Garimpeiros teach Ambrex the ABCs of mining in Brazil

In some gold camps, the old miners are the stuff of legend. In the Brazilian interior, the “old miners” live down the road and have young families. And now they are being joined by mining companies that see potential in one of the world’s youngest gold camps.

The Northern Miner recently visited the gold projects of Ambrex Mining (AMBX-C) in the northern part of Mato Grosso state, in Brazil’s Amazon Basin.

Ambrex is one of several companies that have moved into the region, following the lead of the small-scale garimpeiro miners, and encouraged by a relaxed climate for foreign investment in Brazil.

The garimpeiro gold rush in the northern part of Mato Grosso started in 1979 and lasted through most of the 1980s as road-building projects wormed into the Amazon jungle. The garimpeiros were drawn from the settled areas of Brazil, especially the poorer northeast, and they soon found they could make a decent living in the rivers of the interior.

Garimpeiros worked in groups, going down the rivers by motorboat and panning at each small stream. If the stream sediments showed gold, they would mine their way upstream by hand or by using hydraulic monitors or heavy equipment.

To get the gold from the alluvial sediments, they used stamp mills and simple sluice boxes, perhaps recovering a third of the metal.

The garimpeiros hand-cleared camps and airstrips, using the wood for camp buildings, sluice boxes and even barges. They paid for fuel and gear in gold.

As the garimpeiros worked upstream, they moved from the alluvial material in the streams to the weathered soils, and ultimately to the bedrock sources of the gold. That meant ripping with heavy equipment, or drilling and blasting — and while some garimpeiros had the resources to do that, others did not.

Moreover, in the bedrock occurrences there was less free gold, and recoveries fell drastically. All in all, the bedrock targets were out of the garimpeiros’ reach — but good ground is good ground.

Enter the exploration companies. The Brazilian government, recognizing that the garimpeiros were there to stay, had legally recognized alluvial mining rights in the interior and granted them to the garimpeiro co-operatives. With the surface deposits worked out, the garimpeiros found the mining rights themselves were marketable. Domestic companies were the first ones in, but Brazil’s new, more generous, foreign-investment policies are now drawing companies from offshore.

Story-tellers

What the garimpeiros lacked in formal training, they made up for with shrewd and careful observations in the workings. “They have a good story to tell,” says Ambrex President William Fisher. “A garimpeiro can tell you, `I tried over here and got nothing, and over there I got so many grams.'” Solid information helps to make deals possible.

The Ambrex approach has combined acquisitions with staking. The company has five properties in the northern part of Mato Grosso, for a total of 2,950 sq.

km. Three are held under option from Vancouver-based Consolidated Madison Holdings (KAD-V), which retains a 25% interest through its subsidiary, Madison do Brasil. All five properties centre on alluvial workings that have reached hard-rock gold showings, where garimpeiro methods were no longer of any use.

The properties are in the Juruena-Teles Pires horst, a fault block of Archean gneisses bounded by northwest-striking faults of middle to late Proterozoic age. Gold showings appear to be concentrated near the boundary faults, in fracture systems and stockworks.

The flagship project, Aripuana, is a 20-sq.-km property covering garimpeiro workings that produced an estimated 8-10 tonnes of gold between 1979 and 1990. It is near the town of Aripuana, in northwestern Mato Grosso.

The property’s centrepiece is the Cava do Expedito, an open pit worked by garimpeiros in the last three years of the gold rush. The pit is believed to have produced about 70 kg of gold, though the garimpeiros spent about 60 kg of gold on production using bulldozers and backhoes. In 1993, Unigeo, the Brazilian unit of Anglo American, tried unsuccessfully to reach an agreement with the garimpeiros on the property, but soil surveys convinced the company to stake adjoining areas to the south and the northwest. Unigeo is now drilling near Ambrex’s western boundary, on a 50-metre grid pattern.

Enter Ambrex

Western Mining’s Brazilian arm, WMC Minerazao, took on the property in 1994, and found strong electromagnetic and induced-polarization responses in an area immediately west of the Expedito pit. Geochemical surveys showed high concentrations of gold, copper and molybdenum in near-surface soils in the same part of the property. WMC dropped the property, despite the encouraging exploration results, following a change in its exploration strategy. This left the ground open for Madison, which optioned the property to Ambrex.

