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Gold mining

Future Avenir Corp. Acquires Gold Property in Brazil

Strategic Insights

— 2 min read

Future Avenir Corp. has made a significant acquisition through a transaction with Consolidated Madison Holdings Ltd., acquiring and optioning a 5,000 hectare gold property in North Central Mato Grosso State, Brazil. The property has been the focus of informal individual miners, known as garimpeiros, who have produced an estimated 30,000 to 50,000 ounces of gold since 1986. With its acquisition, Future Avenir is poised to bring modern technology and methods to develop the property's full potential, capitalizing on the merits indicated by the primitive garimpeiro mining.

Key Takeaways:

  • The gold property spans 5,000 hectares in North Central Mato Grosso State, Brazil, with a history of informal mining by garimpeiros producing an estimated 30,000 to 50,000 ounces of gold since 1986.
  • The garimpeiros' mining activities were characterized by open-pit mining, with some pits producing 20 kilos of gold per month at a recovered grade of 15 g/ton, and a high-grade vein along a 35m. deep shaft yielding a recovered grade of 20 g/ton.
  • Consol. Madison Holdings Ltd. acquired the property for US$200,000, with a 2 percent NSR royalty for open-pit mining and a 0.8 percent NSR for underground mining.
  • Future Avenir Corp. has the option to earn a 50 percent or 75 percent interest in the property by meeting specific payment milestones, including spending US$300,000 in exploration and development within six months and a further US$500,000 within 18 months.
  • The company has also negotiated private placements to provide funding for the proposed acquisitions, issuing 1,200,000 Units at a price of $0.75 each. Each Unit consists of one Class A share and a warrant to purchase an additional Class A share.
  • Management has also issued 900,000 incentive options to purchase Class A shares at a price of $1.00 per share, with a total of 1,500,000 common shares under option.

Statistics:

  • Estimated gold production by garimpeiros: 30,000 to 50,000 ounces since 1986.
  • Recovered gold grade in one pit: 15 g/ton.
  • Recovered gold grade from high-grade vein: 20 g/ton.
  • Acquisition costs by Consol. Madison Holdings Ltd.: US$200,000.
  • NSR royalty for open-pit mining: 2 percent.
  • NSR royalty for underground mining: 0.8 percent.
  • Option payment for 50 percent interest: US$300,000 (in cash or shares) and US$300,000 in exploration and development within six months.
  • Option payment for 75 percent interest: spending US$2,400,000 in exploration and development.

Sources:

  • Future Avenir Corp. press release, May 29, 1995
  • Consolidated Madison Holdings Ltd. (Madison)
  • Business Wire (date not specified)

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