Brazilian Gold Corporation
TSX VENTURE : BGC

Brazilian Gold Corporation

May 19, 2011 09:00 ET

Brazilian Gold Announces the Substantial Expansion of Its Exploration Property Portfolio in the Tapajos Mineral Province, Brazil

VANCOUVER, BRITISH COLUMBIA--(Marketwire - May 19, 2011) - Brazilian Gold Corporation (TSX VENTURE:BGC) ("Brazilian Gold" or the "Company") is pleased to announce that it has signed a binding Framework Agreement ("Agreement") to acquire a 100% interest in a regional property package in the Tapajós Mineral Province ("TMP") of Northern Brazil from Talon Metals Corp. ("Talon"). The package incorporates 16 separate exploration concessions, totalling 115,926 hectares, in an area located contiguous with or in close proximity to the Company's existing road accessible projects.

Brazilian Gold is the largest single holder of exploration concessions and/or exploration applications with priority in the TMP. Following the signature of the Agreement, the Company has exploration rights over a total land area of 374,575 hectares.

Highlights:

  • Large-scale, highly prospective land package (115,926 hectares)
  • Two concessions contiguous with Magellan Minerals Ltd's Cuiú-Cuiú property, which hosts a 1.3 million ounce gold resource, and within the Cuiú-Cuiú – Tocantinzinho – Palito – São Jorge mineralized trend
  • Five concessions contiguous with the Company's Pista Manual and Rio Novo projects
  • Nine concessions within 50 kilometres of the Transgarimpeiro highway, which contains extensive historical alluvial ('garimpeiro') workings
  • Operational synergies with the Company's existing property portfolio, including the advanced stage São Jorge project
  • A 50% increase in the Company's property portfolio in the TMP

The TMP is the largest alluvial gold province in Brazil and the third largest in the world, with unofficial production of 30 million ounces of gold, primarily from streams. Although the TMP was the focus of the world's largest gold rush (1978-1995), it remains an under-explored mineral province. One mid-size gold deposit has been discovered to date; Tocantinzinho has gold resources of 2.5 million ounces. There are a number of smaller deposits, including Cuiú-Cuiú (1.3 million ounces) and São Jorge (0.8 million ounces). The gold deposits are associated with quartz and sulphide stockwork zones hosted in granitic rocks.

Key Terms of the Binding Framework Agreement

Subject to satisfactory due diligence, Brazilian Gold will sign a definitive option agreement with Talon in respect of the property package and thereafter has agreed to issue 250,000 Brazilian Gold shares to Talon. An additional 250,000 shares will be issued to Talon on the first anniversary of the definitive option agreement, subject to the grant of exploration licenses on all properties currently under application which form part of the property package.

Upon the completion of share issuance, Brazilian Gold will have exercised the option and will own a 100% interest in the regional package, subject to a 1.25% net smelter royalty ("NSR"). Brazilian Gold has the right to purchase 50% of the NSR for US$1,000,000 or 100% of the NSR for US$2,000,000 within 30 days of the start of commercial production. The Agreement is subject to Brazilian Gold receiving regulatory approval.

Garnet Dawson, M.Sc., P.Geo. (British Columbia), Vice President, Exploration for the Company and a Qualified Person, as defined by National Instrument 43-101, has reviewed and approved the technical disclosure contained in this News Release.

About Brazilian Gold Corporation

Brazilian Gold Corporation is a Canadian-based public company with a focus on the acquisition, exploration and development of mineral properties in Northern Brazil. The Company has a portfolio of ten grass-roots to development stage gold projects (8 projects in the TMP and two projects in the nearby Alta Floresta Gold Province) with drill programs (4 drill rigs) currently underway on the São Jorge, Rio Novo and Pista Manual projects.

The São Jorge development project hosts an NI43-101 indicated resource of 343,000 ounces (8.3Mt grading 1.3 g/t gold) and an inferred resource of 458,000 ounces (12.6 Mt grading 1.1 g/t gold) using a 0.5 gram/tonne cut-off (Coffey Mining, Sept. 14, 2010). The Company has commissioned Coffey to complete a Preliminary Economic Assessment (PEA) or Scoping Study that will look at various development and production scenarios to determine the financial viability of the project. It is expected that the study will be completed in May 2011 and dependent on project economics, the Company plans to embark on a pre-feasibility/feasibility study soon thereafter.

Brazilian Gold owns a 75% interest in the Rea Uranium Project in Northeastern Alberta, which AREVA currently operates. AREVA is earning up to a 50% interest by completing an additional Cdn$2.84 million in expenditures by Dec. 31, 2013.

Some statements in this news release contain forward-looking information, including without limitation statements as to planned expenditures and exploration programs. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or the accuracy of this news release.

Contact Information

  • Brazilian Gold Corporation
    Ian (John) Stalker
    CEO and Director
    +1 604 602-8188

    Brazilian Gold Corporation
    Joanne Yan
    President and Director
    +1 604 602-8188

    Brazilian Gold Corporation
    Tom Hart
    Investor Relations
    +1 403 701-4278