Brazilian Resources Provides Construction Progress and Update of NI 43-101 Technical Report for Itiquira Limestone Project

CONCORD, NH, Nov. 15, 2011 /CNW/ - Brazilian Resources, Inc. ("Brazilian Resources" or the "Company") reports on the construction progress at its 66.4%-owned Itiquira agricultural limestone project in the State of Mato Grosso, Brazil and provides highlights of an updated technical report prepared by Pincock Allen & Holt Brasil ("PAH"). The updated technical report as prepared by PAH was filed on SEDAR on November 14, 2011 and was prepared in accordance with Canadian National Instrument 43-101. The new PAH report is an update to a technical report prepared in 2010 by TechnoMine Services, LLC ("TechnoMine").  The Company also provides details of a second limestone property it has acquired in the State of Rondônia, Brazil, where it intends to conduct initial exploration activities during 2012. Information provided from this drill program, along with preliminary engineering and market studies, will be integrated into a pre-feasibility study that the Company intends to develop during 2012.

Commenting on the information provided within this press release, Robert J. Lloyd, Brazilian Resources' President and CEO, stated, "We are moving the Company forward in several areas - we are nearing completion of our first limestone mining and processing facility; we have more than doubled our reported resource and reserve profile; we have recently acquired a second limestone property, which we believe has strong potential; and we are proceeding with various corporate initiatives, including an evaluation of a much-needed service offering to farmers throughout Brazil, which could significantly complement our sales and marketing effort of lime. As we move into 2012, we firmly believe Brazilian Resources is well-positioned to provide the necessary inputs to Brazilian agriculture and enhance our value."

Construction Progress - Itiquira Project

The Itiquira Project is expected to produce crushed limestone to be marketed in the agricultural areas of central Brazil (primarily Mato Grosso State).  Crushed limestone is added to soil to adjust pH to enhance crop production. The addition of agricultural limestone has demonstrated benefits to production of the major crops in the region, including cotton, soy, corn and sugar cane. Mato Grosso is the fastest growing agricultural region in Brazil, and Brazilian Resources' Itiquira Project is strategically located to capitalize on significant freight savings over current ag-lime supply sources in the market area. The current nearest supply source to Mato Grosso State is over 400 kilometers away.   Itiquira's product netbacks are expected to provide strong gross margins based on current market prices. The Company completed preliminary engineering on the Itiquira Project in early 2011 and initiated civil works on the project in April 2011.  Through early November, civil works for the Itiquira Project are approximately 80% complete with nearly all structural foundations and major components at site or in place. Overburden pre-stripping at the open pit mine, sufficient to access an initial 150,000 metric tons of limestone, is complete, with limestone mining scheduled to begin in late November and running through mid December, resuming again in early March 2012 when the wet season ends. Internal and external power lines to the site are completed with all hook-ups to the power systems in place.

During the remainder of the year, mechanical assembly of all equipment, such as conveyor systems, secondary crushers, hopper silos for the millhouse and the bucket elevator / classifier, are expected to be installed. An underground tunnel to carry coarse crushed limestone to secondary crushers, for further screening and finishing into the hammer mill house, is expected to be completed in January 2012.

Partial commissioning of key components is slated for late November with additional start-up of all major systems planned during December. Additional structures such as buildings for support personnel have been engineered and the necessary civil works for these structures are underway.

The Company has received all necessary permits and licenses necessary to commence operations and the operating license ("LO") has been submitted to SEMA, the applicable environmental agency, for approval.

Key project management staffing is well along with the following staff positions now filled:

Director of Operations, Health and Safety Technician, Mine Engineer, Procurement Manager, Mechanical Maintenance Supervisor, Electrical Maintenance Supervisor, Laboratory Supervisor and Marketing and Sales Coordinator.

In addition, all necessary administrative, accounting and finance personnel to support the operations, sales and reporting needs for 2012 have been hired. These personnel will be located in Rondonópolis, the largest city in the region, approximately 110 km northwest of the Itiquira operation.

Sales and marketing efforts are underway to line-up orders for the fall planting season, which begins in March.

Updated PAH Technical Report

Resources and Reserves

Based on the technical report prepared by Pincock Allen & Holt Brasil and as filed on SEDAR, the Itiquira Project now contains estimated indicated mineral resources of 65.7 million metric tons (reserves included), an increase of 38.7 million metric tons or 143% above the resources estimated in the 2010 technical report prepared by TechnoMine and filed on SEDAR. The increase is based on data obtained from a 2010 drill program, which totaled 671 meters.

Proven and probable reserves in the PAH technical report are now estimated at 35.7 million tons based on a blended (high-grade and medium-grade) salable product, sufficient to sustain operations for at least 30 years at the current design rate of 1.0 million metric tons per year.

In addition, the PAH technical report estimated the Itiquira Project contains additional inferred resources of 158.3 million metric tons of which 126.0 million metric tons would be salable (a blend of high-grade and medium-grade ore). PAH also believes there is additional exploration upside in the adjacent mineral concessions owned by the Company.

Economic Assessment

Updated capital and operating costs from the 2010 Amended Feasibility Study, as filed by the Company on SEDAR, reflect additional engineering design and procurement. Capital costs are estimated as of October 2011 at US$44.5 million. Of this total amount, US$22.3 million is scheduled to be spent up to the point of commissioning the process plant, scheduled for late November 2011. Remaining capital in December 2011 and 2012 is estimated at US$21.0 million, including owner mining equipment, covered product storage, additional hammer mills, and remaining project building construction.

