Cabral Gold surges on best results as output nears

Cabral Gold (TSXV: CBR; US-OTC: CGBZF) shares shot to a new high after results from its Jerimum Cima target in northern Brazil returned the company’s strongest intervals ever as exploration continues to define a mineralized zone at the target.

Highlight hole DDH372 cut 25.8 metres grading 0.6 gram gold per tonne from 131 metres depth, including 9.5 metres at 87.4 metres and about 3 metres grading 285.5 grams gold, Cabral reported Thursday.

That intersection is likely the same zone pierced by previous holes that returned 45.6 metres at 4.5 grams gold and 9.5 metres grading 5.74 grams gold, Cabral said. Jerimum Cima is part of Cabral’s larger Cuiú Cuiú project in Para state, about 2,500 km north of Rio de Janeiro.

‘Important discovery’

“We have never encountered drill results of this magnitude,” Cabral CEO Alan Carter said in a release. “It is becoming increasingly clear that we have an important discovery at Jerimum Cima…[which] is not currently part of the existing resource base.”

The results point to a very high-grade central zone at Jerimum Cima that appears to be surrounded by lower grade stockwork mineralization, Carter added. 

While Cuiú Cuiú’s deposit ranks as mid-tier for its size, it stands out for strong economics, including a post-tax internal rate of return of 78% and a post-tax net present value (at a 5% discount) of about $74 million at a base case gold price of $2,500 per oz., according to an updated prefeasibility study from last year.

The project has estimated initial capital costs of $37.7 million with a payback period of 10 months. It could produce 113,000 oz. over a 6.2-year life.

Fourth-quarter production

Cabral plans to start production in the fourth quarter from a heap leach oxide starter pit at the Moreira Gomes target inside Cuiú Cuiú.

Company shares gained more than 13% to $1.23 apiece on Thursday morning in Toronto, for a market capitalization of $342.4 million. The stock has risen more than 350% over the past year.

Another drill highlight at Jermium Cima was hole DDH369 that cut 14 metres grading 0.73 gram gold from 211.8 metres depth, including 7.5 metres at 1.24 grams gold and 6.1 metres grading 0.55 gram gold.

286,700 contained gold

Cuiú Cuiú hosts 13.6 million indicated tonnes grading 0.5 gram gold for 216,182 oz. of contained gold. Inferred resources total 6.4 million tonnes at 0.34 gram gold for 70,570 oz. contained metal.

The project is located in Para state’s Tapajós region, where artisanal miners flocked during a gold rush from the late 1970s until the late 1990s, according to the Brazilian Department of Mineral Production. Cuiú Cuiú itself is estimated to have produced 1.5 to 2 million oz. of placer gold amid the wider rush that booked 20 to 30 million ounces.

Cuiú Cuiú is located about 25 km northwest of G Mining Ventures’ (TSX: GMIN; US-OTC: GMINF) Tocantinzinho project.