent Technical Report Detailing a Positive Preliminary Economic Assessment on the São Jorge deposit.
Highlights Included:
- Independent PEA completed by Coffey Mining indicated a project internal rate of return (IRR) of 22.9% and a net present value (NPV) at a 5% discount rate of $99.1 M at a gold price of $1,300 per ounce.
- Project economics using a gold price of $1,560 per ounce indicated a project IRR of 36.4% and a NPV at a 5% discount rate of $181.4 M.
NI43-101 indicated resource of 343,000 ounces (8.3Mt grading 1.3 g/t gold) and an inferred resource of 458,000 ounces (12.6 Mt grading 1.1 g/t gold) using a 0.5 gram/tonne cut-off (Coffey Mining Sept. 14, 2010).
Flow Of Drilling Results:
By June 2011, BGC started to release a series of assay results, from the drilling programme undertaken at São Jorge. The programme has continued into 2012.
We have provided a table below with a series of the highlights of the drill campaign to date.
Abbreviated Summary of Assay Results from the São Jorge Project
Hole ID
|
Interval(m)*
|
Grade
g/t
|
Date Reported
|
SJD-086-11
|
12.00
|
1.71
|
30/06/2011
|
SJD-095-11
|
10.00
|
3.60
|
24/10/2011
|
SJD-094-11
|
22.00
|
1.96
|
24/10/2011
|
SJD-096-11
|
4.00
|
4.37
|
19/12/2011
|
SJD-103-11
|
11.00
|
2.28
|
19/12/2011
|
SJD-101-11
|
16.00
|
1.79
|
19/12/2011
|
SJD-108-11
|
20.00
|
2.2
|
19/12/2011
|
SJD-108-11
|
40.00
|
1.96
|
19/12/2011
|
SJD-108-11
|
8.00
|
3.9
|
19/01/2012
|
*True thickness is approximately 50% of drill interval.
These results so far suggest the BGC geological team is improving its knowledge of the geological setting at São Jorge. Since the release of the first set of results back in June 2011, the BGC geological team has drilled a holes on the São Jorge property that have revealed grades that are exceptionally good for a potential open pit, large scale mine operation. This suggests the targeting of drill holes is being well thought through by the BGC geological team and that this is based on an improved knowledge of the geological data sets that BGC has built up since its time on the ground at São Jorge.
Moving Into The Mining Phase:
A revised PEA and resource classification will be undertaken on São Jorge where the drilling results secured, post the previous PEA, will help provide a clearer picture of São Jorge and its potential to become a mineable asset. Subject to the revised PEA, Brazilian Gold is likely to move quickly into the feasibility study stage at São Jorge.
Infrastructure:
The São Jorge project is well situated with respect to infrastructure. It is located approximately 70 km north of the town of Novo Progresso on Highway BR163 that connects the city of Cuiaba in Mato Grosso state with the port city of Santarem on the Amazon River. The highway is currently being asphalted with approximately 30 km remaining to be completed between São Jorge and Novo Progresso. As well as having tarred road access, the project is connected to the electric power grid and a skilled work force is available in Novo Progresso, which has a population of approximately 60,000 people.
Both human capital and infrastructure capital support mine development at São Jorge.
Summary:
BGC has undertaken a year of heavy investment in drilling and on the overall project development of São Jorge. At the same time it has invested in drilling on its adjacent properties. The company is building up a robust geological picture of the Tapajós region of northern Brazil and can not be faulted on the use of shareholder resources, which have been deployed correctly on what has been so far an intensive drilling campaign.
Brazilian Gold is well positioned to develop São Jorge into a low cost, large scale open pit project. With a board and executive management that has a strong track record in taking exploration projects into mine development and production, we see BGC as a company that has real potential to become a mid-tier gold producer over the near term, where access to funding and capital market support would be well supported to make that happen.
Authors:
André Morrall FinstSMM
Dr.Iestyn Adams
iestyn@brandmining.co.uk
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