Mara Rosa

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.

Mineral Resource Estimate

A Mineral Resource can only be declared for material that has the potential for economic extraction at some point in the reasonable future. Mineral Resources are reported at a cut-off grade that meets this criterion and do not include material that have no reasonable potential to be mined and processed.

In the economic model of the Posse Deposit, the lowest grade of mineable ore is 0.37 g/t gold. Consequently, the cut-off grade for the Mineral Resource has been set at 0.35 g/t. The Mineral Resource Estimate includes the Mineral Reserves (see below).

May 2020 Mineral Resource Estimate

Category

Tonnes (millions)

Grade (g/t gold)

Contained gold (000 ounces)

Measured

14

1.2

510

Indicated

19

1.1

640

Total M&I

32

1.1

1,200

Inferred

0.1

0.6

1.7

Note: *A gold price of $1,500/oz is assumed, Cut-off grade of 0.35 g/t used, Reported to two significant figures and columns may not sum due to rounding

Mineral Reserve Estimate

A Mineral Reserve is that part of the Measured and/or Indicated Resources which, after the application of all relevant economic, legal and technical factors, results in an estimated tonnage and grade which is the basis of an economically viable project.

SRK estimated Posse’s Mineral Reserves based on guidelines set out by the Canadian Institute of Mining Metallurgy and Petroleum. SRK identified the economic portion of the Measured and Indicated Resources as 23.8 million dry tonnes grading 1.18 g/t gold.

 

May 2020 Mineral Reserve Estimate

 

Category

Diluted
dry tonnes

Diluted grade

Contained gold metal

Estimated gold recovery

Recoverable gold metal

 

(millions)

(g/t gold)

(000 ounces)

(%)

(000 ounces)

Proven

11.8

1.20

456

89.9

410

Probable

12.0

1.16

446

89.8

401

Total

23.8

1.18

902

89.9

811

Note: *A gold price of US$1,400/oz is assumed, An exchange rate of R$4.20 to US$1.00 is assumed, Mineral reserves are based on measured and indicated mineral resources only, Mineral reserves above an economic cut-off grade of 0.37 g/t gold,Columns may not sum due to rounding


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.

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.

Aerial View of the Posse Deposit
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.

Major Permitting Milestones

  • Public hearing held in 2016 demonstrated overwhelming community support
  • The main Preliminary License (LP) granted in May 2016
• Public hearing held in 2016

 

STEP 1
APPROVED
PRELIMINARY LICENSE (LP)

  • Most important part of the permitting process
  • Entails environmental baseline studies, social and environmental approval with public hearings
  • Awarded by the EPA and the Judicial Ministry

STEP 2
IN PROGRESS
INSTALLATION LICENSE (LI)

  • Provides authorization to initiate construction
  • Expect to apply after feasibility study in late 2019

STEP 3
FINAL INSPECTION
OPERATION LICENSE (LO)

  • Granted after commissioning
  • Requires inspection of the constructed mine and plant to ensure compliance with codes and provisions of LP, LI