Aura Gold Inc. 'Formerly Canadian Baldwin Resources Limited'

March 30, 2006 19:34 ET

Aura Gold Inc.'Formerly Canadian Baldwin Resources Limited': Completes Additional Property Acquisitions in Brazil

TORONTO, ONTARIO--(CCNMatthews - March 30, 2006) - Aura Gold Inc. ("Aura Gold") is pleased to announce additional property acquisitions in Brazil. Aura Gold's's initial property acquisition in Brazil was announced in a news release dated January 5, 2006.

Aura Gold has now entered into option agreements to acquire interests in substantial land areas in two gold-bearing greenstone belts in southern Para State, north-central Brazil, and a potential high-level epithermal gold system in southeastern Amazonas State, in northwest Brazil. The two greenstone belt projects, Inaja and Gradaus-Cumaru, are the southernmost and least-explored accessible greenstone belts remaining in the well-known and highly competitive Carajas Metallogenic Province. The Aldebaran project is in a remote corner of the vast, largely unexplored Amazon basin, and is the site of a large, well-preserved epithermal system similar to those found in much younger volcanic terranes throughout the world.

Gradaus-Cumaru Greenstone Belt project

Aura Gold has acquired a significant portion of the Gradaus-Cumaru Greenstone Belt in the southern part of the Carajas region, about 200 km south of the main Carajas District, home to many world-class copper-gold, gold, iron, nickel and manganese deposits and mines. Aura Gold's properties can be reached by light aircraft using an excellent runway at the town of Cumaru or by 100 km of all-weather unpaved road from Redencao, the nearest full-service city served by a major paved highway. The area is mostly non-forested grazing land and is easily accessible during most of the year.

Aura Gold's properties consist of Gradaus, a 1,560-hectare mining property, and an adjacent 40,000-hectare portion of the previously unexplored Cumaru Garimpeiro Cooperativa. The Gradaus property, about 10 kilometres by good road from the town of Cumaru, consists of developed private ground with a mining license and an operations camp. It has seen two generations of mining: illegal, scattered activity by garimpeiros (artisanal miners) who exploited shallow alluvial gold in the early-1980s, and an organized mining effort by Mineracao Gradaus Ltda. in the early-1990s. The adjacent and much larger Cumaru property is the site of former extensive shallow artisanal operations from the early-1980s and has never been explored by a mining company.

The Mineracao Gradaus Ltda. operation in the early 1990s consisted of an open pit mine and a gravimetric-heap leach plant, recovering gold from veins in oxidized bedrock (saprolite) beneath the garimpos (alluvial gold workings) on one small part of the Gradaus property. The mine reportedly produced more than 200,000 ounces gold, but Aura Gold cautions these production figures have not been verified and are mentioned here for historical purposes only. During this operation, Mineracao Gradaus conducted a limited exploration drill program consisting of 21 core holes (2,260 metres) drilled to an average depth of less than 110 metres. Although the drilling confirmed additional gold-rich oxide and primary material beneath the open pit, the mineralization was never delimited laterally or to depth. Most of the core, which remains in storage at the mine site, was not sampled or assayed.

The large Cumaru Garimpeiro Cooperativa, which adjoins the Gradaus property on the east, was discovered during the famous gold rush frenzy that followed the 1980 discovery of Serra Pelada in the northern part of the Carajas region. Cumaru, which is known as Brazil's "second Serra Pelada," is credited by the Central Bank of Brazil with 25,000 kg (800,000 oz.) official gold production from artisanal workings during 1981-1986, however, the actual production from this period including unrecorded gold is almost certainly much larger. From 1986 until today, the area has continued to produce gold from scattered small alluvial operations; total production from this era is unknown but probably significant.

