Through a deal with a private owner, Brazilian Resources (BZIN-C) has acquired a majority interest in the producing Santa Maria open-pit, heap-leach gold mine in Brazil.
Brazilian recently signed a 3-year, US$3.2-million deal giving it a 70% interest in Santa Maria, along with 8,345 ha of surrounding land. The junior has already paid US$1 million to the property vendor, and will assume management of the mine.
The outstanding balance will be paid in instalments, with US$3 million provided by McCarvill (MCR-T), a Toronto-based royalty company. McCarvill will retain a 4% net smelter return royalty (NSR) on Santa Maria until Brazilian repays the US$3 million, after which time the NSR will be reduced to 1.25%.
Since entering production in 1992, the Santa Maria mine has cranked out 41,000 oz. gold. An additional 25,000 oz. are expected to be produced over the next year at an average cash cost of US$240 per oz.
Minable reserves stand at 1.95 million tonnes grading 2.44 grams gold per tonne, equivalent to 195,000 contained ounces. This mineralization exists in a 1.4-km-long pit, which occupies a 9-km-long shear zone in the Vila Nova Group greenstone belt.
Brazilian intends to upgrade the project’s existing plant and equipment in an attempt to boost production to between 35,000 and 40,000 oz. A second leach pad will be constructed, as well.
Drilling will test for additional resources below and around the pit outline, while upgrading known resources to the reserve category.
The company also owns the Brazilian Sabara property, which hosts 7.2 million tonnes grading 2.7 grams gold. A US$450,000 drill program is scheduled.
Placer Dome (PDG-T) can acquire a 70% interest in the Sabara property on or before Dec. 18.
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