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Cleveland Mining To Resume Exploration At O Capitão Gold Project In Brazil

Cleveland Mining (ASX: CDG) is poised to resume exploration work at its O Capitão Gold Project in Brazil after the Federal Court of the State of Goiás ruled in favour of the company.

The Court had demanded the Brazilian Mines Department proceed with the immediate publication (gazetting) of Research Licenses 862.739/2011 and 862.740/2011 for the project.

This will not only allow the company to resume exploration work, it also allows it to apply for a permit to extract ore.

As the site has been previously mined and there is no need for processing infrastructure on site, it is anticipated that the permitting process will be relatively fast and straight forward. Ore in the artisanal pit is exposed and will be readily available for mining.

Cleveland plans to produce an initial JORC Resource within weeks from work already completed and also resume studies to determine the economics and logistics of processing ore from O Capitão at the Premier Gold Mine, which is located less than 10 kilometres away.

O Capitão

O Capitão has been 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 though no professional mining group has had the opportunity to fully investigate it.

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.

It successfully re-applied for the concessions in the name of Cleveland Premier Joint Venture in November 2011; however, a Brazilian Federal Government moratorium on gazetting of concessions has meant that no work could be done at O Capitão for the past 18 months.

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.

The company believes that the artisanal pit could provide a near-term source of high-grade throughput material for the production plant at Premier. Fresh ore is already exposed.

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.

The geology remains open along strike, presenting further exploration potential.

Cleveland had $1.94 million in cash as of 31 March 2013.

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