The Cachoeira project consists of three mining licenses and one exploration permit totaling approximately 3,700 ha and is divided into two main target areas:
- Tucano - Tucano is located south of Cachoeira village (Fig. 3) and is the highest priority target at Cachoeira. It consists of a series of multiple stacked gold mineralized zones extending over a strike length of 400m hosted in a volcanic sequence. It is currently the site of a small garimpo (artisanal mine) operation.
- Cachoeira North - The Cachoeira North area consists of Luna's mining permits located north of the federal highway BR-316 (Fig. 3). Two sub-parallel N-S trending mineralized trends host numerous gold targets including Coruja and Arara, drilled by Luna in 2008, and which returned high gold grades. There are over 20 hard rock (primary) gold garimpos located in the Cachoeira North area.
Garimpeiro miners have extracted gold from Cachoeira intermittently since the late 19th Century. At least two major periods of garimpeiro activity occurred, the first at the start of the 20th Century, and the latter in the 1980's driven by the high gold price at that time. High-grade quartz veins continue to be mined at Tucano.
The project has had a long history of mineral exploration, summarized below.
Mineração Brazil Canada S/A (Brascan) conducted an exploration program consisting of trenching, pitting and diamond drilling at Cachoeira in the 1940's. This program discovered the high-grade quartz veins at Tucano.
CIDAPAR acquired the rights to Cachoeira in 1973 and completed a short drill program at Tucano.
Noranda joint ventured the property from CIDAPAR in 1975 and conducted an exploration program consisting of soil sampling, trenching, pitting and shallow auger drilling.
CCO Construtora Centro Oeste Ltda (CCO) commenced an exploration program at the Arara target (Cachoeira North) in 1987 with the objective of defining a shallow oxide gold resource. They drilled 2595 m of diamond core in 32 holes and discovered high-grade gold veins in this area.
Companhia de Mineração e Participações S.A. (CMP) joint ventured the Tucano mining license in 1985 and conducted a large exploration program including over 13,000 m of diamond and RC drilling in 161 holes. They prepared a Pre-Feasibility Study though withdrew from the project in 1992.
Brazilian International Goldfields Ltd (BGZ) joint ventured the Cachoeira Project in 1998 and retained Howe Chile to implement and oversee a QAQC program on their drilling program at the Tucano target in December 1998. BZG drilled 2380 m of diamond core in 14 holes.
Gold Fields Ltd joint ventured the Cachoeira project from BZG in 1999 and undertook an exploration program via the JV company, Cachoeira Mineração Ltda (CML), focused mainly on the generation of new targets outwith the known trend based strongly on airborne geophysics. They conducted 5486 m of diamond and RC drilling in 41 holes.
Vale S/A (then CVRD) joint ventured the Cachoeira North property in 2003 from CCO and conducted an exploration program based on geochemistry, geophysics and diamond drilling. (3125 m in 20 holes).
Luna Gold is the first company to effectively consolidate the Cachoeira mining rights, each of which straddle a portion of the CSZ that hosts the gold mineralization. Exploration by previous operators was conducted in a disparate manner. Luna's opportunity at Cachoeira is to explore the potential of the entire mineralized trend (Fig. 4) which significantly increases the project potential.
Additionally, the Company must present a NI 43-101 compliant resource estimate by October 2010 else the Company will pay a fine of $200,000 each year. Kinross has the right to acquire a 51% interest in the project by paying the Company the amount the Company invested in the project during the exploration stage should a mineral reserve which exceeds 2 million ounces of gold be defined.
On October 31, 2008, the Cachoeira project was put on care and maintenance to preserve cash.
At June 30, 2009, the Company incurred accumulated exploration expenditures of $3,945,709 BRL as part of the Company's commitment to incur exploration expenditures of $9,500,000 BRL.
The main mineralized trend identified to date is approximately 4 km long and consists of two sub-parallel trends in Cachoeira North which merge southwards, possibly joining near Tucano in the south (Fig. 4). Three main targets occur from south to north: Tucano, Coruja and Arara. The best gold mineralization at Cachoeira occurs at Tucano where multiple, sub parallel individual gold mineralized zones can be traced over a strike length of approximately 300 m and across widths of 1 to 15 m.
The extent of the enclosing hydrothermal alteration and gold mineralization indicate that a large and deep seated mineralizing system was operative within the CSZ. The host rocks are highly foliated indicating intense shearing occurred. The dominant control on gold mineralization at Cachoeira is structural, both in the formation of dilatant structures in the CSZ and also in the subsequent shearing, folding, boudainage and displacement of the gold lodes.
Mineralization/Alteration
Two main types of primary mineralization have been identified:
- System of gold-bearing quartz veins hosted predominantly in mafic volcanics and extending over a strike length of over 4 km within the CSZ. These veins are aligned with the foliation, strongly banded and mineralized with accessory fine-grained pyrite and arsenopyrite. A notable aspect of mineralization at Cachoeira is the occurrence of free gold in quartz veins in high-grade intervals from the 2008 LGM drill program from Tucano, Coruja and Arara. The visible gold is usually found in grains 0.1-1.0 mm in diameter (Fig. 5)
- Disseminated gold in sulfide-bearing quartz vein stockworks associated with both porphyritic intrusive bodies and marginal to the main quartz veins. The average grade of these bodies is generally 1-3 g/t Au although individual veins usually have considerably higher grade.
