Mundo Minerals Limited is an Australia-based company that is engaged in development of the Engenho gold project in Brazil and the Torrecillas gold project in Peru, and gold exploration in Brazil and Peru.
Mundo Minerals encouraged by second satellite gold discovery at Engenho in Brazil
Mundo Minerals (ASX: MUN) has confirmed the potential for a second significant zone of satellite gold mineralisation at Olhos, approximately 1km north-east of its Engenho Gold Mine in Brazil, following successful surface sampling and auger drilling.
The Olhos target lies immediately south of the Crista Project – which is on track to be brought into production by August 2010 as a key source of new open pit satellite ore feed to the Engenho Plant – and forms part of an emerging regional satellite production area.
Surface sampling has defined two distinct zones of mineralisation, the first extending over a strike length of approximately 250 metres at Olhos North, and the second over a strike length of approximately 170 metres at Olhos South.
Surface sampling returned significant widths of gold mineralisation at Olhos North with best individual samples including 0.95m @ 36.7g/t Au, 8.0m @ 2.1g/t, 5.5m @ 11.6g/t, 9.0m @ 2.8g/t and 1.5m @ 11.6g/t. At Olhos South, samples included 3.8m @ 5.7g/t Au, 2.0m @ 4.2g/t, 2.2m @ 3.5g/t, 1.8 @ 5.2g/t and 3.7m @ 5.7g/t.
An initial round of auger drilling targeting the central portion of the Olhos North Target has confirmed the presence of multiple plunging lodes of high-grade gold mineralisation associated with these surface samples. The lodes are similar in style and orientation to those occurring at Crista immediately to the north.
The down-hole intersections correlate strongly with the surface samples, providing a high degree of confidence in the ability to define high-grade resources at Olhos with additional close-spaced drilling.
Given the success of this initial program, Mundo Minerals is planning to commence a follow-up program of diamond drilling in mid-April to drill out the Olhos North Target with a view to establishing JORC compliant resources.
The Company said it is encouraged by the results from Olhos, which further strengthen the potential for a substantial satellite production centre in the Crista-Olhos area and reinforce the prospectivity of the Engenho tenements for the discovery of additional high-grade deposits within a 1-2km radius of the Engenho mill.
High-grade rock chip samples have also been returned previously from the Mazoca area, located immediately west of Olhos, which remains a priority area for exploration targeting.
The recent exploration success at Olhos has not been factored into the production profile for the Engenho Project, which is ramping up production from approximately 25,000 ounces per annum currently to around 46,000 ounces per annum with the imminent development of the Crista Project. This provides a strong platform for the development of the Company’s other assets, including the high-grade Torrecillas Project in Peru.
Mundo Minerals has advised that pit optimisations are currently being completed for the Crista Project based on the initial Inferred Resource of 161,948 tonnes @ 5g/t Au for 26,034 ounces of gold announced in the December Quarterly Report.
The initial resource was calculated based on drilling to a depth of only 80 metres below surface and using a 2.5g/t cut-off grade to support the first two years of production. The resource is expected to increase as mining advances.
Drilling has confirmed that the Crista lodes dip at approximately 60 degrees to the east, suggesting that mining within the tenement boundary may extend for longer than the three years originally envisaged. Negotiations are continuing to consolidate ownership of the adjoining tenement.
The Company is currently completing all required approvals to enable development of the Crista Project to proceed to achieve its target of commencing production from an initial open pit mine by August 2010. The ore mined at Crista will be blended with underground ore from Engenho to increase production from the mine to around 46,000 ounces per annum.
Mundo Minerals has identified a second hand ball mill as part of the proposed upgrade of the milling capacity of the Engenho. This upgrade includes additional milling and tankage capacity as well as the introduction of a gravity circuit which is expected to recover 35-55% of the gold from the underground ore bodies.
