Drilling lifts Belo Sun Mining

Assay results released Apr. 5 from Volta Grande, an advanced stage exploration project in Brazil about 60 km southwest of the town of Altamira in the country’s northern state of Para, sent the shares of Belo Sun Mining (BSX-T) up 3.6% to close at 86¢ apiece on a day when the majority of gold stocks were headed in the opposite direction.

Twelve holes drilled into the project’s Ouro Verde deposit returned high-grade intercepts such as 49.50 metres grading 5.04 grams gold per tonne from 184.9 metres including 8.33 metres grading 21.79 grams gold from 188.12 metres in hole 339, and 27.70 metres grading 3.57 grams gold from 146 metres including 11.35 metres grading 7.56 grams gold from 146 metres in hole 331. Hole 340 cut 29.25 metres of 2.21 grams gold from 214 metres including 9.50 metres of 4.50 grams gold from 217 metres.

In addition to the holes drilled at Ouro Verde, the company drilled another two at the Grota Seca deposit, where hole 332 returned 11.60 metres of 1.20 grams gold from 255 metres and 17.25 metres grading 0.74 gram gold and 7.10 metres of 0.59 gram gold in hole 334.

The Toronto-based company believes the project’s north block deposits–Ouro Verde and Grota Seca–are part of a major mineralized system that continues to expand beyond the known dimensions of about 300-400 metres in width and 4-5 km in length.

Measured and indicated resources currently stand at 41.83 million tonnes grading 1.66 grams gold per tonne for 2.23 million ounces of contained gold with inferred resources of 28.57 million tonnes grading 1.74 grams gold for 1.60 million ounces of contained gold.

An updated resource is expected later this quarter and a bankable  feasibility study will get underway in the first quarter of next year. It plans on 2015 as the start date for the commissioning of the project.

Since April 2010 the junior has drilled a total of 107,969 metres.

Volta Grande appears to host two types of gold mineralization: primary gold in intrusive rocks and secondary gold in an extensive saprolitic zone overlying the primary mineralization.

The project can be accessed from Altamira by river or by road and the city, which has an airport, is equipped with a 230-kilowatt transmission line from which the project can draw power for the first years of production at a rate of about $0.07 per kilowatt hour.

The government is also building the Belo Monte hydro dam about 20 km upstream of the Volta Grande project on the nearby Xingu River, which the company says will be the world’s third-largest hydro-damming facility. When the dam is completed Belo Sun says it will be able to access alternative low-cost electricity at an anticipated rate of $0.055 per kilowatt hour.

Exploration for gold in the Volta Grande area of the eastern Amazon region of Brazil dates to the Portuguese Conquests of the 16th century and has continued sporadically since then. The first discovery of gold at the Volta Grande (Big Bend) site is believed to have been made in the early 1900s. Between the 1960s and late 1990s artisanal miners extracted average grades from alluvial gold deposits in the area of up to three ounces per ton, the company outlines on its website.   

From 1996 to 1998, TVX and Battle Mountain Gold Mineração explored the ground in a joint venture with Companhia Nacional de Mineração (CNM). During that time TVX completed about 21,920 metres of diamond drilling and outlined preliminary pits for development in four target areas.

Belo Sun (then known as Verena) optioned the property in 2003 after TVX terminated its joint venture agreement with CNM and transferred all of its interests in the property back to its original owner. (A year later TVX was merged with Kinross Gold (K-T, KGC-N) and Battle Mountain Gold was acquired by Newmont Mining (NMC-T, NEM-N).)

At presstime in Toronto Belo Sun Mining was trading at 85¢ within a 52-week range of 82¢-$1.52. The junior has about 210 million shares outstanding.