Brazilian focussed gold developer Big River Gold – formerly Crusader Resources – is now freed up to start proving up its exciting Borborema gold project after completing a capital raise of $4.11m and recommencing trading on the ASX.
Chairman Stephen Copulos said: “The Entitlement Issue was well received by shareholders and other investors with the funds raised in recognition of the potential of the Borborema gold project.”
“These funds will demonstrate to the market the company’s financial capacity to meet the costs of completing the bankable feasibility study and ongoing working capital, enabling its reinstatement to trade on the ASX.”
Big River Gold has thrown over 95,000 metres of drilling at the Borborema project since it purchased the property outright in August 2010 and it has since grown a JORC-compliant mineral resource of 68.6 million tonnes grading 1.1g/t gold for 2.43 million ounces.
An ore reserve was also optimised from the mineral resource, with 42.4 million tonnes at 1.18g/t gold currently estimated for an impressive 1.6 million ounces.
The company produced an optimisation study for Borborema in February 2018, which outlined a post-tax net profit value of USD$118m and an internal rate of return of 31% with free cash flows of USD$243m over an initial mine life of 10 years.
Upfront capital costs were estimated at USD$93m and the operation had a healthy all-in sustaining cost of just over USD$900 per gold ounce that produced good margins, based on a forecast gold price of USD$1,300 per ounce.
The study proposed a conventional 2 million tonne per annum capacity carbon-in-leach plant, spitting out about 700,000 gold ounces over the decade long initial mine life, at enviable gold recoveries of 93%.
In March this year, Big River Gold appointed well-respected mining industry veteran Andrew Richards as Executive Director and also delisted from AIM, with the resignation of all UK Directors.
Mr Richards has worked extensively in gold, base metals, rare earths and industrial metals worldwide and will now steer the day to day operations for Borborema, as Big River lines up its bankable feasibility studies for the exciting project.
During May, the company completed the sale of its Juruena-Novo Astro gold projects to Meteoric Resources for $3m in cash and scrip to entirely focus its efforts on the core Borborema project.
Interestingly, the 50 million Meteoric shares paid to Big River at 1 cent each in the deal, have since more than doubled in value.
Speaking about his recent appointment and planned direction for Big River Gold, Mr Richards said: “2019 has seen a fresh start for the company with a change in management and a reinvigorated focus on the large Borborema gold project.”
“With the recent sale of non-core assets and fund raising completed, Big River’s finances and cost structures have improved and management has been freed-up to accelerate the development of Borborema.”
Big River is planning to significantly reduce capital costs for the project and optimise the existing mineral resources by targeting near-surface, higher-grade gold zones that will potentially lead to a shallower open pit operation and a reduction of the stripping ratio.
This should have the effect of increasing the gold grades through the mill and potentially improving cash flows in the critical early years of mining.
The company can then pump some of this cash back into exploration at Borborema to potentially extend its tenancy in Brazil.
Big River believes that Brazil is vastly underexplored for gold and that Borborema in particular, has plenty of blue-sky upside.
The project consists of three mining leases covering a total area of 29 square kilometres including freehold title over the main prospect area of interest, with two permits already granted to allow mining to commence.
Borborema benefits from a favourable taxation regime, existing on-site facilities and excellent infrastructure such as buildings, grid power, water, sealed roads and is close to major cities and regional centres in this area of Brazil.
The gold deposit area is located in a very prospective looking region of the country with a semi-arid climate and not in the Amazonian jungles, which means it benefits from year-round access and superb infrastructure as a result.
While it feels that the Borborema gold project has been around for a while now, that understates the quality of the resource that Big River has developed on-site since acquiring it in 2010.
With a singular focus on Borborema and money in the tin, it appears that the company now has its house in order as it aims to complete its bankable feasibility study for the project later this year.
