Mineração Aurizona S.A. (MASA) is the wholly owned Brazilian business subsidiary of Luna Gold Corp. that operates all mining, project development and exploration activities in the state of Maranhão, Brazil.
The Aurizona Gold Mine is located within the São Luis Craton and is accessible year round by roads from the capital cities of Belém (400 km), Pará and Sao Luis (320 km), Maranhão. The mine and surrounding communities are also accessible by a one hour air charter from both São Luis and Belém.
Processing of stockpiled saprolite and transitional ore was completed at the end of August 2015 and with the depletion of the stockpiled ore, the processing plant was placed on care and maintenance. Since then the Company has been focused on redevelopment of the Aurizona Project with the objective of restarting operations. Concurrent with decommissioning and repairs to the processing plant, the Company completed 15,142 metres of oriented core drilling, 3,264 metres of reverse circulation (“RC”) drilling, re-logging of historical core and extensive metallurgical work to gain a better understanding of the ore body. The program also included an oriented core structural geological analysis of the mineral resource to allow the Company to better understand the structural controls and distribution of gold within the ore body. This extensive technical work resulted in a refined understanding of the ore body and a new 4D structural geology model, which was used to create a new mine plan for the Aurizona Project. During Q3 2016, the Company also restated its reserve and resource models for the project. The combined Measured and Indicated Mineral Resources are now estimated at 1.6 million ounces of gold (inclusive of reserves) contained in 29.9 million tonnes at a grade of 1.67 grams per tonne (“g/t”) of gold. Proven and Probable Mineral Reserves are estimated at 969,000 ounces of gold contained in 18.6 million tonnes of ore at a diluted grade of 1.62 g/t gold.
The exploration and technical work completed at Aurizona resulted in a significant reclassification of mineralized material in the reserves, which is now estimated to contain 14% saprolite, 29% hard saprolite and transition rock, and 57% fresh rock. The re-engineered mine plan for Aurizona includes an entirely new crushing and grinding circuit that will allow all known types of mineral bearing rock at Aurizona to be processed through the Company’s gold recovery plant. Processing capacity will also be increased from 5,500 tonnes per day (“tpd”) to 8,000 tpd. All major mine elements are already in place, including a tailings facility and waste dumps, a dedicated power line, camp offices and accommodations, water, roads and communications. While the majority of the back-end of the processing plant is fit for use, the new mine plan requires upgrades to the power substation, a new mine fleet, and some upgrades to existing infrastructure, all of which is captured in the $146 million capital cost estimate. The Company is also in the process of modifying its mining permit to allow for the increased throughput. The Company expects to finalize a feasibility study for the project around the end of Q1 2017 followed by an 18-month construction period, with the objective of restarting operations in late 2018.
While the Company is focused on restarting operations at the Aurizona Project, management believes in Aurizona’s exploration upside and intends to undertake both surface exploration and drilling, concurrent with construction and production. The current reserve and resource model for Aurizona outlines a 6.5-year mine life. The Company believes the mine life can be extended with exploration success, and is designing a drill program to test high-priority drill targets in the brownfields exploration properties surrounding the Aurizona Project. The drill program is expected to start in Q2 2017. The current mineral reserves are contained within the Piaba and Boa Esperanca deposits, both of which remain open along strike and to depth. The Piaba West target has the potential to extend the deposit 400 metres to the southwest. The Tatajuba target is situated on the same structure (also known as the Piaba trend) and represents a potential four kilometer extension along strike from the Piaba West. The Company has an application underway to convert Tatajuba to an exploitation permit with the objective of expediting exploration of this promising target.
The brownfields exploration potential at Aurizona includes more than 10 drill-ready near-mine targets that the Company intends to prioritize with the intention of extending the mine life. In addition, surface mapping and sampling and limited drilling has identified more than 50 kilometres of cumulative strike of structures with anomalous to high-grade soil and rock geochemistry, which provide exploration opportunities longer term.