The hard-rock gold deposit is in a shear zone in strongly altered siltstones.

The mineralization — gold, with accessory copper and molybdenum — is concentrated in strongly silicified, sericitized and hematitized rock with sulphides. Some greisenization (the mica-fluorite alteration characteristic of tin deposits) has also been found. Repeating, parallel shear structures extend along a ridge on the property, and Helio Monteiro, Ambrex’s consultant, sees the possibility that the siltstones are folded into a synform along the margin of a granite contact.

Magnetic and induced-polarization surveys are under way, and the company is drilling targets near the open pit. The drill had been set up in the pit, but heavy rains caused a mud slide, which buried the drill. “All you could see was part of the tower,” says Victor Retamal, president of Ambrex’s Brazilian subsidiary, Minerazao Rio Taboco. A second drill was brought on to the site and had begun work at the time of the site visit; a total of 2,500 metres of drilling is planned. “We’ll have a whole lot of data really fast next month,” predicts Fisher.

Ambrex is also sampling the deep residual soils, on the principle that samples taken from the base of the overburden will show a more coherent pattern than WMC’s shallow samples. With weathered bedrock at a depth of 1.5-2.5 metres, it should be possible to take samples from the base of the soil profile with a hand auger.

Trairao project

While Ambrex is concentrating its early efforts at Aripuana, its Trairao project, about 420 km to the east, offers a chance to perform some simple, low-budget exploration on a quality prospect. Trairao is about 70 km northeast of Alta Floresta, a city of about 60,000 with good road and air connections to the rest of Brazil.

The property, still being worked by a small crew of garimpeiros, is accessible by road except during the wet season, and hosts a stockwork-type gold showing in highly altered granite. The gold grades are in the range of 0.2 to 4 grams per tonne, and are associated with pyrite and chalcopyrite.

Ambrex’s preliminary geological mapping has identified a zone of fracturing and brecciation in granites and felsic volcanic rocks, with strong hydrothermal alteration. The faulted area strikes northwest, roughly parallel to a large, regional fault nearby.

The company’s reconnaissance geochemical program was a campaign of stream-sediment sampling, with the samples panned for gold. The best results coincided with the fractured and altered bedrock. The main mineralized showing is on a prominent granite hill, offering a chance to cut a set of large trenches across the showing to evaluate the geological structure. “It’s a large area, but we have a well-defined target,” says Monteiro, adding that the mineralized rocks are also well-exposed. “I enjoy seeing this — it’s not common in Brazil.”

The company believes airborne geophysics — including electromagnetic surveys to indicate conductive bodies and radiometric surveys to detect potassium-enriched, altered rocks — may be useful at Trairao.

Cabeza property

Ambrex has reconnaissance work under way at its Cabeza property, southwest of Alta Floresta, and is interpreting satellite imagery of its
Juruena and Paranaita properties. The garimpeiros are easy to see on satellite photography, and initial work can be guided straight to the favorable areas.

Financing is already in place for the exploration programs. St. Genevieve Resources (SGV-T) took a $2.1-million private placement of Ambrex shares and warrants in return for a 30% interest in the company’s Brazilian assets. The Montreal company has exercised 2 million warrants for proceeds of $1 million.

St. Genevieve will begin contributing 30% of exploration funding after Ambrex has spent $5 million on the properties.

Underlying all the company’s plans is an exploration strategy that fits the time and place. Treating people well is essential when dealing with the garimpeiros, who are often turned off by the take-it-or-leave-it approach sometimes favored by large companies. “It’s not big payments, it’s respect,” says Fisher, who has found that the company’s local contacts mean that Ambrex is trusted. Fisher also means to keep Ambrex focused on Mato Grosso, where it has the contacts and the trust. “Going to another state would be like starting all over.”

The company continues to pursue opportunities to take on other properties, hoping to have an inventory of hard-rock prospects along the mineralized trend from Aripuana in the west to Peixoto de Azevedo in the east. With 49% of the largely state-owned mining company Companha Vale do Rio Doce (CVRD) being sold off in the near future, Ambrex sees the possibility of foreign bidders looking for other opportunities in Brazil, and means to be visible.