The Gradaus-Cumaru project area consists of Archean-age greenstone sequence and granitic to gabbroic intrusives, all of which have been intruded by slightly younger granitic bodies, the more important of which is the Cumaru granodiorite stock. All of these rocks are cut by regional ENE-trending shear zones and NW-trending secondary structures. The Gradaus mine is localized in a shear zone cutting the Cumaru stock near its contact with the greenstone belt. Gold occurs in high-grade veins in the shear zone and as low-grade disseminations in the surrounding alteration envelope. It has been suggested the gold at Gradaus may be related directly to the stock and represents an example of a Precambrian porphyry-style gold deposit. Continuing 8 kilometres east on the adjacent Cumaru property there are many large and extensive alluvial gold workings along the same intrusive-greenstone contact. This contact zone is an obvious and promising exploration target, however it has never been systematically explored by a mining company nor tested by drilling.

Elsewhere on the properties, gold shows and alluvial workings occur prolifically in the metamorphosed sedimentary and volcanic rocks of the greenstone belt sequence. Many of these occurrences are veins and stockwork systems in shear zones, some occurrences are associated with interbedded iron formation and others are obscured by the many large garimpos present all along the belt. Copper, cobalt or molybdenum minerals are reported to occur locally with some of the gold occurrences. In summary, the Gradaus-Cumaru project area appears to offer a variety of promising near-term and long-term exploration gold targets, none of which has ever been systematically explored.

The Gradaus-Cumaru Properties consist of two agreements. The first is an agreement with respect to the Gradaus Property with an arm's length party. This agreement is structured as an option to acquire a 100% interest in consideration for cash payments of U.S. $535,000 and share issuances of 500,000 shares in staged payments over a period until January 1, 2009. The intial payments consist of a cash payment of U.S. $25,000 and the issuance of 100,000 shares, and a total of U.S. $1,500,000 in property expenditures over the next three years. The property is also subject to a 1.5% net smelter return royalty (NSR) with certain buyback rights. In addition, Brazilian mining legislation imposes a 1.0% NSR royalty on all gold production.

The second agreement with respect to the Cumaru Property is with Yamana Gold Inc. Aura Gold will have the right to earn a 70% interest in the property in consideration for the issuance of 1,000,000 Aura Gold shares to Yamana upon execution of the agreement and property expenditures totaling U.S.$ 3.0 million over three years. Aura Gold will assume the continuing property payments for Cumaru. The property is also subject to a 1.5% net smelter return royalty held by a previous landowner which may be purchased at any time for U.S.$ 1.25 million. Three directors ofAura Gold, Patrick Mars, Victor Bradley and Peter Marrone, are also directors of Yamana. The transaction was approved by the independent directors ofAura Gold and independent directors of Yamana other than Messrs Mars and Bradley. The terms of the agreement are more favourable to other proposals for Cumaru received by Yamana. The Cumaru property is not core to Yamana and Yamana believes better value will be realized with this arrangement.

Inaja Greenstone Belt project

Aura Gold has agreements for 35 claims covering about 70 percent (133,000 hectares) of the Inaja Greenstone Belt, located about 100 kilometres south of Gradaus-Cumaru in the southernmost part of the Carajas region. The Inaja belt, which extends for more than 100 kilometres in an east-west direction, remains scarcely explored although historically well-known for its alluvial gold deposits, discovered and most active in the mid-1980s. The largest of these artisanal workings, the Carapato and Forquila garimpos in the east-central part of the belt, are on concessions recently acquired by Aura Gold. The workings at these sites are each a kilometre or more long and hundreds of metres wide. Carapato and Forquila are thought to be the third and fourth largest garimpos in the Carajas region, ranking in productivity after the famous Serra Pelada and Gradaus-Cumaru garimpos.

Bedrock in the Inaja Greenstone Belt consists of Late-Archean age metamorphosed volcanic and sedimentary rocks which are intruded by igneous bodies of granitic to gabbroic composition. Some recent prospecting efforts have been reported in searches for gold, copper, nickel, iron and diamonds, but the belt has undergone very little systematic, serious exploration.

In the west-central part of the Inaja belt, Aura Gold's concessions encompass several alluvial gold workings apparently related to a series of parallel regional NW-SE shear zones spaced about 10 kilometres apart. Between these NW-SE shear couples, E-W trending zones of structural dilation have formed, creating a structural setting highly favorable for lode gold deposits and comprising a high-priority site to explore for bedrock gold.

