Cabral Gold Announces Positive Prefeasibility Study on the Gold-in-Oxide Starter Operation at the Cuiú Cuiú Gold Project, Brazil with After-Tax IRR of 47.3%
Cabral Gold Announces Positive Prefeasibility
Study on the Gold-in-Oxide Starter Operation
at the Cuiú Cuiú Gold Project, Brazil with
After-Tax IRR of 47.3%
Vancouver, British Columbia--(Newsfile Corp. - October 21, 2024) -
Cabral Gold Inc. (TSXV: CBR)
(OTC Pink: CBGZF) ("Cabral" or the
"
Company
") is pleased to announce a positive Prefeasibility
Study ("PFS") on the development of near-surface gold-in-oxide material at the Cuiú Cuiú gold district in
Brazil. The PFS, which was led by Ausenco do Brasil Engenharia Ltda. ("Ausenco") confirms the Cuiú
Cuiú gold-in-oxide starter project provides a high return and a low capital entry point to mine gold at the
prospective Cuiú Cuiú District.
Highlights
Base Case after-tax IRR of 47.3% and after-tax NPV
5
of US$25.2 million for an initial 720,000
tonne / yr starter operation using open-pit mining of oxidized gold mineralization and heap-leach
processing, and assuming a gold price of US$2,250 / oz
In the case of the current Spot Gold
1
price - US$2,710/oz, the IRR increases to 82.6% and the
after-tax NPV
5
to US$49.3 million
The PFS has a 4.5-year mine life with strong cashflows in the early years and an 18-month
payback
2
The initial in-pit resources have very favorable geometry due to the shallow and high-grade nature
of the ore. The starter pit (planned for the first seven months) is expected to mine shallow, higher
grades with a very good strip ratio, containing an estimated 418,000 tonnes of ore @ 1.38 g/t
average gold grade
3
with just 56,000 tonnes of waste
Average annual gold production in the first 2 years of operation after commissioning is 19,700
ounces per year at an all-in sustaining cost ("AISC") of US$1,003 / oz
Low development Capex of US$ 37.4 million, including 10% allowance on most quantities and
20% Contingency
Significant potential exists to add nearby resources of similar high-value oxidized mineralization
with further step-out and infill drilling at the nearby Machichie and Machichie NE targets, where
recent drilling returned 11m @ 33g/t gold
Beyond the attractive initial financial outcome, the project 1) provides future expansion options for gold-
in-oxide production, 2) provides pre-stripping exposing the underlying primary gold mineralization
reducing future strip-ratios and mining costs, 3) establishes an initial operating platform to more easily
transition into primary ore production, and 4) generates cash to fund an aggressive and sustained drilling
program aimed at expanding the oxide resources as well as the larger underlying primary ore resource
base at Cuiú Cuiú. The company plans to immediately commence detailed engineering ("DE") and
financing activities with the objective of achieving an investment decision and financial close in Q2, 2025
with initial gold production targeted for mid-2026.
During the next six months the company plans to address further potential improvements identified in the
course of the PFS and complete further shallow drilling which it expects will add new gold-in-oxide
resources. These additions have the potential to materially increase the size, scope and mine life of the
project.
Alan Carter, the President and CEO of Cabral commented,
The PFS confirms an economically attractive starter heap-leach and open-pit mining operation
targeting the weathered gold-in-oxide mineralization at Cuiú Cuiú and outlines a pathway for funding
the evaluation and drill testing of numerous targets within the Cuiú Cuiú district. With capital
expenditures of just US$37.4 million and an average operating cash cost
4
of $1,154/oz of gold, the
initial gold-in-oxide project is expected to generate strong cashflows. This cash flow will be used to
fund an aggressive program of drilling directed towards the company's principal objective of
expanding the much larger primary hard rock resource base and drill testing the numerous targets
within the Cuiú Cuiú district.
The PFS has identified several areas that should further improve the projected financial returns.
Meanwhile, further drilling could lead to significant growth of the gold-in-oxide resource base and
hence the mine life. In particular, this may lead to additional Indicated resources from Machichie into
the mine sequencing as well as the upgrading of Inferred resources at Central to the Indicated
category for inclusion in the mine plan.
The company now plans to move forward with the completion of detailed engineering work, further
resource drilling, modelling designed to grow the resource base and securing the necessary project
financing, allowing for an investment decision during Q2 2025.
Overview
Cabral Gold has a 100% interest in the Cuiú Cuiú gold project which is located in Para State in northern
Brazil, immediately adjacent to G Mining's recently commissioned Tocantinzinho gold mine. Cuiú Cuiú
was the largest producer of placer gold during the 1980's Tapajos gold rush. The project area comprises
an entire gold district.
