 |  |
Arapiraca Project
View 43-101 Techncial Report
The Arapiraca Project (the "Project"), located in the central-southern part of the Brazilian State of Alagoas, approximately 15 kilometres northwest of the town of Arapiraca and currently consists of 101 exploration licenses totalling approximately 190,000 hectares, one application for an exploration license of 2,000 hectares and one application for a mining concession of 390 hectares. Infrastructure in the area of the Project is excellent with electric energy, communication and transportation networks, including paved highways and railroad, all located within the property boundaries of the Project. The rail line links directly to three deep sea ports which are capable of shipping iron ore. The rail line and port systems (see Serrote da Laje - Rail and Ports Photo Section) are key to the development of the iron potential of the Arapiraca Project. This in-place infrastructure will allow the Company to access iron markets without having to invest the high capital normally required for iron-ore projects. The rail line is owned by Companhia Ferroviária do Nordeste (see Serrote da Laje - Rail and Ports Photo Section) and is currently undergoing a US$50 million upgrade which will be complete in mid-2009. A fourth port, Maceió, is some 120 kilometres by road from the Project.
The Arapiraca Project has one advanced stage deposit, Serrote da Laje, and several exploration targets with the most advanced being Caboclo.
Serrote da Laje (see Serrote da Laje Photo Sections)
Copper was first discovered in the region following the completion of geological and airborne geophysical surveys by the Brazilian Geological Survey in 1977. In the early 1980's Companhia Vale do Rio Doce ("CVRD") followed up geophysical anomalies from these surveys with ground geophysical surveys, stream sediment and soil sampling to identify targets of interest. In 1982, a promising copper-gold-iron ore occurrence was discovered at Serrote da Laje (Rocky Ledge Hill). CVRD completed 89 drill holes totaling 16,897 metres in two drilling campaigns in the 1980's and 1990's defining a copper-gold-iron ore deposit extending from surface to 300 metres in depth over a 500 metre by 800 metre area. Drilling was generally at 100-200 metre spacing.
In April 2007, the Company retained Watts, Griffis and Ouat Limited ("WGM") to conduct a technical due diligence study on the Project and to prepare a National Instrument 43-101 ("NI 43-101") compliant report. WGM confirmed that the Serrote da Laje zone contained an Inferred Mineral Resource of 111 million tonnes at 0.55% Cu and 0.16 g Au/t, using a 0.2% Cu cutoff grade. Nickel and iron values were not included in this resource but will be included in all future resource calculations.
The copper-gold mineralization occurs mainly disseminated within layered norite to gabbro complexes and hosted primarily within massive to semi-massive magnetite. At Serrote da Laje, the mineralized material contains several other metals that the Company believes may constitute possible valuable by-products. These include iron contained in the magnetite (magnetite comprises as much as 50% of the deposit in parts), nickel (average 0.1%), vanadium (average 0.08%), and gallium (average 72 ppm) and small amounts of palladium and platinum. The iron appears to be an abundant, easily enrichable potential by-product that could add significant value, particularly in light of the nearby rail and port infrastructure.
The Company commenced drilling on Serrote da Laje in Q2/2007 and now has three drill rigs working on the deposit. The current program is to complete 20,000-30,000 metres of drilling on Serrote da Laje to the end of 2007. Drilling is generally designed to infill the previous 100 metres and 200 metres spaced drilling completed by CVRD. Furthermore, the southern and eastern extensions of Serrote da Laje have undergone little or no drilling and a recent ground magnetometry survey has identified drill targets in these areas. Recent drilling appears to confirm that the deposit is open in these zones and this could significantly extend the Serrote da Laje deposit.
This years' drilling, and the following study and work programs, are structured to target an up-date of the resource estimate and the issuing of a preliminary economic assessment in early 2008.
Results of the drilling to date (see press releases dated September 4, 2007 and November 14, 2007) have been very encouraging. The geological model appears to be very consistent and furthermore there is strong evidence of a high grade core that will greatly enhance project economics.
