VANCOUVER, Jan. 27 /CNW/ - Brazilian Gold Corporation ("Brazilian Gold") is pleased to announce they have signed a Definitive Agreement through their wholly owned subsidiary, Cabral Resources (B.V.I.) Ltd. ("Cabral" or "Company"), with Golden Tapajós Mineração Ltda. ("Golden"), Octa Mineração, Ltda. ("Octa") and D'Gold Mineral, Ltda. ("D'Gold") to acquire up to a 51% interest in Boa Vista Gold Inc. ("BVG") that will indirectly hold the rights to the Boa Vista Project ("Project") through its ownership of Golden. BVG, a corporation formed under the laws of the British Virgin Islands, is owned 55% by Octa and 45% by D'Gold.
The Project is located in southern Para near the border with Mato Grosso and consists of two exploration concessions covering an area of approximately 12,536 hectares. The Project is situated approximately 280 kilometres southeast of the Company's Maues Project in Amazonas that is currently the focus of a diamond drilling and exploration program. The Definitive Agreement for this transaction was signed on January 21, 2010.
Boa Vista Project
The Boa Vista Project occurs near the southern border of the Tapajós Mineral Province ("TMP") which encompasses the Tapajós River and its drainages. The TMP underwent wide spread alluvial gold mining by local miners (garimpeiros) in the last 40 years resulting in the largest gold rush in the world in the latter part of the twentieth century. Many of the alluvial deposits are nearly exhausted, however since the early 1990's the primary source of these deposits have been explored by senior and junior mining companies. Exploration to date has identified a number of 1 million ounce or greater gold deposits that are amenable to low cost, bulk mineable open pit extraction.
The Project covers a number of historic alluvial deposits (garimpos) that have been partially explored by Golden. Exploration work to date includes mapping, soil and rock geochemistry and a geophysical survey (induced polarization) over selected garimpos, including Jair and Almir. The Jair target coincides with a northwest trending drainage along which alluvial gold has been mined over a distance of 4 kilometers. Bed rock exposed in pits along this structure consists of quartz+sulphide veins and stockworks hosted in sericite+pyrite altered granite. Grab samples of the vein material grade several grams per ton gold. A soil survey over Jair has identified a gold in soil anomaly that is 1.6 kilometers long by 400 meters wide and open along strike at both ends. The Almir target consists of a gold in soil anomaly that is 1 kilometer long by up to 400 meters wide that is coincident with a number of garimpo pits with alluvial workings and quartz vein exposure. Gold mineralization is similar to that exposed at Jair. Other high priority targets with known gold mineralization also exist within the concession boundaries.
The Company intends to undertake a systematic exploration program over the entire Project, which will include detailed geological mapping, and geochemical and geophysical surveys. A drill program will initially focus on the Jair and Almir targets and later extended to other targets as results are received, interpreted and prioritized.
Under the terms of the Definitive Agreement, Octa and D'Gold are transferring their 100% interest in Golden to BVG. For Cabral to earn a 51% interest in BVG, the Company must undertake the following:
- Pay to Octa and D'Gold the amount of US$600,000 on the closing date
which is on or before February 26, 2010, when various aspects of the
transaction contemplated by the Definitive Agreement are closed, and
- Incur US$3,000,000 in exploration expenses on or before the second
anniversary date of signing the Definitive Agreement - First Option.
The initial payment of US$600,000 will be held in escrow until such time as the two concessions are transferred to Golden. If the concessions are not transferred by March 31, 2010, Cabral has the right to extend the effective date or direct the escrow agent to return the initial payment with interest and without deduction, whereupon the Agreement shall terminate.
Upon fulfilling the First Option, Octa and D'Gold must notify Cabral within thirty (30) days of whether it wants to form a Joint Venture or grant Cabral a Second Option to earn an additional 19% interest in BVG. If Octa and D'Gold elect to grant Cabral a Second Option, Cabral must undertake the following:
- Pay to Octa and D'Gold the amount of US$1,000,000 within 10 business
days of being notified of the second option, and
- Incur US$3,000,000 in exploration expenses on or before the fourth
anniversary date of signing the Definitive Agreement bringing its
interest in BVG to 70%.
Each party of the Joint Venture that ensues will be responsible for funding exploration and development costs on a pro-rata basis or be diluted accordingly. Should any party's percentage ownership interest in the Joint Venture be reduced to less than 10%, or if a party fails to contribute its full pro-rata share for a work program that such party agreed to contribute to under the Joint Venture and does not cure such failure within 30 days, will have deemed to have forfeited its percentage ownership Interest to the other Joint Venture party and, in exchange will receive a 1.5% net smelter returns royalty. Cabral has the first right of refusal in the event that Octa or D'Gold decides to sell, assign or dispose of their interest in the Joint Venture.
The transaction is subject to customary closing conditions, including but not limited to, TSX Venture Exchange acceptance. There can be no assurance that the transaction will completed as proposed or at all.
Garnet Dawson, M.Sc., P.Geo. (British Columbia), Vice President, Exploration for the Company and a Qualified Person, as defined by National Instrument 43-101, has reviewed and approved the technical disclosure contained in this News Release.
About Brazilian Gold Corporation
Brazilian Gold Corporation is a Canadian based public company with a focus on acquisition, exploration and development of mineral properties in the Tapajos region of Northern Brazil. The Company has a balance sheet of Cdn$9 million in cash and cash equivalents of Cdn$9 million in investments as of September 30, 2009.
Some statements in this news release contain forward-looking information, including without limitation statements as to planned expenditures and exploration programs. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs.
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this news release.
SOURCE Brazilian Gold Corporation
For further information: For further information: Brazilian Gold Corporation, Alvin Jackson, Chairman and Chief Executive Officer, Tel: (604) 602-8188; Investor Relations, Tom Hart, Tel: (403) 701-4278