Drilling by Jaguar Mining (JAG-T) on a target near its Turmalina gold project in Brazil shows potential to increase the 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 down-dip and Jaguar will be moving to underground exploration and a feasibility study.
The new drill intersections are remarkably cnsistent, mainly showing thicknesses of 2 to 4 metres but locally widening out to as much as 8 metres. Grades mainly fell into the 2-gram 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 made a loss of US$2.8 million in the second quarter of 2006, on revenues 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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