Sample Preparation Laboratory (see Serrote da Laje - Sample Prep Lab Photo Section)
Due to the high volume of ongoing and planned drilling at Arapiraca and also due to the delays currently being experienced in local assay laboratory facilities, the Company decided to construct an on-site independently operated sample preparation facility. This facility is being independently supervised by SGS Geosol Laboratories Limitada and will reduce the turn-around for assays. Quality assurance tests have recently been completed and the facility is fully operational.
Metallurgical Testwork
In the 1980's, CVRD completed several bench scale metallurgical tests which indicated recoveries up to 92% for copper and 68% for gold, producing concentrates containing 38% to 42.2% copper. CVRD testwork also recovered 75% of nickel into a separate nickel concentrate.
Testwork was also completed on the recovery of magnetite from tailings. Preliminary results showed that a high grade (+60%) magnetite product could be produced. CVRD also completed testwork on the recovery of Vanadium and Gallium.
The Company has recently commissioned GRDMinproc to commence a comprehensive metallurgical testwork program, including: Crushing and abrasion testwork; Grinding testwork; Flotation testwork on copper, gold and nickel; and Magnetite recovery testwork. This work will form part of an overall program for the upcoming feasibility study planned for 2008.
Environmental Baseline Studies and Permitting
The Company has recently hired a full-time Environmental Manager for the Project and has retained Brandt Meio Ambiente as its environmental consultants. The Project baseline study program commenced in September 2007. Of note, CVRD did not identify any critical issues in their environmental baseline studies completed in the 1980's and 1990's. CVRD also submitted a mine license application which is still in good standing and being transferred to Aura's Brazilian subsidiary.
The Project is only 5 kilometres from a rail line linking Arapiraca to three major industrial ports, one to the north (Suape) and two to the south (Aracajú and Aratu), all approximately 325 kilometres by direct rail line. A fourth port, Maceió, is some 120 kilometres by road from the Project. The Company has contracted Planave S.A., a Brazilian logistics company, to evaluate logistics for concentrate transport and shipping. This study will evaluate the road, rail and port infrastructure options to support the annual shipments of copper, nickel and iron concentrates.
In addition, the Company has retained ENECEL Energia, Comercialização e Consultoria Energética Ltda., a Brazilian energy consulting company, to evaluate electrical supply options and costs for the Project.
Other Work Programs
Work has commenced on many aspects to support the completion of a preliminary economic assessment early in 2008 leading to a full scale feasibility study by the end of 2008. The Company has retained VOGBR to conduct mine geotechnical, hydrology, and hydrogeology studies. VOGBR are also completing water balance and water supply option studies on the Project.
Regional Exploration
CVRD completed limited regional exploration programs to identify other deposits similar to Serrote da Laje.
An airborne magnetic and EM survey defined over 30 outlying targets. CVRD then completed a limited reconnaissance drill program which focused on two targets, Caboclo and Lagoa do Algodão (24 holes totaling 3,185 metres). The remaining 30+ targets are largely unexplored and have yet to be drilled.
Regional Exploration - Caboclo (see Caboclo Photo Section)
At the Caboclo target, 15 kilometres north of Serrote da Laje, CVRD drilled 18 holes over a 3.5 X 4.5 kilometre surface area. Several holes encountered significant mineralization. This target is open in all directions and the Company has recently commenced a follow-up exploration program. Phase 1 of this program, 250-line kilometres of ground magnetometry, identified a major target and three smaller satellite targets (see Caboclo Photo Section). The Company has commenced a 3,000 metre program to the end of 2007. The Company will then evaluate these results in order to plan a more extensive program in 2008. First results are expected in December 2007.
Regional Exploration - Other Targets (see Regional Photo Section)
The Company has launched a program to review and explore the more than 30 other targets in the area covered by its license holdings, which total more than 190,000 hectares.
This regional program consists of surface geochemistry sampling and geological mapping. Concurrent with this, detailed ground magnetometer surveys will be completed. Targets will then be prioritized for future drill programs. Drilling is expected to commence in late 2007 or early 2008.
| Home | Corporate | Properties | Investors | QwikReport | Contact | Disclaimer |