The far western end of the belt, also controlled by Aura Gold, is a structurally complex area of extensional shears, compressional thrust faults and later igneous intrusions. This area contains several significant alluvial gold workings and a number of prospects for other commodities such as nickel, manganese and iron.

Aura Gold's properties in the Inaja Greenstone Belt were acquired in nine separate arm's-length agreements with the various landowners. The agreements are structured as options to acquire 100% interests in the respective mineral claims with aggregate cash payments of U.S. $2,111,000 and aggregate share issuances of 2,750,000 shares staged at different times until December 1, 2010. Initial payments consist of US $161,000 in cash and the issuance of 750,000 shares. Portions of the mineral claims are subject to net smelter return (NSR) royalties ranging from 1% to 2% with certain buyback rights. In addition, Brazilian mining legislation imposes a 1.0% NSR royalty on all gold production. There are no work commitments on any of the properties. Arm's length finders' fees of 400,000 common shares and U.S. $40,000 in cash have been paid with respect to these acquisitions.

Northern Carajas

As announced on January 5, 2006, Aura Gold has also entered into an agreement to acquire 74 mineral claims and databases covering approximately 617,000 hectares in Para State in northern Brazil. Of this land, 53 claims totaling approximately 430,000 hectares are in the northern part of the Carajas region, 8 claims totaling approximately 71,000 hectares are in the southern part of the Carjas region (close to Cumaru or Inaja), one claim is part of the Inaja Greenstone Belt Project, and the remaining 12 claims totaling 116,000 hectares are in the southern part of the Tapajos region, west of Carajas, which will constitute a new project under consideration known as the Tapajos Project.

The 53 claims (430,000 hectares) in the northern part of the Carajas region are in two major claim groups called "Far North Carajas" and "North Carajas".

Far North Carajas consists of 20 claims (166,000 hectares) spread across a 100-kilometre long area about 150 kilometres north of the main Carajas mining district. This area hosts a number of extensive manganese prospects and has other geological similarities significantly similar to the Carajas district. The ground was previously explored by RTZ (Rio Tinto PLC/Ltd.) with geophysical surveys and reconnaissance sampling focused on copper and other base metals. Although gold occurrences are known and a few new gold shows were found by RTZ (Rio Tinto PLC/Ltd.), the area was not explored for gold. As far as Aura Gold can determine, the area has never been tested for gold or base metals by drilling.

North Carajas consists of 33 claims (264,000 hectares) across a 160-kilometre long area extending 15 kilometres northeast to 120 kilometres northwest of the Carajas mining district. Some of the claims are located close to major world-class ore deposits such as Salobo and Serra Pelada. The claims were previously explored by Teck (Teck Cominco Limited) with geophysical surveys and reconnaissance sampling focused on copper and other base metals, but was never drilled. Gold occurrences are reported throughout the region but the claims have never been examined in detail for gold.

Aura Gold's agreement for these large early-stage claim blocks is with Santa Elina Mines Corporation. Aura Gold has been assigned a 100% interest in the mineral claims in consideration for a 2% net smelter return royalty. Also as announced on January 5, 2006, Santa Elina Mines acquired 7,000,000 Units of Aura Gold at $0.10 per Unit for total gross proceeds of $700,000 pursuant to a non-brokered arm's-length private placement. Each Unit consists of one common share and one-half of one common share purchase warrant. Each whole warrant entitles the holder to acquire one common share for $0.20 until December 22, 2007. Santa Elina Mines is a Brazilian mining group with a long history of mining in Brazil. Pursuant to the terms of the subscription, as long as Santa Elina Mines owns at least 10% of the issued and outstanding common shares of Aura Gold, Santa Elina Mines has a pre-emptive right to participate in any and all equity financings on a pro rata basis to its non-diluted share ownership position as at the effective date of any such equity financing.

Aldebaran Project

The Aldebaran Project, consists of approximately 10,000 hectares in southeastern Amazonas State between the famous colonial-era Tapajos and Juruena gold fields. The property consists of Proterozoic-age felsic volcanic and volcanoclastic rocks intruded by granitic stocks. The rocks are parts of a rhyolitic intrusive-volcanoclastic complex formed within a large NW-SE structural extensional corridor which cuts older Archean basement. The complex appears to be related to subvolcanic intrusions accompanied by caldera-forming volcanic eruptions and is associated with shells of alteration and mineralization which are draped over the top of resurgent rhyolite porphyry domes.

