Brazilian gold mining camp attracts Lysander

Though it ranks as the world’s seventh-largest producer of gold, Brazil has been largely ignored by the current crop of Canadian juniors attempting to gain exposure to South America’s historic mining camps.

Vancouver-based Lysander Gold (VSE), however, is an exception, having already emerged as an active player in the country. The company’s efforts are focused on the Quadrilatero Ferrifero (Iron Quadrangle), in the State of Minas Gerais, Brazil’s most important gold mining region.

Lysander recently secured rights to acquire the Passagem mine, a former producer that has already yielded more than 1.1 million oz. gold. Its other projects include Cata Preta (scheduled to reach production within 24 months) and Carrancas (slated for further exploratory drilling).

Spearheading these initiatives is Lysander director Stephen Sopher, previously managing director of Inco’s South American subsidiary and executive vice-president of TVX Gold.

“We were lucky to get in ahead of the competition because we are now seeing a number of Canadian juniors looking around in Brazil,” Sopher tells The Northern Miner. “It is hard to believe we secured the ground position we did, in the best-known mining camp in Brazil. We see fantastic potential here.” Sopher is particularly bullish about the potential of Passagem, which began operating in the early 18th century and continued intermittently until 1974. During this period, more than 1.1 million oz. were produced by relatively primitive mining methods. It has been, after Anglo-American’s Morro Velho, Brazil’s leading gold producer.

Lysander is of the view that, based on the volume mined in the past and the potential for extensions along strike and downdip, Passagem still contains up to 2 million oz. gold. Records show that 4.4 million tons grading 0.248 oz. gold per ton were previously mined, although the actual head grade was believed to be closer to 0.3 oz.

Lysander has entered an agreement-in-principle to acquire an 80% interest from a private company owned by a Brazilian family. “I started negotiating for this property 20 years ago (for Inco),” Sopher says, adding that the current owners preferred to strike a deal with a growth-oriented junior. The transaction (still subject to a definitive agreement and regulatory approval) will involve Lysander paying US$325,000 in stages, issuing 750,000 shares in stages, and spending US$3 million on exploration within 30 months. The junior must also arrange production financing (subject to a bankable feasibility study).

The Passagem deposits are stratabound and correspond stratigraphically to the Batatal formation of the Precambrian Minas series. They are reported to lie concordantly between the clastic sediments of the underlying Moeda formation and the chemical sediments of the overlying Caue formation (dolomotic itabirites).

At Passagem, the Minas series forms an easterly plunging anticline about 3 miles wide. The principal mine sits on the nose of this anticline, with another three mines and old workings situated along its flanks. These mines and old workings cover only half of the 4.3-mile length of the main mineralized horizon. The total property comprises more than 16 sq. miles. Lysander is planning a 2-stage drill program totaling 72,160 ft. The first stage will test for shallow extensions of known mineralization and for extensions at depth, while the second phase, to consist of 49,200 ft., will attempt to prove up a minable reserve.

Work programs are also being planned for the Cata Preta project (referred to as “Black Workings” because the gold is in manganese oxide), which has a production history dating back to the 1690s.

This project was previously explored by Western Mining, which outlined a potentially open-pittable resource of

1.6 million tons grading 0.102 oz. per ton. Metallurgical tests point to recoveries of 90%, with much of the gold amenable to recovery by gravity separation.

Exploration work on the Carrancas property will include drill-testing a large (1.2-mile-long), geophysical and geochemical anomaly. Lysander has rights to 100% of these two projects.

Closer to home, Lysander is exploring the Lorraine copper-gold project in British Columbia. Recent drilling yielded several high-grade intercepts, including 302 ft. of 1.48% copper and 0.019 oz. gold per ton. In addition, the company plans to carry out more work at its Cat property, in the same province.

Meanwhile, in the Northwest Territories, Echo Bay Mines (TSE) is working to earn an interest in Lysander’s OP property, situated near the former’s Lupin gold mine.