Volta Grande Project Highlights
Focus on fast-track development to production
Positive Feasibility Study completed in March 2015
Currently in advanced stage of permitting
Long-term mineral growth potential
Proven & Probable Mineral Reserves of 3.8 million oz at 1.02 g/t Au
Only small area of property drilled
Extensive land package on greenstone belt
Mining concessions cover over 120 km of the greenstone belt
Proven management team
Track-record of successfully permitting, building and operating mines in Brazil
Strong mining country
Gold project located in Pará State, the 2
nd most active mining state in Brazil
Volta Grande Feasibility Study Highlights
Production
Average LOM annual gold production of 205,000 oz over 17.2 year mine life
First 10 years: average annual gold production of 268,000 oz
Proven & Probable Mineral Reserves of 3.8 million oz at 1.02 g/t Au
Economics
Pre-Tax IRR of 36%; Post-Tax IRR of 26% ($1,200 / oz Au)
Pre-Tax NPV of $942 million; Post-Tax NPV of $665 million (5% discount rate)
Operating Costs
Average cash operating costs of $618 / oz Au
All-in sustaining cash costs of $779 / oz Au
Initial Capital Costs
Initial capital costs of $298 million including pre-production costs and taxes
Strip Ratio
Strip ratio of 4.3:1 life of mine
Metallurgy
Average 93% gold recovery over life of mine
Project Location, Infrastructure & History
The 100%-owned Volta Grande Project is located approximately 65 km
south-east of the main city of Altamira, in the northern region of Pará
State in Brazil. Altamira is a major regional centre with a population
of approximately 150,000 and is serviced by a local airport and the
Trans-Amazonian Highway. Altamira acts as the service center for many
large industrial projects in the region. The Brazilian Government is
currently building the “Belo Monte Dam” located approximately 20 km
upstream from the Volta Grande Project, which will be the world’s third
largest hydroelectric dam in the world.
Access to the
Volta Grande mine site from the city of Altamira is by an existing 65 km
road that is paved for the first 30 km. The remaining 35 km of access
road will be upgraded and paved during the mine operation. The project
can also be accessed by river.
Belo Sun’s land
package totals 160,407 hectare (1,604.07 sq. km) and covers over 120
kilometers of strike length on the “Tres Palmeiras" greenstone belt.
This geological occurrence is elaborated on below.
Many parts of the
Volta Grande property were mined by Garimpeiros (artisanal miners) using
both open pit and underground mining methods from the 1960’s to the
late 1990’s, where average grade of material extracted from numerous
small alluvial gold deposits are reported to have been up to 3 oz/t Au
(based on anecdotal reports from local garimpeiros). Grab samples from
80 to 200 meters shafts used by the Garimpeiros have assayed as high as
475 g/t Au. Widespread gold mineralization was identified in the 1990s
by TVX Gold (now part of Kinross) and Battle Mountain Exploration (now
part of Newmont). Belo Sun (formerly Verena Minerals) took control of
the Volta Grande Project in 2003.
Feasibility Study Results (March 2015)
Highlights from the Feasibility Study (US$):
Annual gold production of 205,000 oz averaged over a 17.2 year mine life
Post-tax Internal Rate of Return of 26% using a gold price of $1,200/oz
Post-tax Net Present Value of $665 million at a 5% discount rate
Initial capital cost of $298 million, including pre-production costs and taxes
Average cash operating costs of $618/oz Au and all-in sustaining costs of $779/oz Au
Proven and Probable mineral reserves of 3.8 million oz Au at 1.02 g/t Au
Summary of Volta Grande Economic Results by Gold Price
|
|
High Case
|
Base Case
|
Low Case
|
|
Gold Price (per oz)
|
$1,300
|
$1,200
|
$1,100
|
|
|
|
Pre-Tax NPV (5%)
|
$1,171 million
|
$942 million
|
$712 million
|
|
Pre-Tax IRR
|
43%
|
36%
|
29%
|
|
|
|
Post-Tax NPV (5%)
|
$855 million
|
$665 million
|
$472 million
|
|
Post-Tax IRR
|
32%
|
26%
|
20%
|
The
Feasibility Study considers open pit mining using a 100% owner operated
equipment fleet including trucks, loaders and drills. The mine has been
designed to deliver an initial 3.5 million tonnes per year (10,000
tonnes per day) of mill feed and expand to 7 million tonnes per year
(20,000 tonnes per day) reaching full production in Year 3. The
Feasibility Study is based on a mine that will extract ore over a 17.2
year period not including eight months of pre-production stripping. The
Feasibility Study optimizes the mine plan for the first 10 years with a
delivered head grade of 1.30 g/t Au. Material from the last three
months of pre-production stripping will be used to commission the
process plant.
