Partners eye Sabara production (March 25, 2002)

Brazilian Resources (YBZ-V) and its operating partner, IMS Empreendimentos, are preparing to mine the former’s wholly owned Sabara gold deposit in the country’s Iron Quadrangle district.

The open-pit operation will target Zone B, which has a resource of about 641,358 tonnes averaging 3.5 grams gold per tonne.

Mined material will be trucked 36 km to an existing carbon-in-column mill; the throughput rate is pegged at 800 tonnes per day over an initial project life of 2.5 years; average cash costs are estimated to be US$176 per oz.; the recovery rate is 71%, though metallurgical tests may improve this; and the after-tax internal rate of return is 35.6%, based on a gold price of US$260 per oz.

Operating costs are expected to total US$1.2 million.

A 1996 evaluation placed Zone A’s inferred resource at 5.5 million tonnes running 1.38 grams gold. Exploration by Placer Dome (PDG-T) in 1997 included extensive soil and rock sampling over geophysical targets and along old workings. The major reported significant uncategorized resources in addition to Zones A and B.

Further work on Zone A and neighbouring areas will follow additional exploration and metallurgical tests for a bankable feasibility study on Zone B.

IMS can earn up to a 45% interest in the project by contributing the processing plant and heap-leach pads.