The Aurizona project totals approximately 80,000 ha and is divided into two main areas:
- Aurizona Main - This area contains the Piaba and Tatajuba deposits and over 10 satellite targets, which collectively form a gold camp. It covers an area of approximately 20,000 ha and is limited by the outer limits of the Company's fully permitted mining license and the Tatajuba exploration permit (Figs. 3, 4a & 4b).
- Aurizona Regional. The Aurizona Regional project consists of all Company exploration permits located outside of the Aurizona Main area and covers an area of 60,000 ha. There are over 50 hard rock (primary) gold garimpos located within the Aurizona Regional permits (Fig. 3).
| PROVEN | PROBABLE | PROVEN & PROBABLE | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Tonnes Kt | Grade g/t Au | Contained Oz | Tonnes Kt | Grade g/t Au | Contained Oz | Tonnes Kt | Grade g/t Au | Contained Oz | |
| Aurizona: Piaba | 1,509 | 1.44 | 70,000 | 15,609 | 1.31 | 659,000 | 17,119 | 1.32 | 729,000 |
Measured and Indicated Resources (inclusive of proven and probable reserves)
| MEASURED | INDICATED | MEASURED & INDICATED | |||||||
|---|---|---|---|---|---|---|---|---|---|
| Tonnes Kt | Grade g/t Au | Contained Oz | Tonnes Kt | Grade g/t Au | Contained Oz | Tonnes Kt | Grade g/t Au | Contained Oz | |
| Aurizona: | |||||||||
| Piaba | 1,616 | 1.41 | 73,000 | 17,999 | 1.33 | 771,000 | 19,615 | 1.34 | 844,000 |
| Tatajuba | - | 0.00 | - | 1,554 | 1.30 | 65,000 | 1,554 | 1.30 | 65,000 |
| Total | 1,616 | 1.41 | 73,000 | 19,553 | 1.33 | 836,000 | 21,169 | 1.33 | 909,000 |
Inferred Resources
| INFERRED | |||
|---|---|---|---|
| Aurizona: | Tonnes Kt | Grade g/t Au | Contained Oz |
| Piaba | 9,099 | 1.19 | 347,000 |
| Tatajuba | 1,859 | 0.94 | 56,000 |
| Total | 10,958 | 1.14 | 403,000 |
Notes
- All Mineral Reserves and Mineral Resources have been calculated in accordance with the standards of the Canadian Institute of Mining, Metallurgy and Petroleum and National Instrument 43-101.
- Mineral Resources which are not Mineral Reserves, do not have demonstrated economic viability.
- Mineral Reserves are fully included in the Mineral Resources.
- Reserves are reported as of June 23, 2009.
- Resources are reported as of January 15, 2009.
- The mineral reserve estimates set out in the table above have been prepared by Bret C. Swanson, MAusIMM, of SRK, who is a qualified person under NI 43-101. The mineral reserves are classified as proven and probable and are based on the CIM Standards.
- Reserves on a gold price of $750 per ounce.
- Resources based on a gold price of $650 per ounce.
- Mineral reserves are not diluted (further to dilution already incorporated into the mineral resource model) and assume selectivity in mining. Full mining recovery is assumed.
- The mineral resource estimates set out in the table above have been prepared by Leah Mach, C.P.G., M.Sc., Principal Resource Geologist of SRK, who is a qualified person under NI 43-101. The mineral resources are classified as measured, indicated and inferred and are based on the CIM Standards.
- Mine reserves are diluted along mineralized boundary to block model SMU of 10mx10mx3m;
- An internal CoG of 0.35g/tAu was used on Saprolite Rock within the pit design; An internal CoG of 0.37g/t-Au was used on Transition Rock within the pit design; An internal CoG of 0.41g/t-Au was used on Fresh Rock within the pit design.
- Internal CoG determination includes metallurgical recoveries of 95% in Saprolite, 93% in Transition, and 91% in Fresh ore.
- In situ Au ounces do not include metallurgical recovery losses.
