Rio Novo Gold is a near-term producer in Brazil

Rio Novo Gold (RN-T) hopes to become a near-term gold producer by bringing its two advanced-stage Brazilian properties into production — the Almas gold project in the southeastern part of Tocantins state and the Guaranta gold project in the northern part of Mato Grosso state.

Located in central-west Brazil near the town of Almas, the Almas project includes one past-producing mine called Paiol (formerly operated by Vale (VALE-N), and a number of gold exploration targets, as well as the Arroz deposit.

Between 1996 and 2000 Vale churned out 86,000 ounces of gold from the open-pit mine and heap-leach operation at Paiol before production was suspended due to low gold prices. Rio Novo believes that Vale left behind about 73,000 ounces of gold on its leach pad alone.

Measured and indicated resources for both open pit and underground at Almas stand at 16.52 million tonnes grading 1.16 grams gold for contained gold of 614,311 ounces. Inferred resources add 3.87 million tonnes grading 1.64 grams gold for contained gold of about 204,316 ounces.

The current resources, which are almost entirely measured and indicated, support a mine life of six to seven years, the company announced in a press release on June 13.

Individual ore-bearing zones within the Paiol and Arroz deposits consist of lens-shaped ore shoots and anastomosing irregularly shaped bodies within the plane of the shear zone. Ore shoots occur in steeply plunging lenses.

In April Rio Novo acquired an unused ball mill with throughput capacity of 2 million tonnes per year (5,800 tonnes per day) and several other processing equipment. In the same month, the junior also signed and agreement to acquire a 100% interest in five mineral rights covering an area adjacent to the project’s eastern border. The areas add 30,766 hectares to the project, taking the company’s total land package at Almas to 100,853 hectares, an increase of 163% since the company’s initial public offering.

Meanwhile at its Guranta project, Rio Novo reported in early May that results from an extension hole (FX1D-0021), about 40 metres west of previous drilling at its X1 deposit, returned “significant” intervals including 46.65 metres of 1.54 grams gold per tonne, 8 metres of 7.36 grams gold, and 13 metres of 1.92 grams gold.

Highlights of continuously mineralized intervals within the same hole included 3.56 grams gold over 14.65 metres, 11.63 grams gold over 5 metres, and 3.03 grams gold over 9.7 metres.

“X1 has some very good extension holes,” David Beatty, Rio Novo’s chief executive, wrote in an email to The Northern Miner.

The X1 deposit is about 11 km south of the town of Guaranta do Norte, while the Guaranta deposit itself is about 4 km north of Guranta do Norte.

Measured and indicated resources for the X1 deposit within an optimized pit shell at a gold-equivalent cutoff grade of 0.5 gram, total nearly 8 million tonnes averaging 1.35 grams gold and 4.6 grams silver (or 364,000 gold-equivalent oz). Inferred resources add 471,100 tonnes averaging 1.43 grams gold and 4.5 grams silver.

Guaranta lies within the Alta Floresta gold province, a paleo-mezzo Proterozoic environment in the southern portion of the Amazon Craton. The region hosts both porphyry-related and epithermal gold deposits associated with granitic and calc-alkaline intrusions and lode gold deposits related to regional shear zones.

At presstime in Toronto Rio Novo Gold was trading at $1.36 per share within a 52-week range of $1.10 and $2.82. The company has about 113.1 million shares outstanding.