Safety Medical Products (ASX: SFP) has completed initial geological, commercial and legal due diligence on Kisara Gold and expects to execute a share sale and purchase agreement before the end of the year.
The company previously entered into a Heads of Agreement to acquire 100% of Kisara, which owns the Silvina gold project through 99% owned Brazilian subsidiary Mineração Caiçara Ltda.
Safety Medical Products will also now acquire a newly granted project – the Itapicuru Norte Gold Project, with Companhia Baiana de Pesquisa Mineral gazetting the award of project to Mineração Caiçara Ltda last week.
Norte comprises 15,421 hectares of ground, Dexai Block and Taraugo Block, covering parts of the Rio Itapicuru Greenstone Belt, a known gold producing province in Bahia state, Brazil.
Historical data has indicated ongoing small scale gold production by garimpeiros on the Deixai trend, as well as a series of historical soil geochemical anomalies ranging up to 856 parts per billion gold, 484 parts per million (ppm) copper and 448ppm arsenic over 11 kilometres of strike.
These results were consistently supported by rock chip samples of up to 29.56 grams per tonne (g/t) gold; trenching which produced up to 7.81g/t gold, but was never drilled; and anomalous historical reverse circulation drilling results.
These drilling results included 2 metres at 10.39g/t gold from 128 metres, 12 metres at 2.39g/t gold from 88 metres and 4 metres at 5.76g/t gold from 84 metres.
Two operating gold mines, C1 Santa Luz and Fazenda Brasileiro – both Yamana Gold operations, exist within 30 to 80 kilometres of the Norte blocks
The Fazenda Brasileiro Gold Mine has been operating for over 20 years and has produced well over 1 million ounces of gold to date and has consistently replaced its mineral reserves as they have been mined.
In 2011 the mine produced 55,163 ounces of gold at an average cash cost of $937 per ounce as an underground operation.
Meanwhile, Safety Medical and Minerãçao Caiçara are currently finalising plans for the 2013 exploration program which will include airborne magnetic and electromagnetic survey and surface reconnaissance trenching and soil sampling.
A first pass diamond drill program totalling 2,500 metres across 16 holes has been planned for completion during the first phase of work.
The program will test four of the most promising prospects while reconnaissance fieldwork and target generation activities are underway.
Proactive Investors Australia is the market leader in producing news, articles and research reports on ASX “Small and Mid-cap” stocks with distribution in Australia, UK, North America and Hong Kong / China.