In 2021, the company identified the economic potential of several oxide gold-in-oxide blankets directly
overlying and resulting from the weathering of the higher-grade primary gold deposits at Cuiú Cuiú. An
internal desktop study confirmed that these oxide resources could support the development of an initial
simple and low-cost starter production base that could be developed in the short term based on the
existing Trial Mining Licenses. Furthermore, this study suggested that such an operation could produce
significant cash flows, which could allow the Company to self-fund an aggressive and sustained drill
program aimed at significantly expanding the global resource inventory. Due to the strength of the
business case, the Company proceeded directly to a PFS level study with a scope to assess short-term
pathways to production that were aligned with Cabral's financial capacity.
Resources have been determined for two main gold deposits, MG and Central, and three smaller gold
deposits, JB, Central North, and the oxidized mineralization at PDM. In late 2022, SLR Consulting
(Canada) Ltd. ("SLR") calculated resources for the project which at that time comprised Indicated
resources of 21.6Mt @ 0.87 g/t gold (604,000 oz) and Inferred resources of 19.8Mt @ 0.84 g/t gold
(534,500 oz). In addition, three more significant gold discoveries (Machichie Main, Machichie NE and
PDM primary basement) as well as over 50 other early-stage exploration targets had insufficient drill
spacing to determine resources in 2022.
Economic Analysis
The gold-in-oxide project exhibits strong financial metrics across a range of gold price scenarios (Table
1). IRR's highlight the potentially attractive returns and rapid payback of the project (Figures 1 and 2).
US$M
Low Case
Base Case
High
Spot
2,750 US$/oz
Gold Price (US$/oz)
2,000
2,250
2,500
2,710
2,750
After Tax NPV
5
11.9
25.2
38.3
49.3
51.4
After Tax IRR
26.3%
47.3%
66.7%
82.6%
85.5%
Payback (years)
2.0
1.5
1.1
0.9
0.9
Average annual EBITDA (First 24 months)
19.5
23.8
28.1
31.7
32.4
LOM EBITDA
62.1
79.5
96.9
111.5
114.3
LOM After Tax Cashflow
17.0
32.8
48.3
61.3
63.8
Table 1. Key results of PFS financial analysis and sensitivities to commodity prices
Figure 1. Graph showing gold produced and production costs by year
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Figure 2. Monthly gold production and project payback
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PFS - Detailed Results
The following tables (Tables 2 and 3) provide both key assumptions used to complete the financial
analysis and the primary operational statistics for the project.
Operational Assumptions
UOM
Contained Gold
oz
83,762
Mill and Heap Leach Capacity
t/annum
720,000
Monthly Plant Feed
tonnes
59,685
LOM Mined Grade
g/t
0.81
Strip Ratio
Waste:Ore
0.93
LOM Ore Mined
tonnes
3,225,866
LOM Material Movement
tonnes
6,217,364
Average Gold recovery
%
87.0%
Production
UOM
Mine life
Years
5
Gold Production (First 24 months)
oz
35,826
LOM Gold Production
oz
72,478
Average Annual Production (4.5 year mine life)
oz
16,106
Project Costs
Pre-production Capital Expenditure
US$
37,370,444
Sustaining Capital Expenditure
US$
4,305,851
LOM Average Site Operating Costs
US$/tonne ore
23.2
LOM Average Site Operating Costs
US$/oz
1034.7
LOM Average AISC
US$/oz
1,228
Table 2. Economic analysis summary
Commercial Parameters
UOM
Exchange Rate
USD:BRL
5.6
Corporate Tax Rate
%
25.0%
Social Tax
%
9.0%
SUDAM Tax Reduction
%
75.0%
Gold Royalty Osisko
%
1.0%
Gold Royalty Sandstorm
%
1.5%
Selling and Refining Costs
US$/oz
30.0
Table 3. Key assumptions
Resources
Overlying the primary gold mineralization at Cuiú Cuiú is an extensive zone of highly oxidized and
weathered intrusive saprolite material ("Saprolite"). Above the Saprolite, gold is present in an erosional
blanket of colluvium and other poorly consolidated sediments ("Blanket"). The PFS focuses on the
Indicated Resources within the Saprolite and overlying Blanket, where the relatively soft or poorly
consolidated material is easily excavated, and gold is highly amenable to heap leaching.
Drilling subsequent to the 2022 SLR estimate within oxidized mineralization has been used to determine
an updated resource model for the PFS. This includes Central and MG 2023 infill and step-out drilling as
well as infill and step-out drilling to determine an inaugural Machichie oxide resource, and existing
inferred resources at PDM.
This resource estimates do not include resources in the primary zone of mineralization, which account for
approximately 80% of the total resources at the Cuiú Cuiú project. The resource estimates were
prepared based on drilling completed prior to March 2024 and do not include approximately 3,693m of
RC drilling and 1,062m of diamond drilling completed since. As such, Cabral has elected to update
resources and estimate reserves in the subsequent phase prior to construction decision.