Simplified Process Flow Diagram
Aerial View - Mine Infrastructure Location
The average strip ratio for the life of the mine is estimated at
4.3:1.
Open pit bench heights of 10 meters will be mined and ore hauled with
136-tonne haul trucks and matching loading equipment. Best practice
grade control drilling will be done with reverse circulation drilling
and rock sampling on mine benches prior to blasting. This provides the
greatest flexibility for grade control during operations while
maintaining reasonable mine operating costs and production capability.
During the mining operation a stockpile will be maintained adjacent
to the primary crushing plant to be used as supplemental feed as
required to meet production targets, weather events and as mill feed in
the later years of the operation. Waste rock will be hauled to
dedicated waste management facilities near the open pits.
Extensive feasibility level test work was completed by SGS, using
representative run-of-mine composites, that confirmed the material from
the Volta Grande mineral deposits is amenable to a conventional crush,
grind, gravity concentration, leach and carbon-in-pulp (CIP) flow sheet.
Please see the full technical report in the “Technical Reports”
section of the Belo Sun website, or under Belo Sun’s profile on SEDAR at
www.sedar.com for more details.
Mineral Resources and Mineral Reserves (March 2015)
The Volta Grande Project is subdivided in 2 areas - North Block and
South Block. The North Block includes four zones; Ouro Verde, Junction,
Grota Seca and Greia; the South Block area is located approximately 10
km south. An updated mineral resource and reserve estimate was prepared
by SRK in conjunction with the Feasibility Study during the first
quarter of 2015 for selected zones in the North Block; these are
detailed below. The latest mineral resource estimate for the South Block
was prepared by SRK in September 2013.
Volta Grande Mineral Resources (Ouro Verde, Junction, Grota Seca and Greia Zones)
|
Classification
|
Tonnes (t)
|
Gold Grade (g/t)
|
Contained Gold (oz)
|
|
Measured
|
44,080,000
|
1.06
|
1,512,000
|
|
Indicated
|
112,450,000
|
0.95
|
3,442,000
|
|
Measured & Indicated
|
156,520,000
|
0.99
|
4,954,000 oz
|
|
Inferred
|
39,690,000
|
0.90
|
1,148,000
|
The
mineral reserves for the Volta Grande Project are based on the
conversion of Measured and Indicated mineral resources within the
current Feasibility Study mine plan. Measured mineral resources are
converted directly to Proven mineral reserves and Indicated mineral
resources to Probable reserves.
Volta Grande Mineral Reserves (Ouro Verde, Junction and Grota Seca Zones)
|
Classification
|
Tonnes (t)
|
Gold Grade (g/t)
|
Contained Gold (oz)
|
|
Proven
|
41,757,000
|
1.07
|
1,442,000
|
|
Probable
|
74,212,000
|
0.98
|
2,346,000
|
|
Proven + Probable
|
115,969,000
|
1.02
|
3,788,000
|
Notes:This mineral reserve estimate
is as of March 25, 2015 and is based on the new mineral resource
estimate dated March 2015. The mineral reserve calculation was
completed under the supervision of Gordon Zurowski, P.Eng of AGP Mining
Consultants Inc, who is a Qualified Person as defined under NI 43-101.
Mineral reserves are stated within the final design pit based on a $1020
gold price pit shell with a $1,200 gold price for revenue. The cutoff
grade was 0.37 g/t for Ouro Verde and 0.40 g/t for Grota Seca. The
mining cost averaged $10.90/tonne milled, processing was $7.25/tonne
milled and G&A was $0.84/tonne milled. The process recovery
averaged 93%. The exchange rate assumption applied was R$3.10 equal to
US$1.00 The Feasibility Study only considers the Volta Grande open pit
mineralized zones. The Feasibility Study does not include the South
Block. Mineral resources that were part of the March 2015 mineral
resource associated with South Block and underground mineral resources
were left outside of the scope of the Feasibility Study.
