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Crusader Resources' gold bounty at Borborema hits 2.3m ounces

Crusader Resources' gold bounty at Borborema hits 2.3m ounces

Crusader Resources (ASX: CAS) has grown the gold resources at its wholly-owned Borborema Gold Project in Brazil by 24% to 2.31 million ounces, which on projected gold production would rank it as one of the five largest gold mines in Brazil.

The new JORC Indicated and Inferred Resource, using a 0.50 g/t cut-off grade, confirms 68 million tonnes at 1.06 grams per tonne (g/t) for 2.31 million ounces of gold.

Drilling continues to define the gold mineralisation which is open in all directions.

The 55% increase in the overall tonnes indicates that Crusader has the makings of a long-life, large scale mine at Borborema.

The new resource will feed directly into a Bankable Feasibility Study (BFS) which is a necessary precursor to developing the gold mine and more drilling is still required.

The company has five rigs operating 24 hours a day with the objective of expanding the resource further, which extends down to about 350 metres below surface, a depth considered potentially realistic for open pit mining.

An additional 17,000 metres have been drilled since compiling the resource and a further resource update is expected to be completed in the first half of 2012.

Open pit optimisations and subsequent mine plans will now commence, with the results to be used in the BFS, scheduled to commence shortly.

In addition, an updated exploration target of 0.35 to 0.65 million ounces has been set based on extending the mineralised envelope up to 75 metres beyond the present Inferred Resource limits.


Cash flows from sales from high grade ore from the Posse iron ore project, are due in early 2012, potentially underwriting near term Borborema Gold exploration and feasibility.

A BFS is due to be initiated in the fourh quarter of 2011. PFS results were favourable, highlighting an NPV of $250 million (at gold price of just $1,300/ounce) and an IRR of 32.9%. These are likely to become even more favourable moving ahead.

At a projected annual production of 131,000 ounces of gold, Borborema is no laggard and would rank in the top five of Brazilian gold producing mines. No mean feat in a group that includes Kinross (NYSE:KGC), AngloGold Ashanti (NYSE:AU) and Yamana Gold (TSX:YRI).

Dundee Corporation owns 19% of Crusader, an institution that knows a thing or two about successful gold company investment.  The current resource upgrade at Borborema makes the current valuation even more appealing to long term investors.

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