Brazilian Gold Corporation

Brazilian Gold Corporation

February 28, 2011 09:00 ET

Brazilian Gold Starts Drill Program on Rio Novo Gold Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - Feb. 28, 2011) - Brazilian Gold Corporation (TSX VENTURE:BGC) ("Brazilian Gold" or the "Company") is pleased to announce they have started a diamond drill program at their wholly owned, highly prospective Rio Novo gold project ("Rio Novo" or "Project") located 91 kilometres south of Morais de Almeida along the Transgarimpeiro highway in Pará state, northern Brazil. Please click this link for the Project Location Map.

This Project is within a cluster of projects under the ownership of the Company that management believes will have significant synergies (logistics, management, etc.) with its São Jorge project. At São Jorge, a +800,000 ounce NI43-101 compliant resource has been defined and drilling is underway with the intention of adding to this resource (see News Release 1/11, January 18, 2011). A Preliminary Economic Assessment (PEA), under the management of the highly respected independent engineering firm of Coffey Mining, has recently commenced on the São Jorge project.

The drill program will test auriferous stockwork mineralization and an associated chargeability anomaly outlined in a geophysical survey that was completed in December, 2010. The Company has contracted two diamond drill rigs and budgeted 2,500 metres for this program.

The Rio Novo gold project consists of five exploration concessions for a total area of 44,576 hectares. The Project covers a number of garimpeiro workings and exploration targets including the Jau target. The Jau target consists of quartz+sulphide stockwork mineralization that is exposed in a garimpeiro pit. The mineralization is greater than 50 metres wide and historic grab samples (25 samples) of the quartz+sulphide veins returned several grams to 10's of grams/tonne gold and intervening altered granite commonly grades from <1 to 2 grams/tonne (Table 1). The mineralization strikes east-west and dips steeply.

Table 1: Examples of selected grab samples from the Jau pit.
Sample No. Gold grams/tonne* Comment
RNK-1 0.82 Altered granite
RNK-6 12.81 Quartz-pyrite vein
RNK-13 1.26 Quartz-pyrite vein
RNK-18 107.10 Quartz-pyrite vein
RNK-24 0.06 Altered granite
* The reader is cautioned that the grab samples are historic in nature and have not been verified by Brazilian Gold Corporation.

An induce polarization survey completed along strike of this mineralization has identified a strong chargeability anomaly that is 1,400 metres long by up to 400 metres wide and extends from surface to greater than two hundred metres depth. The drill program will test below the Jau pit and its associated chargeability anomaly along strike. Assay results from this drill program will be released as they are received and once they have been verified by the Company's geologists.

The Rio Novo project fits with the Company's strategy of identifying high quality exploration projects that are road accessible (ranch land), close to electrical transmission lines and adjacent to the Company's development stage São Jorge project. The Company has five exploration projects (Pista Manual, Surubim, Rio Novo, Ouro Mil and Santa Julia) within a 100 kilometre radius of São Jorge, which will allow for lower cost exploration and development, and may provide synergies whereby product from more than one project are trucked to a central processing facility.

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. The Company has a portfolio of ten grass-roots to development stage gold projects (8 projects in the Tapajós and 2 projects in the nearby Alta Floresta Gold Province) with drill programs (4 drill rigs) currently underway on the São Jorge and Rio Novo projects. The Company has also recently completed a Phase One drill program (13 holes in 1,188 m) on the Boa Vista project in January 2011; the assay results are pending and a review underway in conjunction with our JV partner to further define targets for a second phase drilling campaign.

The São Jorge development project hosts an NI 43-101 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 Scoping Study or Preliminary Economic Assessment (PEA) that will look at various development and production scenarios to determine the economic viability of the project. The study is expected to be completed in April 2011 and will include an updated resource estimate incorporating new drill holes completed by Brazilian Gold. 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
    John (Ian) Stalker
    CEO and Director
    +1 604 602-8188
    Brazilian Gold Corporation
    Joanne Yan
    President and Director
    +1 604 602-8188
    +1 604 677-6243 (FAX)
    Brazilian Gold Corporation
    Tom Hart
    Investor Relations
    +1 403 701-4278