- Saprolite is rock between topography and an interpreted floor surface marking the change from highly to moderately weathered rock; Transition is rock between an (upper) interpreted Saprolite floor surface and an interpreted moderately weathered rock floor surface; and Fresh rock is rock below an (upper) interpreted Transition floor surface.
- Based on 0.3 grams per tonne cut-off grade.
For further details regarding the Aurizona Project, readers should refer to the Technical Report for Mineração Aurizona S.A. filed by the Company on July 4, 2008 available at www.sedar.com. Mineral Resources which are not Mineral Reserves, do not have demonstrated economic viability.
In the 1950's a number of companies conducted exploration in the region.
From 1978 to 1988 CESBRA, a wholly-owned subsidiary of Brascan, carried out exploration to evaluate alluvial gold occurrences and started trial mining operations with a pilot gravity plant.
More recent exploration activity was initiated in the early 1990's by UNAMGEN (a subsidiary of Gencor, South Africa) via a joint venture with CESBRA. From 1991 to 1996 a comprehensive exploration program was conducted involving regional airborne surveys (magnetic & radiometrics), soil sampling, auger drilling, pit mapping and panel sampling in addition to ground geophysical surveying. During this time the oxide zone at the Piaba Deposit was systematically drill tested via diamond and to a lesser extent RC methods. The Tatajuba Deposit was also discovered at this time. The JV exploration strategy centered on the discovery and delineation of bulk-tonnage low-grade gold deposits amenable to open-pit mining methods.
In 1996, Gencor sold its gold assets in Brazil, including Unamgen, to Eldorado Gold Corp. (Eldorado). In 1997, Eldorado completed a work program designed to increase the open pittable reserves of the Piaba Deposit. Limited drilling was also carried out at the satellite targets in Aurizona Main and at some of the garimpos in the Aurizona Regional project area. Eldorado's evaluation lasted less than a year due to the deterioration of market conditions for junior mining stocks at that time. Apart from minor works necessary to maintain title, no further systematic exploration or development activity was carried out at Aurizona until Luna Gold acquired 100% of Mineração Aurizona S.A. from both venture partners in January 2007.
- Luna obtaining all regulatory consents, approvals and authorizations, including acceptance of the proposed transactions by the TSX Venture Exchange;
- Luna completing a private placement of common shares or other securities for net proceeds of a minimum of US$ 1.5 million; and
- Eldorado and Brascan releasing any claims against each other and against Aurizona.
- US$500,000 on closing, US$1 million on the first anniversary of the closing (Jan 2008) and US$1.5 million on the second anniversary of the closing (Jan 2009);
- Each party had the option to take either 3 million shares of Luna on Closing or US$670,000 on the second anniversary of the Closing;
- US$1 million is payable on the first, second and third anniversary of the Commencement of Commercial Production;
- Luna paid about US$225,000 to Brascan on Closing for accrued operating expenses; and
- Luna assumed a fine of approx US$1.2 million ($21,000/month for 5 years) payable to the DNPM (Departmento Nacional de Producao Mineral) for past due fees relating to exploration rights.
On July 30, 2009, Luna reported it made the final pre-production payments, totalling US$2,170,000 to Brascan and Eldorado this week.
GOLD PURCHASE AGREEMENT WITH SANDSTORM RESOURCES LTD
On May 15, 2009, the Company entered into a definitive agreement with Sandstorm under which the Company's operating subsidiary Mineração Aurizona S.A. agreed to sell 17% of future gold production from the Aurizona Project to Sandstorm in exchange for an upfront cash payment of $17.8 million. Additionally, Sandstorm will make ongoing per-ounce payments equal to the lesser of $400 and the prevailing spot gold market price. The per ounce price of $400 is subject to an increase of 1% per annum beginning on the 3rd anniversary of the date that the Aurizona Project begins commercial production. The upfront payment will be used to fund construction and development of the Piaba open pit mine and for general and administrative costs associated therewith.