At Aldebaran, the alteration and mineralization have features suggesting they represent the preserved remains of a high-level epithermal system of Proterozoic-age. Because most epithermal deposits are ephemeral in nature, epithermal deposits of Proterozoic-age are globally quite rare. Recently, however, a number of Proterozoic epithermal systems have been described at various places throughout the vast Amazon region, suggesting that these ancient epithermal systems have been preserved in a relatively stable terrane and have not severely eroded since they were formed. The exploration targets associated with these systems could include bonanza-type gold veins, gold or copper-gold porphyry deposits and stockwork-breccia bodies.

The Proterzoic host sequence at Aldebaran is altered with rather intense silicification, extensive brecciation, multi-episodic colloform banded quartz veins (including some adularia), veinlet stockworks, hematite, pyrite and traces of chalcopyrite. Limited drilling to relatively shallow depths indicates gold is mainly associated with sulfides in the veins but also occurs in small amounts in the altered wallrocks. The altered system is several kilometres long and up to 500 metres wide; regional geophysical data suggest it is only one of several similar systems which may be preserved in the region.

Aura Gold has entered into an agreement structured as an option to earn a 100% interest in the Aldebaran property in consideration for an initial cash payment of U.S. $20,000 and the issuance of 500,000 shares. The option continues to remain in effect in consideration for periodic cash payments until 2008 totaling U.S. $530,000, a 1.0% net smelter return royalty (which may be purchased at any time for U.S. $5.0 million) and cash payments of U.S. $2.0 million upon completion of a bankable feasibility study, U.S. $1.0 million upon a positive production decision (or 500,000 shares in lieu thereof) and U.S. $2.0 million after six months of commercial production.

The Brazilian Opportunity

Aura Gold believes there are many excellent opportunities for mineral explorers in Brazil, a politically stable country with largely untapped geological terranes similar to the world-class mineral settings of other expansive shield areas in Canada, Australia and Africa. The Carajas region in the southeast part of the Amazon Craton appears especially promising and will be one of the major focuses of Aura Gold's ongoing efforts in Brazil.

The Carajas region, historically famous for its world-class deposits of iron, nickel, manganese and gold, has recently become one of the world's premier regions for iron oxide-copper-gold (IOCG) deposits. Since the discovery of the huge Olympic Dam deposit in Australia in the 1970s, IOCG deposits have been aggressively sought worldwide by major mining companies, with no metallogenic province to date yielding more giant discoveries than the Carajas region. Important discoveries include Salobo (784 Mt @ 0.96% Cu, 0.52 g/t Au), Crystalino (500 Mt @ 1.3 Cu, 0.3 g/t Au), Sossego (355 Mt @1.1% Cu, 0.28 g/t Au), and Alemao Bahia (170 Mt @ 1.5% Cu, 0.80 g/t Au). The potential of this newly recognized copper-gold region to contain many more large discoveries leads to Aura Gold's enthusiasm for these new acquisitions.

The qualified person under National Instrument 43-101 responsible for all technical data reported in this news release is Mr. Mel Klohn, L.P.Geol.

About the Company

Aura Gold Inc. is a Canadian based junior exploration company focusing on exploration in Brazil. Further information is available on our website, www.auragoldinc.com. Aura Gold Inc. has 33,605,718 shares issued and outstanding on a non-diluted basis, 7,400,000 shares subject to issuance and 41,005,718 shares issued and outstanding on a fully diluted basis.

CAUTIONARY STATEMENT: No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein. This News Release includes certain "forward-looking statements". All statements other than statements of historical fact, included in this release, including, without limitation, statements regarding future plans and objectives of Aura Gold, are forward-looking statements that involve various risks and uncertainties. There can be no assurance that such statements will prove to be accurate and actual results and future events could differ materially from those anticipated in such statements. Important factors that could cause actual results to differ materially from Aura Gold's expectations are the risks detailed herein and from time to time in the filings made by Aura Gold with securities regulators.


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