Mara Rosa

MARA ROSA GOLD DEPOSIT (Pre-Feasibility Study March 2017) Resources*

* QP Keith Whitehouse Australian Exploration Field Services 

Introduction

The Mara Rosa Project is a greenstone belt, shear hosted meso-thermal gold mineralized system of Neo-Proterozoic age located near the village of Mara Rosa in the state of Goias.

The project encompasses aproximately 60,000 hectares of exploration permits and 2,600 hectares of mining permits. Local infrastructure is excellent, with nearby access to Brazil's main North-South highway and close proximity to the national capital of Brasilia (320 km) and the state capital, Goiania (350 km). The main accumulation of gold within the Mara Rosa project is known as the Posse Deposit, which occurs in two main zones, Posse North and Posse South.

History

The Posse Deposit was discovered in 1982 by a predecessor of BHPBilliton, by drilling and testing a panned gold-in-soil anomaly in an area mined actively by garimpeiros. BHPBilliton sank a shaft and undertook small scale mining of the oxide ore before forming a joint venture with Western Mining Ltd. in 1988. In 1992, the property was sold to Western Mining. Western Mining operated an open pit from 1992 to 1995. In total, it is estimated that 80,000 oz. of gold was extracted from Posse. Of this amount, approximately 31,000 oz. was extracted by Western Mining during this period, using heap leach and a 600t/d CIL plant. In 1998 Western Mining sold the deposit to Metallica Brasil Ltda. for US $1.5 million. Metallica conducted small scale drilling, compiled data and searched for extensions to the mineralization by mapping, soil sampling and ground geophysics.

Figure 1: Aerial View of the Posse Deposit showing Posse North and Posse South pits and other artifacts from previous mining activity. Photo is oriented North.

Amarillo purchased the Posse Deposit from Metallica in October 2003 for US $450,000. The project carries a 1% NSR to BHP/Billiton, and a 1% NSR to Franco Nevada. Changes in management, the shareholder base and the purchase of the Mara Rosa property triggered an RTO (Reverse Take Over), from which the Company emerged in November 2005. Upon completing the RTO process, the Company immediately commenced drilling on the Posse Deposit.

Work Completed by Amarillo

To date, there have been over 283 exploration holes drilled, totaling >33,000 meters in the area around the Posse Deposit.

Figure 2: Oblique view of the Posse Deposit. It depicts the traces of the drill holes and the pits, and is coloured based on gold assays. The warmer the colour, the higher the grade.

The Company commissioned an NI 43-101 - compliant Pre Feasibility Study led by Coffey Mining International. The supervising Qualified person is NI 43-101 accredited Norman Lock. It was  completed in November 2011. The Posse Deposit Reserve, quoted below, was calculated using a 0.5 Au/t cut-off. 70% of the tonnage lies within 200 metres of surface.

Proven Mineral Reserve 0.5 g Au/t cut-off

• Tonnes ('000): 5,361   Average Grade: 1.87 g/t, Ounces Au: 339,600

Probable Mineral Reserve 0.5 g Au/t cut-off

• Tonnes ('000): 11,739   Average Grade: 1.60 g/t, Ounces Au: 606,600

Total Proven and Probable Mineral Reserve

• Tonnes ('000): 17,117   Average Grade: 1.72 g/t, Ounces 945,200

Inferred Mineral Reserve

• Tonnes ('000): 3,630  Average Grade: 1.34 g/t, OUnces 156,400

Exploration Plans and Rationale

The Company believes that there is good potential for the discovery of additional mineralization within the Mara Rosa project. Such discovery can come from two possible sources: Posse Deposit look-alikes along the same structure, and new gold mineralization away from Posse.

The Posse Deposit is remarkable in that it occurs within a 50 km regional structure that can be traced in the airborne geophysical data (radiometric K channel). This structure has also been mapped by soil sampling for over 10 km as demonstrated by the coincident >0.2 g/t Au anomaly. Mapping along this structure suggests that a friable quartz mica (muscovite and sericite) schist is the likely source of the radiometric anomaly. However, the Posse Deposit is an unremarkable feature along this structure; there are few clues in the geochemical and geophysical data set that would highlight it. 

Figure 3: This image is a coloured grid of the soil data. The red/brown colours represent gold-in-soil equal to or greater than 0.2g/t. The green-yellow colours represent gold at lower values. The image is oriented North-South. The location of the Posse Deposit is indicated.

Figure 4: In 2005, the Goias State government sponsored a 400m line spaced geophysical survey over the Mara Rosa area.

The colour in the image is based of the gridded K-channel radiometric dat. The Posse Deposit is shown along with the road network and villages. There is a linear K-channel (red colour) anomaly that is coincident with the soil anomaly in Figure 3.The Company’s working hypothesis regarding the Posse Deposit is as follows. The Posse Deposit is hosted in regional thrust that probably acted as one of the primary dewatering conduits during the Neo-Proterozoic Brazilino orogeny. The geophysical, geological and geochemical data mentioned above demonstrate that the Posse Deposit occurs within a 50 km long structural zone with potassium alteration and lower order gold- copper-molybdenum mineralization. Posse may demonstrate economically interesting accumulation of gold to either some sort of structural accommodation and/or a chemical contrast in the hanging and footwall rocks. The Posse Deposit has a hanging wall of grey gneiss and the foot wall of amphibolites, “greenstone”, and it is speculated that the rheological contrast between the two rock types captured the regional thrust (movement West to East) for a 2 km segment. It is also possible that the chemical contrast between these acid hanging wall and basic foot wall may have aided in focusing the mineralizing fluids. Observations in the core suggest that an earlier potassic event with chalcopyrite, molybdenum, quartz veining, biotite and K-feldspar was followed by a later auriferous phyllic event with pyrite, Fe-telluride, and sericite. The gold occurs free as well as associated with the telluride and pyrite. The Company will use this model to create drill targets elsewhere along the hosting structure. Flexures and areas where the magnetics suggest that amphibolites are in contact with the structure will be target zones. Ground base resistivity will be used to map the third dimension of the structure. Again flexures will be targeted in conductive zones with high induced potential (reflecting pyrite concentration). In 2006 Amarillo also completed a regional stream sediment sampling program using the BLEG (Bulk Leach Extractable Gold) technique. This program highlighted some anomalous drainages that had not been recognized by previous workers using other techniques.