Cleveland Mining (ASX: CDG) will apply to start small scale mining at its O Capitão Gold Project in Brazil after receiving the formal award of its two exploration concessions.
The application of two Utilisation Guides will allow the Cleveland Premier Joint Venture to extract ore from O Capitão and haul it to its Premier Gold Mine for processing.
As the project has previously been subjected to small scale mining and no new infrastructure is required, the permitting is considered low risk.
The JV intends to mine a lower volume of higher-grade material from Premier using underground mining methods during this period, providing mill capacity to process ore from O Capitão.
Work is currently underway to define JORC Resources for one of the two gold mineralised bodies intercepted near surface after limited drilling.
Further drilling, engineering and metallurgical studies will also be prepared. This will be supported by the $10 million investment facility entered into with Baycrest Capital.
Two distinct zones of mineralisation have been defined at O Capitão, one of which hosts significantly higher grade material than that currently being mined at the Premier Mine.
The project is widely viewed as offering excellent potential and offering the potential to hold a significant gold resource that could supplement the expansion of the Premier Mine.
During the 1980's an estimated 6,000 to 12,000 artisanal miners took control of the property, working the high-grade area in the south by hand, and reportedly extracted between five and 10 tonnes of gold.
Cleveland believes that it is the only professional group to explore the project in 25 years, producing noteworthy drilling results in mid-2011.
Early diamond drilling of the artisanal pit by Cleveland returned highlights including:
- 1.3 metres at 14.29 grams per tonne gold from 44.7 metres;
- 2 metres at 17.21g/t gold from 39 metres including 1 metre at 33.61g/t gold; and
- 4 metres at 3.06g/t gold from 1 metre including 1 metre at 10g/t gold.
Drilling also delineated a 250 metre strike length of multiple, stacked, mineralised zones at the Dona Maria target, which is 1 kilometre north of the high-grade artisanal pit.
Mineralisation in both areas is open, presenting significant potential for extension
O Capitão will be developed as a 50/50 joint venture with Edifica.
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