Inferred Resources are not considered as part of the PFS study. Indicated and Inferred Resources
across four known deposits are shown in Table 4.
Cut-off
Grade
Inferred Resources
Indicated Resources
0.1 g/t
Tonnes
Grade
Ounces
Tonnes
Grade
Ounces
MG
3,142,921
0.223
22,508
8,857,901
0.477
135,855
Central
3,746,684
0.408
49,151
2,255,288
0.497
36,028
Machichie
3,732,000
0.498
57,849
-
-
-
PDM
1,600,000
0.430
22,100
Total
151,608
171,883
Table 4. Indicated and inferred resources of oxide material only
Notes:
(1)
All estimates of Mineral Resources have been prepared in accordance with National Instrument 43 - 101 - Standards of Disclosure for
Mineral Projects ("NI 43-101").
(2)
The effective date is October 9, 2024.
(3)
The independent and qualified persons ("QPs") for the mineral resource estimate, as defined by NI 43-101, are Volodomyr Myadzel (P.Geo)
Principal Geological Consultant of VMG Consultoria e Solucoes Ltda. (for MG and Central resources) and Walter Dzick (P.Geo) Principal
Geological Consultant of Dzick Geosconsultants (for Machichie)
(4)
Resources are pit constrained and presented undiluted. These mineral resources are not mineral reserves.
(5)
Mineral Resources are reported at a 0.1 g/t Au cut-off grade and constrained within a $2000 pit shell.
Mining
The PFS contemplates open-pit mining using conventional methods. Initially, ore will be sourced from
two mining areas. The Moreira Gomes (MG) pit accounts for approximately 84% of the run of mine
(ROM) ore with the balance coming from the higher-grade Central Pit, approximately 6 km by road from
the location of the ROM pad. Figure 3 shows the various material movement rates for each year.
Figure 3. Material movement schedule
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Pit designs were completed at a gold price of $2,000/oz with a key driver being to maximize IRR and
margin and shorten payback and provide short-term cashflow to drive further development of the district.
The pit designs incorporated 5m bench heights and ramps of 10 m widths. Geotechnical test work
supported inter-ramp angles of 70 degrees with total pit angle of 45 degrees (including ramps).
Mining will be done using an excavator in the overhand position, loading a fleet of 25 to 30-tonne trucks
supported by a front-end loader. The oxidized resources occur within loose, weathered, blanket material
which can be mined using a dozer ripper without need for drilling and explosives.
Mining activities will likely be outsourced to one of the many full-service contract miners operating in the
Para State. Contract mining arrangements will include the provision of the entire mining fleet, including
operating labor and relevant maintenance services. Cabral will provide the fuel required to operate the
fleet from a mine site storage and dispensing facility.
Ore from the open pits will be delivered to a ROM pad within 200 meters from the exit of the MG pit.
Metallurgical results
Metallurgical test work was completed at Kappes Cassiday and Associates (KCA) in Reno NV on six
samples of oxide material from the MG and Central deposits
5
. KCA ran a series of tests on each
composite including coarse and fine milled bottle roll leach tests, compacted permeability tests, and
column leach tests.
Gold extractions in the bottle-roll leach tests generally exceeded 90% with a maximum recovery of 98%
achieved after 336 hours of leaching.
Column leach tests were conducted using material crushed to 100% passing 50 millimetres and
agglomerated with 15 to 20 kg/t of cement. To simulate the height of the proposed leach pads, the
material was loaded into 5-metre-tall, 8-inch (203 mm) diameter columns, which were then leached for
86 to 112 days with a cyanide solution.
In general, gold recoveries within the 5-metre columns were excellent, with the majority of ultimate leach
extractions achieved within the first 40 days of the cycle. All MG ore types reported high gold extraction
rates, all in excess of 90%, while Central Saprolite material reported lower but still robust gold
extractions in the low - mid 70% range (Table 5). Based on these test results and our understanding of
the ore types, Ausenco has determined the following heap leach recoveries for the different ore types
based on a 60-day leach cycle, using on/off operation.
Processing recovery using On/Off pads
% of Resources
6
% Recovery
MG Blanket
49
88.0
MG Saprolite
35
90.5
Central Blanket
6
91.0
Central Saprolite
10
72.5
Table 5. Processing recoveries by ore type
Processing
An average of 2,000 tpd of mineralized material will be treated by the Cuiú Cuiú processing plant. The
process plant will consist of a mineral sizer (MMD Sizer) fed from a ROM pad, producing an ore stream
at an 80% passing size of 50 mm (2"). The Crusher discharge will be agglomerated using cement and
barren leach solution and fed by portable conveyors to the on/off leach pads. There will be 4 leach pads
each with a capacity of 59,178 tonnes at 5 meters of stacked ore height. One or two pads will be
leaching at any open time at an irrigation rate of 12 L/h/m
2
. Pads not being leached will be in the
process of being prepared for leaching or being cleaned of spent ore. The leach cycles will average 60
days.
