Vancouver — Luna Gold (LGC-V, LGCU-O) has only held the Piaba gold project in Brazil for half a year, but the company is moving the site forward as quickly as possible, aiming for production by early 2009.
In June, the company announced it had started a feasibility study scheduled to wrap up by early 2008. The program will include a recalculated resource estimate as well as mine models. In addition, roughly 3,600 metres of further definition drilling is planned, starting in the next few months.
Luna’s president and CEO, Tim Searcy, says the company has been able to “hit the ground running” because of the amount of technical and permitting work previously completed for the site.
“We have an aggressive timeline, but it’s possible because this project has been permitted right through to production in the past,” he says. “And the site already has access roads, power lines to the site are already in place, and there is more than enough water around, so all in all it’s a good position to be in.”
Within Brazil, the Guyana Shield and the Tapajos district host several multimillion-ounce deposits. Luna’s Piaba project, however, is in a different area: the Sao Luis craton, an underexplored ridge in the northeast of the country, just east of the Tapajos district.
“At present, there is not one industrial metals mine in the belt, but there are a number of plus-one-million-ounce deposits,” Searcy says.
A January 2000 resource estimate (not compliant with National Instrument 43-101) put the measured and indicated Piaba resource at 12.5 million tonnes grading 1.27 grams gold per tonne, plus inferred resources of 8.6 million tonnes of 1.27 grams gold, using a 0.3 gram gold cutoff and a gold price of US$350 per oz.
The laterite crust is 4 metres thick on average and shows gold enrichment where it overlays bedrock mineralization. The saprolitic zone below is generally 50 metres deep, though in places the weathering zone reaches as deep as 120 metres. Searcy says the weathered rock is another bonus for the project.
“This is deeply weathered material, which means we’re going to be able to employ dig-and-dump mining instead of blasting, which will of course lower our mining costs,” he says.
Another benefit is that the company won’t have to mill all of the rock — only 30% to 40% of the saprolite.
Luna acquired Piaba early this year through the purchase of Aurizona Goldfields, which owns Mineracao Aurizona, owner and operator of the Piaba project. In return for Aurizona Goldfields, Luna is handing over US$3.67 million to a Brascan Brasil subsidiary that had held 50% of Aurizona, and US$3 million plus 3 million shares to Eldorado Gold (ELD-T, EGO-X), which had held the other 50%.
Brascan had been involved in the project since 1978 and led exploration and development conducted to date. Work was focused on defining a resource within the main Piaba trend within the saprolite portions of the mineralized zones, the low-grade bulk tonnage targets.
The Piaba zone has seen over 10,000 metres of diamond drilling, and satellite zones about 12,000 metres of additional drilling. An environmental impact study for the site was completed in 1995 based on a gravity treatment process, and Luna has recently received notice that the earlier study can serve as a basis for current permitting applications.
The Piaba acquisition marked a change in direction for Luna, which until this year had focused on generating and exploring gold targets in Nevada.
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