Brazilian Gold Corporation
TSX VENTURE : BGC

Brazilian Gold Corporation

June 20, 2011 09:00 ET

Brazilian Gold Becomes the Operator of the Boa Vista Gold Project, Northern Brazil, Securing a 51% Interest

VANCOUVER, BRITISH COLUMBIA--(Marketwire - June 20, 2011) - Brazilian Gold Corporation (TSX VENTURE:BGC) -

Highlights

  • Brazilian Gold has earned a 51% interest in the Boa Vista project and is now the operator.
  • 2010-2011 exploration program to date identifies five targets for follow-up exploration work.
  • VG1 gold in soil anomaly is approximately 2,000 metres in length, up to 350 metres in width and trends east-west.
  • First drill hole (VGDD001) discovers gold mineralization at VG1 and intersects 1.43 grams/tonne over 102.3 metres.
  • VG1 alteration and mineralization is up to 135 metres in width and is open along strike and to depth.
  • Less than 30% of the property explored to date.
  • Extensive geophysical survey to be completed in the next 12 months.
  • Phase Two drill program will initially focus on delineating near surface gold mineralization at VG1.

Brazilian Gold Corporation ("Brazilian Gold" or the "Company") (TSX VENTURE:BGC) is pleased to announce the completion of an option agreement that secures for the Company a 51% interest in the Boa Vista project in the Tapajós region of northern Brazil. On signing the agreement, Brazilian Gold committed to provide a cash payment of US$600,00 and exploration expenditures of US$3 million within two years of signing to earn a 51% interest in the project from Boa Vista Gold Inc. These commitments have been fulfilled six months ahead of schedule. As a result of earning a 51% interest in the project, Brazilian Gold will become project operator and future exploration expenses will be shared on a pro rata basis with the Company's joint venture partner.

Geochemical surveys completed in 2010 cover less than 30% of the Boa Vista property and reconnaissance mapping, prospecting and sampling of the numerous garimpeiro workings will be completed in the next 12 months to get a better understanding of the potential on the remainder of the property.

2011 Exploration Update on the Boa Vista Project

The Boa Vista project consists of three exploration concessions for a total area of approximately 12,536 hectares. The 2010 exploration program was successful in outlining a large gold in soil anomaly (3.5 kilometres in diameter) that included a number of historic garimpos (Almir, Jair, PlanAlto and Ze de Leite) as well as a new gold discovery at VG1. The VG1 anomaly is 2 kilometres in length, up to 350 metres in width and trends east-west. The eastern half of this anomaly, which includes the original discovery outcrops and the highest gold in soil values, was the focus of an extensive trenching program (News Release 5/11, March 1, 2011).

A Phase One Drill Program (14 holes in 1,749 metres) was completed in Q1 2011 and consisted of relatively shallow exploratory holes that tested beneath the above mentioned garimpos as well as a fence of drill holes (5 holes in 709 metres) across the VG1 anomaly. To view a plan map of the drill holes and a cross-section (VG1 anomaly) associated with this press release, please visit the following link:

http://www.braziliangold.ca/email/20110620-1/Boa-Vista-Targets-And-Boreholes.jpg

Drill results for the first hole (VGDD001) at VG1 assayed 1.43 grams/tonne over 102.3 metres and was previously reported in News Release 6/11 (March 7, 2011). The remaining holes from the Phase One program, except for one hole at Jair, are reported below (Table 1).

Table 1: Boa Vista Phase One drill results.
ProspectHole IdFromToIntervalAu g/t* Comment
AlmirALDD00118.9833.0814.100.20
AlmirALDD00199.75100.540.792.25
AlmirALDD00240.1241.040.923.48
AlmirALDD003 No significant assays
JairBVDD001 No significant assays
JairBVDD002 No significant assays
JairBVDD003 Assays Pending
PlanAltoPLDD001* No significant assays
VG1VGDD001*0.00102.30102.301.43 Previously reported
VG1includes0.0029.6029.603.09 Previously reported
VG1includes58.4572.0313.582.80 Previously reported
VG1VGDD001b*0.0056.456.40.54 Re-drill of VGDD001
VG1VGDD002* No significant assays
VG1VGDD003*24.2596.0871.830.22
VG1includes82.0886.084.001.62
VG1VGDD0047.84137.84130.020.48
VG1includes66.6087.0220.421.29
VG1includes67.5472.084.544.25
VG1VGDD005*0.0014.8414.840.83
Ze de LeiteZLDD001*145.76148.963.20.10 Ends in mineralization
*Golden Tapajos Mineração Ltda. inserted external quality control samples in these sample shipments, however there was insufficient sample material for analysis and therefore these results cannot be verified by Brazilian Gold. The results are included for reference only and the reader should not rely on these assays.

VG1 Prospect

A fence of shallow angle drill holes (VGDD003 to VGD005), as well as a vertical hole (VGDD001), were completed across the eastern portion of the VG1 anomaly in the vicinity of the original discovery outcrop; the angle holes were drilled at -60° towards azimuth 035°. All drill holes intersected significant intervals of gold mineralization within silica+sericite+pyrite altered granite with some inclusions of altered volcanic rock. Higher grade gold intervals are associated with increased silica and sulphide alteration. Drill hole VGD002 was drilled north of the VG1 anomaly defined by trenching and returned no significant assays. The Company is extremely encouraged by this initial fence of drill results which indicates the VG1 anomaly is up to 130 m wide, extends from surface to 100 metres depth and is open along strike and at depth. A program of step out drilling along fences across the two kilometre strike length of the anomaly is planned for the upcoming exploration program.

