Belo Sun shines in Brazil (January 03, 2011)

VANCOUVER — A long gold hit at Belo Sun Mining’s (BSX-V) Volta Grande gold project in Brazil has helped boost the project’s potential and the company’s stock price.

The company, which changed its name from Verena in July, has been drilling on its Ouro Verde and Grota Seca deposits at the company’s flagship Volta project in Brazil’s Para state as it works to upgrade the existing resource estimate.

Hole 34, drilled near the centre of the Ouro Verde deposit, cut 283.8 metres grading 1.31 grams gold per tonne from surface, including a 41- metre section of 5 grams gold. The company reports that it is one of the best holes drilled yet at the project and reinforces the potential to upgrade the resource.

Hole 33, drilled roughly 100 metres updip, intersected 34.1 metres of 3.1 grams gold from 70 metres and 21.4 metres carrying 2.15 grams gold from 146 metres.

At the Grota Seca deposit, starting 500 metres southeast of Ouro Verde, hole 31 hit 2.3 metres of 11.98 grams gold from 66 metres depth and then 19.2 metres averaging 1.03 grams gold from 80 metres downhole.

In November, the company announced further results from Grota Seca and Ouro Verde. At Grota Seca, hole 24 cut 33 metres of 1.88 grams gold from 176 metres and hole 32 returned 15.3 metres carrying 2.48 grams gold from 113 metres and 23.1 metres averaging 1.97 grams gold from 141 metres.

At Ouro Verde, hole 28 hit 26.9 metres carrying 2.76 grams gold from 237 metres and hole 25 cut 18.1 metres at 2.17 grams gold from 265 metres.

The Ouro Verde deposit, with a resource update released in September 2010, now hosts 12.2 million indicated tonnes of 1.61 grams gold for 632,000 contained oz. gold, and 8.5 million inferred tonnes of 1.38 grams gold for 378,000 contained oz. gold.

The Grota Seca deposit, still using a September 2009 resource estimate, hosts 8.5 million indicated tonnes at 0.96 gram gold for 260,000 contained oz. gold, plus a sizable inferred resource of 33.5 million tonnes grading 0.92 gram gold for 990,000 contained oz. gold.

The 2009 estimate was part of a scoping study that, using US$900- per-oz. gold, set an internal rate of return of 22% and a pretax net present value of US$151 million at a 7.5% discount. The study set out a 10-year mine life producing an average of 200,000 oz. gold per year at full capacity, processing roughly 20,000 tonnes per day.

Belo Sun has started an environmental impact assessment for its Volta Grande project, with the Environmental Agency of Para state recently approving the reference terms for the assessment. The company expects to receive a preliminary licence in late 2011 or early 2012 and finish a feasibility study in the second quarter of 2011.

The company recently announced a non-brokered private placement of $5.5 million with current shareholders. The placement consists of issuing 7.3 million shares at 75¢ each, with no warrants attached. The company currently has 141 million shares outstanding and expects to close the financing soon.

On news of the drill results, Belo Sun’s shares were up 14¢ to end at 92¢ on 2.2 million shares traded. The company has a 52-week trading range of 19¢-96¢.