Mineral Resources and Reserves Area Drill Collar Locations
Property Geology
Regional Geology
The Volta Grande Project area is
situated along the northern boundary of the Carajas-Iricoumé Block of
the Eastern Amazonian Craton. In this part of the Amazonian Craton, the
regional structures have a northwesterly trend. In the area west of
Belém, the southern segment of the Amazonian Craton is underlain by
east-northeasttrending Phanerozoic cover rocks of the Amazon Basin.
The Volta Grande Project area is located in the western portion of a
west-northwest trending Três Palmeiras greenstone belt, which surrounds
the Xingú Complex in central State of Pará, of the Brazilian Shield. The
greenstone belt is 3 km to 10 km wide and extends to about 70 km along
strike. It comprises Upper Proterozoic metavolcanic and metasedimentary
rocks enveloping linear granodioritic to dioritic domes, interpreted to
be syntectonic plutons of Proterozoic age.
The Xingú Complex comprises basement
granitic gneisses, and all rocks in the area exhibit strong foliation
with a number of mylonitic zones and a steeply dipping attitude to the
south. Other structures in the area include northeast, north-northeast,
north-northwest, and east trending faults.
Rocks of the Xingú Complex are
predominantly Archean gneisses originating from tonalite, trondjemite,
and granodiorite. In places, they may be migmatitic. The Xingú Complex
is subdivided into different groups, including the Igarapé Salobo Group,
Igarapé Pojuca Group, Igarapé Bahia Group, Grão Pará Group, Buritirama
Group, and Rio Fresco Group. All of the above Archean-age rocks are
intruded by anorogenic granitic bodies, which have an approximate age of
1.86 Ga.
Local Geology
The Volta Grande property is situated along a major ductile
deformation zone within the west-northwest trending Três Palmeiras
greenstone belt. It is underlain by west northwest trending and steeply
south dipping gneisses of metasedimentary and/or metavolcanic origin and
syntectonic diorite.
Occasional chert horizons (chemical sediments) and banded iron
formation (BIF) are also present within the metasedimentary sequence. A
number of anorogenic granitic plutons are also present along the
southern contact of the greenstone belt.
In the Volta Grande area, the Três Palmeiras greenstone belt is
interpreted to consist of a basal portion of predominantly
metasedimentary rocks in the southern part of the belt, mafic volcanic
rocks in the northern part of the belt, and synvolcanic intrusions. The
sedimentary assemblage includes thin units of chemical sediments
(cherts, graphitic sediments and lean oxide-facies iron formation),
which serve as marker horizons in the interpretation of the local
geology. Both assemblages commonly exhibit strong penetrative fabric
(foliation and lineation) as well as metamorphic banding.
In places, where the rock has undergone migmatization, mylonitic
zones with associated silicification are commonly observed. Surficial
alteration is present in an extensive layer of red saprolite, which
covers the entire property, including topographic highs and lows. In
general, the subsurface geology can be interpreted from the subtle color
differences of the overlying saprolitic material, as follows:
▪Dark brick red to brown color resulting from the weathering of underlying metavolcanic and metasedimentary rocks.
▪Red to brown color resulting from the weathering of underlying granodioritic rocks.
▪Pale brown to beige color resulting from the weathering of underlying gneisses of the Xingú Complex.
In the central part of the North Block, a north-northwest trending
lineament separates the southeastern mineralized zones of the Main Area
from the northwestern ones at Ouro Verde. This lineament is parallel to
other regional lineaments with similar orientation. Field observations
indicate a complicated contact relationship between bedrock mineralized
area and the overlying saprolitic material.
At Grota Sêca, near the former garimpeiro workings, almost fresh
diorite is in sharp contact with saprolitic material, which is at least 8
m thick. This feature could indicates that the saprolite is not made up
of regular regolithic material developed on top of bedrock, and is
transported by faulting parallel to the major shear zone which hosts the
gold mineralization.
There is a number of north-northwest trending regional structures
present in the area. One of these is parallel to the segment of the
Xingú River. Other structures with similar orientation are present in
the area west of Ouro Verde, one of which cuts a northeast trending
structure. This area has been explored by soil and overburden (auger)
sampling, with positive results, but has not yet been tested by
drilling.
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