Jair Prospect

The Jair vein is exposed in a garimpeiro pit at the north end of the Jair gold in soil anomaly. The anomaly is approximately 2.6 kilometres long by up to 350 metres wide and trends north-northwest. Two channel samples collected across the Jair vein north and south of the shaft where garimpeiro workers are currently mining and processing gold returned 35 grams/tonne gold over 0.65 metres and 103.5 grams/tonne over 0.50 metres, respectively (News Release 5/11, March 1, 2011). The extremely high grade Jair vein strikes north and dips steeply west. It consists of quartz and calcite with minor pyrite, galena, and chalcopyrite. Visible gold is commonly seen in weathered sulphide box work textures and as free gold in quartz.

Two fences of shallow angle drill holes were collared west of the Jair pit; the holes were drilled at -60° towards azimuth 090° to intersect the steeply Jair vein below the pit. The most southern fence consisted of two drill holes (BVDD001 to BVDD002). Drill hole BVDD001 was terminated at 43.05 metres depth due to technical difficulties and before the projected intersection of the Jair vein. Drill hole BVDD002 intersected the vein and associated alteration from 65.55 to 70.50 metres depth, but returned only anomalous concentrations of gold. The northern fence is approximately 90 metres north of the southern fence and consisted of one drill hole (BVDD003). Drill hole BVDD003 intersected the vein and associated alteration from 110.28 to 116.66 metres; assays are pending. Only a small part (approximately 100 metres) of the overall strike length (2.6 kilometres) of the Jair gold in soil anomaly was tested in the Phase One drill program.

Almir Prospect

The Almir target consists of a gold in soil anomaly that is 1 kilometer long by up to 400 meters wide that is coincident with a number of garimpo pits that expose quartz veins and stockworks. The soil anomaly trends northwest – southeast (azimuth 120°) similar to the long dimension of the largest garimpeiro pit and similar to the strike of a southerly dipping (10-30°) quartz vein or siliceous layer exposed in the northern face of the pit. The quartz vein is less than 2 metres thick and is underlain by a quartz stockwork veinlets hosted in granitic rocks.

Three drill holes were collared south of the pit to intersect the projection of the quartz vein and stockwork zone at depth. The most easterly hole (ALDD003) was drilled at -60° towards azimuth 030° and intersected quartz veins and strongly altered granite from 67.21 to 78.10 metres; the interval was anomalous in gold up to 0.2 grams/tonne. Drill hole ALDD002 was a vertical hole and collared 65 metres south and 28 metres west of ALDD003. The hole intersected a mineralized vein that graded 3.48 grams/tonne gold over 0.92 metres starting at 40.12 metres depth that appears to coincide with the vein exposed in the pit. The most westerly hole (ALDD001) was drilled at -60° towards azimuth 360° and intersected 0.20 grams/tonne gold over 14.10 metres starting at 18.98 metres depth, and appears to have intersected the mineralization exposed in the pit and intersected in the other drill holes.

PlanAlto Prospect

The PlanAlto prospect is a silicified breccia layer hosted in granitic and felsic volcanic rocks. The layer is several metres thick, resistive to weathering and forms a ridge that can be traced for over 1.8 kilometres; the ridge trends north-south and the resistive siliceous layer appears to dip shallowly to the west. Drainages either side of the ridge have been worked extensively for their alluvial gold, however soil sampling completed across the ridge did not identify significant gold in soil anomalies. A drill hole collared on the western slope of the ridge and drilled at -60° towards azimuth 90° may have intersected the layer from surface down to 36.27 metres depth within the weathered zone, however no significant gold values were intersected; core recoveries were approximately 60% within this interval.

Ze de Leite Prospect

The Ze de Leite prospect is a northeast-southwest trending gold in soil anomaly (>1,000 by 200 metres) that is coincident with a garimpeiro pit and induced polarization anomaly. Drill hole ZLDD001 was collared north of the anomaly and drilled at -60° towards azimuth 140° to test the anomaly at depth. The hole intersected granitic rocks with no significant mineralization except for 0.1 grams/tonne over the last 3.2 metres of the hole, which ended at 148.96 metres depth.

Laboratory Procedures

Drill core is sampled at 2 metre or smaller intervals using a diamond saw. One half of the sample is archived and the other half is dispatched to Acme Analytical Laboratories Ltd.'s sample preparation facility in Itaituba, Brazil, where the sample is crushed, split and pulverized to -150 mesh. The pulp is shipped to Santiago, Chile or Vancouver, Canada for gold fire assay. Acme Analytical Laboratories Ltd. is an internationally certified ISO 9001 laboratory.

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 acquisition, exploration and development of mineral properties in northern Brazil. It is the largest holder of exploration concessions (3,546 km2) in the underexplored Tapajós Mineral Province, which historically produced over 30 million ounces of gold largely from alluvial deposits. The Company has 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. The study is expected to be completed in Q2 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 is currently being operated by AREVA, who are 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
    604 677-6243 (FAX)

    Brazilian Gold Corporation
    Tom Hart
    Investor Relations
    +1 403 701-4278
    www.braziliangold.ca