Drilling by Jaguar Mining (JAG-T, JAGNF-O) on a target near its Turmalina gold project in Brazil shows potential to increase resources on the property and extend the mine life.
The target, Satinoco, is a little south of the Turmalina deposit in Minas Gerais state, and previous drilling had identified a moderately dipping mineralized zone. The recent drill program, which consisted of 62 holes for 7,857 metres of drilling, has established that the zone continues downdip and Jaguar will be moving to underground exploration and a feasibility study.
The new drill intersections are remarkably consistent, mainly showing thicknesses of 2 to 4 metres but locally widening out to as much as 8 metres. Grades mainly fell into the 2- to 6-gram range, with local high-grade intersections.
Jaguar has budgeted US$3 million for another 13,500 metres of drilling — 1,500 metres of it from underground — and a 1,250-metre network of exploration drifts. Satinoco would ultimately be developed from a crosscut driven from the Turmalina workings.
A revised feasibility study on Turmalina itself put the mineral reserve at 2.9 million tonnes grading 6.3 grams gold per tonne, part of a measured and indicated resource of 3.3 million tonnes grading 6.85 grams gold per tonne in three zones, Main, Northeast, and CD. Feasibility work on a mine producing 60,000 oz. annually for 8.6 years showed an estimated capital cost of US$31.5 million and a total cash cost of US$214 per oz. Construction of the plant for Turmalina is under way.
Jaguar posted a loss of US$2.8 million in the second quarter of 2006, on revenue of US$5.5 million, producing 10,114 oz. gold at a cash cost of US$376 per oz. In the second quarter of 2005 the company lost US$1.4 million.
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