Pregnant leach solution (PLS) will be pumped to the carbon-in-column (CIC) circuit at an average
flowrate of 215 m
3
/h, targeting a loaded carbon Au grade of 2,500 g/t, which will be processed in a 1.5
tonne capacity Adsorption/Desorption and Recovery (ADR) plant. The ADR plant will consist of acid
wash column, elution column, carbon regeneration kiln, electrowinning cell, sludge filter press, sludge
drying oven and smelting furnace.
Once the leach cycle is complete, the pads will be completely rinsed during a 14-day period, and if
required, the solution will be detoxified using lime and hydrogen peroxide prior to initiating the rinsing
process. The current flowsheet for the project is shown in Figure 4.
Figure 4. Process flow sheet
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Access and Infrastructure
The Cuiú Cuiú project is located approximately 195 km southwest of Itaituba, a town on the Tapajós
River. The Cuiú Cuiú village lies 60km North of the regional road BR-163, which is the main supply route
for the world-scale Tocantinzinho Gold Mine. The Cuiú Cuiú access road will require an upgrade to an
all-weather gravel road to accommodate year-round servicing of the mine using 20-25 tonne loads.
The Cuiú Cuiú township is serviced by a 1,000-meter-long unpaved airstrip maintained by the company.
It provides air access to Itaituba, the project's regional supply/service town.
Cabral's main camp is located in the village of Cuiú Cuiú, adjacent to the project site. The village
consists of 80 houses and, in 2022, had a population of up to 200 families. The PFS assumes the
addition of additional lodging and other support facilities to accommodate an additional 60 workers
during both the construction and production phases.
Power for the village and the project will be provided by a diesel generator bank.
One of the benefits of a
heap leach operation is the relatively low energy intensity and a lack of need to build grid connection
infrastructure at this early stage.
Mining Permits
The Project is predicated on the current Trial Mining Licenses, which include a limit in ore processing of
300,000t/year project area. In late 2023, a request was made to increase the processing rate under the
Trial Mining License to 500,000t/year. This request received a positive technical review
7
and now awaits
final approval through a vote from the Federal Directors of the ANM later in 2024 or early in 2025. Once
granted, this Trial Mining License will be valid until November 2027.
Applications for the environmental license on the full mining license were made in December 2020, and
SEMAS/PA is expected to finalise this application in early 2025. This will support the issue of the
Preliminary Licence (LP) in late 2025 and, subsequently, the Installation Licence (LI) in late 2026 on the
full mining license. This will allow for an increase in production volumes as proposed in the PFS
production plan from 500,000t/year in 2026 to 720,000t/year in 2027.
Operating Costs
Operating costs were derived using key operating design parameters, unit cost assumptions and
estimates for manning and indirect costs. Pricing for reagents and consumables was solicited from
qualified local suppliers and reflects the expected pricing for the project.
Mining costs were based on offers received from suitably qualified Civil Engineering companies offering
contract mining services. The proposals included a complete service, including equipment hire,
operating staff, and mobilization and demobilization. Cabral will supply fuel to the mining fleet. The
unitized cost of the complete service is estimated at US$4.15/tonne of material moved. Following a
more detailed negotiation with preferred contract miners, a firm figure will be available in the next phase.
A detailed breakdown of the Mine's operating costs is shown in Table 6.
Item
LOM
US$ M
LOM
US$/oz
Mining
25.8
356
Processing
47.1
650
Site G & A
2.0
28
Selling Costs
2.2
30
Royalties
6.4
89
Operating Cash Costs
83.6
1,154
Sustaining Capital Expenditure
5.4
75
AISC
89.0
1,228
Table 6. Operating costs breakdown
Capital Costs
The capital cost estimate was compiled based on the proposed plant design by Ausenco.
Approximately 70% of the direct costs within the PFS capital cost estimate are based on supplier
quotations.
A priority for the detailed engineering phase is finalizing these costs through detailed engagement and
negotiation with preferred suppliers.
The total Initial capital cost estimate is US$37.4 million including a 10% allowance on all materials and a
20% Contingency on all direct and indirect Costs. A detailed breakdown of the initial capital costs is
shown in Table 7.
Area
Detail
US$
Process Plant
Heap Leach Pads
7,918,623
Process Equipment
8,596,291
Infrastructure
Onsite
2,778,340
Offsite
1,492,930
Earthworks
4,826,716
Indirect Costs
4,954,958
Owners Costs
574,179
Project Contingency
6,228,407
Total Initial Capital Expenditure
37,370,440