Tocantinzinho Project
3DLong Section Looking Northeast (schematic above - click to enlarge)
In 2004, Brazauro made a major gold discovery at its 100%-controlled, 43,840-hectare TZ Gold Project in the gold-rich Tapajós District of Brazil.
As of September 2008, 97 drill holes (25,735 meters) were completed of which 85 delineated a gold zone that is approximately 700-meters long by 100 to 150-meters wide by +300-meters deep, averaging 1.25 grams gold per tonne. The discovery zone is open to depth. Gold is evenly distributed in the Proterozoic granitic host rock with some zones of high grade. The gold occurs in a sheeted stockwork of quartz-chlorite veinlets. Pyrite is ubiquitous with the gold mineralization and in high grade zones the presence of chalcopyrite and galena is also noted. The overall sulfide content of the mineralized body is in the range of 1-2%. In September 2007 NCL do Brasil Ltda. estimated an CNI 43-101 qualified resource made up of 24.6 million tonnes of Indicated Resources at an average grade of 1.33g/t Au plus 27.7 million tonnes of Inferred Resources at an average grade of 1.18g/t Au for a grand total of 2.1 million ounces of gold. NCL concluded that the high grade intercepts present throughout the deposit may also continue with depth providing potential for future underground mining. As in the study no oxide ores nor tailings were included, inclusions of that can further enhance the resource.
Metallurgical testing by Lakefield Research(Canada) and Hazen Research of Golden, CO indicated that the best process in this instance will be Grinding, Flotation and cyanidation of the concentrate with an estimated final recovery of 91%. Based on the above, NCL recently completed a positive "Scoping Study" that included a preliminary economic evaluation, infrastructure and energy studies using the available information. This study resulted in the following observations:
1) Average annual gold production of 123,000 ounces of gold over a 13 years period based on a 3 million tonnes per year open pit mining schedule with a strippng ratio of 2.84.
2) Operating cash cost of $367/ounce and capital expense of $128 million.
3) Net Present Value(NPV) of $42 million at a discount of 5% and a gold price of $550 per ounce.
4) Project internal Rate of Return(IRR) of 10%.
5) The project is more sensitive to process recovery, grade and price and less to operational and capital expenses. At a spot price of $800 per ounce, the NPV, discounted at 5%, is $267 million with an IRR of 28%, utilizing the same pit optimization as at $550 per ounce.
6) Economics based on an Open Pit Optimization using a block model and Whittle Lerchs-Grossman pit optimization software.
During the dry season of 2005, one-hundred-meters-spaced low-level fixed wing airborne magnetic and radiometric surveys were completed over the central 150 square kilometers area of TZ. Another 450 square kilometers of the surrounding region were covered by the same survey, but flight lines were spaced at 400 meters. The overall survey located fifteen targets that are being investigated. Stream “float sampling” has outlined an area of anomalous gold values approximately 12 km southwest of TZ. This anomaly is now followed up with a detailed auger soil sampling survey.
In July of 2008 Brazauro signed an option agreement with Eldorado Gold Corporation, where Eldorado can earn up to 75 % of the TZ project for a total of C$ 123 million in expenditures and cash- payments as follows:
Private placement of 8.8 million Brazauro shares @ C$ 0.95 for C$ 8.36 million. This includes ½ a warrant priced at C$ 1.30. This is equivalent to an additional C$ 5.72 million.
Eldorado will fund the project for a minimum of C$ 9.5 million over a two year period. Completing the above and making a Payment of C$ 40 million will earn Eldorado a 60% share of the TZ project.
A further 10% can be acquired by paying Brazauro C$ 30 million and this can increase to C$ 40 million if the resource proves to be >2.5 million ounces of gold. On top of that an additional 5% for a total of 75% can be purchased by paying another C$ 20 million.
Project Photo Gallery (click to enlarge)
In addition to the above Eldorado will become the operator of the project and will have a first right of offer on all Brazauro projects in Brazil.
Granite outcrop with quartz stockwork.
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Granite outcrop with disseminated oxidized pyrite.
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Sheeted quartz veins in saprolite.
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Hydrothermalized mineralized granites.
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Tocantinzinho aerial view.
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Tocantinzinho transversal view.
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Garimpeiro workings at Tocantinzinho.
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Surface trace of TZ gold mineralization.
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Looking SE along mineralized zone.
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Project geologist logging core.
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Geologists at core shed.
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Drilling.
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Artisenal miners working rhyolite.
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Mule carrying drill rods.
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Moving the rig.
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Loading drill rig onto plane to be flown to Tocantinzinho.
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Tocantinzinho camp.
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Proud field team.
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Schematics:
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TZ landsat map.
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TZ geology.
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