Saturday 1st October 2016

Resource Clips

Lago Dourado President Forbes Gemmell on Brazil assays of 1.39 g/t gold over 57.5m

“There’s been artisanal miners there since the 1980s. They’ve mined upwards of half a million ounces of gold just in the soft saprolite material in the top 30 metres. There was a bit of drilling done in the mid-90s by a company called Ourominas Minerals—they put in 90 holes. The geochem anomaly there is plus-10 kilometres, so it’s a very large anomaly, and their drilling only focused under two of the artisanal pits. It’s a structural deposit, and what we’ve done differently coming in is we’ve done a geophysical interpretation which is showing some nice structures, and that’s what we’re going to be testing off with the drill bit over the next six months or so.

“We started drilling in December and the initial holes were under one of those pits which was drilled historically. There had already been 45 holes put under that pit. When we came in we just wanted to do 10 to 13 holes on the first pass, just to get a feel for what the controls of the mineralization are. So it was more for informational purposes. Then, afterwards, we started the geophysics. So we’ve gone through that, and now we’re moving to targets that look a lot better on the geophysical side of things.

“We’ve got three rigs. We’re basically testing three different targets. We’ve put out 13 holes out of a 70-hole campaign, so you’re probably going to see another 60 holes from now through the end of the year on those three different areas.

There’s a lot of gold at surface, and the key for us is trying to get an understanding of the structures that brought all that gold to surface. – Forbes Gemmell

“Because it’s such a big area, and we’re testing multiple targets, we’d only be able to drill off a resource on the back of a Phase 2 campaign. That would be a drill campaign through 2012. So we’re still a while away yet from a resource estimate. This first pass is trying to find out where the juicy spots are through nice, wide-spaced drilling. Then we can fill in the gaps in Phase 2.

“We see our expertise in exploration. So I think that’s going to be our focus. We are trying to show that this thing has size. We’re interested in finding a multimillion-ounce deposit. So we’re less interested in finding a half-million to million ounces and putting feasibility studies on that. Then, if there is interest from anyone in the area who does have production expertise, then that would probably make more sense.

“Brazil’s a good country. There’s a well-established mining code. There’s a little bit of red tape and bureaucracy, but once you’re through that—on the ground and set-up—it is a good place to operate in. I think it’s ranked third in South America by the Fraser Institute, so it’s definitely one of the better mining jurisdictions in the Americas.

“I think the key thing that makes our project stand out from others is the size of the footprint. We’ve had artisanal workings as well as gold and silver anomalies over 10 square kilometres. That would make it one of the biggest gold and silver anomalies in Brazil. There’s a lot of gold at surface, and the key for us is trying to get an understanding of the structures that brought all that gold to surface. That’s what we’re trying to test with this Phase 1 drill campaign. We’re on a good belt here, the Alta Floresta Gold Belt—it’s 500 kilometres long and you’ve got 40 gold deposits. There’s been up to 10 million ounces mined by artisanals along the belt.

“It’s going to be a busy six months for us, so there’s going to be a lot of news flow on the drill front. It’s an interesting point in time for us.”

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