Average annual operating costs for the first 20 years of operation are estimated at US$14.3 million, or US$14.30 per metric ton. Cash flow analyses were completed for the Base Case production rate of 1.0 million tonnes of product per year and an Expanded Production Case of 1.5 million tonnes per year. Under the Base Case, the project yields an estimated after-tax cash flow rate of return of 74 percent and a Net Present Value (NPV) at a 10 percent discount rate of US$116.9 million, in each case at a product sale price of US$39 per metric ton FOB the processing plant. The total after-tax cash flow is US$419.4 million. The average annual after-tax cash flow under the Base Case is US$15.5 million for the first 10 years. For the Expanded Production Case, the project yields an estimated after-tax cash flow rate of return of 84 percent and a Net Present Value (NPV) at a 10 percent discount rate of US$157.2 million, in each case at a product sale price of US$39 per metric ton FOB the processing plant. The total after-tax cash flow is US$426.5 million. The average annual after-tax cash flow under the Expanded Production Case is US$22.7 million for the first 10 years.

The Company and its partner, Liberty Metals & Mining Holdings, LLC a subsidiary of Boston based Liberty Mutual Group, are presently evaluating the expansion of Itiquira to 1.5 million metric tons per year and expect to reach a decision in 2012.  The additional capital cost to expand the Project to 1.5 million metric tons per year is estimated to cost $11.3 million.

Acquisition of New Limestone Property

The Company recently entered into a definitive purchase and sale agreement with Sercor Ltd. of São Paulo to acquire a 100% interest in MINERAÇÃO JACIARA S/A ("Jaciara"). Jaciara held a 100% interest in a pre-development stage limestone property located near the town of Castanheiras in the Brazilian State of Rondônia. The property is known as the Kappa Cal Project.  For Brazilian Resources, this marks the ownership of a second limestone property in a fast-growing agricultural region. Kappa Cal encompasses approximately 2,700 hectares and has a preliminary inferred limestone resource of approximately 15 million metric tons. In exchange for a 100% interest in Jaciara, the Company issued approximately 4.2 million common shares to Sercor Ltd.  The Company closed the transaction in mid-September 2011. Based on initial information provided by the previous mineral concession owner, management is optimistic that the property will be of sufficient quality and size to merit the investment in a feasibility study.  As with Itiquira, the further development of the Kappa Cal property will be determined with the scope of a feasibility study.

Corporate Strategy and Initiatives

The agricultural sector is among the fastest growing sectors in the Brazilian economy and is the leading employer in Brazil. Management intends to focus on the agricultural industry and replicate the Itiquira model in other locations in Brazil. In addition to the potential expansion at Itiquira, and planned development of the Kappa Cal Project, the Company is evaluating similar greenfield properties, as well as existing operations. The Company's primary focus is to identify limestone properties that posses certain quality and logistical characteristics that can be economically developed.

In addition to the limestone business, the Company is evaluating the addition of certain agronomic service offerings that it can provide to farmers in Brazil. These service offerings would replicate many of the essential services farmers in North America have access to, such as soil testing, bulk blending and custom application of fertilizers. Additional information for this business opportunity will be provided to shareholders in the future.

Qualified Person

The updated technical report was prepared for Brazilian Resources by Pincock Allen & Holt under the guidance of Darrel Buffington, an employee of and Pincock Allen & Holt and is an independent Qualified Person in accordance with NI 43-101. Actual operating costs, production and economic returns may differ materially from those anticipated by the updated technical report, and depend on a variety of factors, some of which are outside the control of the Company.

About Brazilian Resources

Brazilian Resources is a U.S. company with ownership interests in agricultural mining and food irradiation industries in Brazil. Corporate offices are located in Concord, New Hampshire, USA. The Company is a reporting issuer in the Provinces of Alberta, British Columbia and Ontario, Canada.

Further information about the Company is available on SEDAR and on its website

This news release contains "forward-looking statements."  These statements include, but are not limited to, statements with respect to our exploration and development programs in Brazil, our future financial performance, our anticipated growth strategies and anticipated trends in our industry. In some cases, you can identify these statements by forward-looking words such as "expects," "plans," "will," "believes," "estimates," "potential" or "intends" and the negative of these terms and other comparable terminology.  All forward-looking statements speak only as of the date on which they are made. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions concerning future events that are difficult to predict. Therefore, actual future events or results may differ materially from these statements. We believe that the factors that could cause our actual results to differ materially from those expressed or implied by forward-looking statements in this news release include the following: delays or changes in plans with respect to exploration or development projects or capital expenditures; the uncertainty of reserve and resource estimates; risks inherent in operating in foreign jurisdictions; risks associated with establishing new mining operations; and fluctuations in the price of and demand for limestone.  These risks and uncertainties, as well as other risks of which we are not aware or which we currently do not believe to be material, may cause our actual future results, performance or achievements to be materially different than those expressed in our forward-looking statements. We caution you not to place undue reliance on these forward-looking statements. We do not undertake any obligation to make any revisions to these forward-looking statements to reflect events or circumstances after the date of this news release or to reflect the occurrence of unanticipated events, except as required by law.

SOURCE Brazilian Resources, Inc.

For further information:

Robert J. Lloyd
President and CEO
Office: 603-224-4800
Bob Zwerneman
Vice President Corporate Development and Investor Relations
Office: 603-224-4800

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Brazilian Resources, Inc.

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