- An older phase characterized by carbonization and silification which directly affects the mafic-ultramafic volcanics.
- A late phase manifest by albitization, sericitization, carbonization, silification and sulfidation which is associated extensive fracturing and veining of the host rocks. Most of the gold mineralization is related to this later phase of hydrothermal activity
Gold mineralization at Cachoeira is typical of quartz vein systems in greenstone belt shear zones and is classed as an orogenic gold deposit. Mineralization is similar to that at Hollinger-McIntyre and the West African Ashanti Belt.
Tucano
Tucano extends over a strike length of about 400m and includes a series of steeply west-dipping quartz veins and stockwork zones, the uppermost portions of which have been exploited by garimpeiro pits and shafts which extend down to a maximum depth of 110m. Historical and Company drilling has intersected multiple individual mineralized veins/stockworks ranging in width between 1 and 15 m mixed with low-grade to barren zones which together form mineralized shells as wide as 100m. Table 2 shows select historical and Company drill results from Tucano. The high-grade ore shoots have a south to southwest plunge. Company drilling in 2008 consisted of a series of wide step-out holes to text the dip and plunge extent of the mineralization. Most holes intersected good gold intervals which open up the potential of Tucano.
Table 2
| Target | Company | Hole ID | From (M) | To (M) | Interval (M) | Au (G/T) |
|---|---|---|---|---|---|---|
| TUCANO | BGZ | TH01 | 14.00 | 64.00 | 50.00 | 2.43 |
| INCLUDING | 38.00 | 46.00 | 8.00 | 8.37 | ||
| CML | CSD01 | 43.00 | 49.00 | 6.00 | 11.06 | |
| CSD04 | 19.00 | 24.55 | 5.55 | 12.18 | ||
| CSD09 | 57.00 | 77.00 | 20.00 | 6.72 | ||
| INCLUDING | 73.00 | 77.00 | 4.00 | 22.93 | ||
| CSD10 | 131.00 | 214.00 | 83.00 | 1.7 | ||
| CSD11 | 55.00 | 65.00 | 10.00 | 11.43 | ||
| CSD12 | 73.00 | 110.33 | 37.33 | 2.45 | ||
| INCLUDING | 100.00 | 108.59 | 8.59 | 5.59 | ||
| LUNA | LCD018 | 92.60 | 96.00 | 3.40 | 7.01 | |
| 224.00 | 233.00 | 9.00 | 5.96 | |||
| INCLUDING | 229.00 | 232.00 | 3.00 | 15.4 | ||
| LCD025 | 108.50 | 115.00 | 6.50 | 4.38 | ||
| 227.50 | 239.40 | 11.90 | 3.45 | |||
| INCLUDING | 227.50 | 229.75 | 2.25 | 15.99 | ||
| LCD026 | 137.55 | 159.00 | 21.45 | 5.87 | ||
| INCLUDING | 137.55 | 145.50 | 7.95 | 14.96 |
Luna's QP has not undertaken any independent analysis of the results of historical drilling and therefore the data should not be relied upon.
Cachoeira North
The Cachoeira North area consists of Luna's mining permits located north of the federal highway BR-316. Mineralization can be intermittently traced for 3 km in two sub-parallel trends flanking the west and east side of the Cachoeira Ridge (Fig. 4). The Company focused the 2008 drill program at the Coruja and Arara targets which consist of high-grade quartz veins hosted in mafic volcanics. Table 3 shows Historical and Company drill results from Coruja and Arara. The eastern mineralized trend (Pernalonga, Manelao and Bragança Targets) has only been explored in a preliminary fashion.
Table 3
| Target | Company | Hole ID | From (M) | To (M) | Interval (M) | Au (G/T) |
|---|---|---|---|---|---|---|
| CORUJA | LUNA | LCD013 | 52.00 | 58.00 | 6.00 | 1.93 |
| LCD017 | 33.00 | 53.00 | 20.00 | 9.04 | ||
| INCLUDING | 47.00 | 53.00 | 6.00 | 27.72 | ||
| ARARA | CCO | FS21 | 21.50 | 26.50 | 5.00 | 15.04 |
| FS26 | 7.69 | 12.45 | 4.76 | 2.02 | ||
| FS31 | 70.03 | 71.96 | 1.93 | 33.14 | ||
| CVRD | FD003 | 66.00 | 102.00 | 36.00 | 1.02 | |
| FD004 | 120.00 | 139.00 | 19.00 | 4.95 | ||
| INCLUDING | 122.00 | 130.00 | 8.00 | 9.62 | ||
| FD008 | 82.00 | 89.00 | 7.00 | 18.97 | ||
| FD010 | 3.00 | 13.00 | 10.00 | 2.42 | ||
| LUNA | LCD001 | 0.00 | 97.00 | 97.00 | 0.43 | |
| LCD004 | 55.00 | 69.35 | 14.35 | 1.68 | ||
| LCD007 | 151.00 | 153.00 | 2.00 | 5.4 | ||
| LCD009 | 164.00 | 170.00 | 6.00 | 12.58 |
Luna's QP has not undertaken any independent analysis of the results of historical drilling and therefore the data should not be relied upon.