BRAZIL

A supplement to Mining Journal

INTRODUCTION

A message from the minister

Mr Miguel Nery, director general of The National Department of Mineral Production (DNPM)

CONTENTS
Introduction and country overview Geology Law Geological map of Brazil Key contacts Company proles Ashburton Minerals Brazilian Diamonds Mirabela Nickel Sola Resource St Andrews Mining (Angus & Ross) Vaaldiam Resources Yamana Gold 3 6 7 8 16 9 10 11 12 13 14 15

HE interest shown by trans-national corporations in the Brazilian mining sector is closely associated with the geological diversity found in a country which covers over 8.5 million km2. Brazil possesses international class deposits and mines, which derive from a combination of quality deposits (by volume and content), competitive operational costs and the ready availability of energy. The countrys mining sector is going through a phase of real euphoria following the minerals boom, which has led to an increase in net foreign direct investment. The stability of the national economy, as shown by the successive drops in the sovereign-risk index, and the countrys competitive position in the world market, has attracted investors and boosted their condence in the country. Brazil is waiting with open arms for all those that want to invest in mining here.

Published in July 2007 by: Mining Communications Ltd Albert House, 1 Singer Street London EC2A 4BQ Tel: +44 (0)20 7216 6060 Fax: +44 ( 0)20 7216 6050 E-mail: editorial@mining-journal.com Website: www.mining-journal.com Supplement editor: Peter McCready Design and production: Hannah Talmage and Vickie Johnstone Printed by Stephens & George, Merthyr Tydl, UK Mining Communications Ltd 2007

July 2007 Mining Journal special publication Brazil

COUNTRY OVERVIEW

South American powerhouse

BY CELSO PINTO FERRAZ

RAZILS mining sector grew by 7.3% last year, compared with 2.8% growth in industrial output, showing the important role that mineral extraction has for this South American powerhouse. Iron-ore exports made a major contribution to the economy, and the number of new mine projects and expansions in progress should ensure that Brazil retains its leading position in global production for years to come. Strong world prices for other commodities are also encouraging many mining companies to proceed with expansion plans. Brazils National Department of Mineral Production (DNPM) issued 12,871 exploration licences last year and 437 mining authorisations, bringing the total issued to 3,743 since 1988. The government collected BR55 million (US$28 million) in fees for occupation of mineral areas, which corresponds to 38.8 million ha. The main corporate development has been the acquisition by Companhia Vale do Rio Doce (CVRD) in January 2007 of Inco Ltd, the worlds second largest nickel producer. The total cost of the acquisition was close to US$19 billion and makes CVRD the second largest diversied metals and mining company in the world, the largest metals and mining company in the Americas, and one of the largest private sector companies in Latin America by market capitalisation. In Brazil, CVRD operates a large logistics system, including railroads, maritime terminals and ports that are integrated with its mining operations.

IRON ORE
In 2006, Brazils marketable iron ore production was estimated to have been about 350 Mt. The value of

iron ore exports grew by 23% whereas the value of Brazils total exports grew by over 16%. Iron ore exports rose to 242 Mt, worth US$8.95 billion and representing 6.5% of the total value of Brazilian exports of US$137.5 billion. For the seventh consecutive year CVRD set a sales record, increasing iron ore sales by 8.2% in 2006 to 276 Mt. In September 2006, new mine Brucutu in Minas Gerais came on stream, producing 7.7 Mt. It is expected to produce 23 Mt this year and reach full capacity of 30 Mt/y in 2008. The company is undertaking a US$1.8 billion production expansion at Carajs to 130 Mt/y which will include a primary crushing plant, processing and classication units, locomotives and wagons. Engineering studies will be completed in 2007 and the project is due to nish in 2009. Minerao Brasileiras Reunidas increased production by 19%, to 61 Mt. Its exports were up 20%, to 47 Mt. In the state of Mato Grosso do Sul, Rio Tintos 100%-owned subsidiary, Minerao Corumbaense Reunida, increased output by 40%, to 2 Mt. MMX Minerao & Metlicos SA (EBX Group) has three production plant projects: the MMX Corumb System, the MMX Amap System and the MMX Minas-Rio System. The MMX Corumb System started iron ore production in December 2005. The MMX Amap and Minas-Rio Systems are in the nal phase studies. Annual output at MMX Corumb should reach 2.7 Mt in the rst stage and 4.9 Mt in the second stage with the construction of another processing plant. To complete the system, a 400,000 t/y pig iron plant is being built this year as well as a 500,000 t/y semi-nished goods plant. The MMX Amap System encompasses the Amap mine and the Amap railroad. The project also includes the construction of a pig iron plant, a semi-

nished goods factory and a port terminal in the Santana municipality. With an iron ore production potential of up to 6.5 Mt/y, the start-up of operations at the Amap mine is due for the second half of this year. Its estimated annual pig iron output should exceed 2 Mt as from April 2008, with 0.5 Mt earmarked for the production of semi-nished goods, and the remaining 1.5 Mt earmarked for export. The MMX Minas-Rio System has iron ore deposits in Minas Gerais, a 550 km slurry pipeline to a port terminal in the State of Rio de Janeiro and a pellet plant currently under construction. Production is planned to start-up during the rst half of 2009, with the pellet plant coming on stream in 2010. The system is based on vast iron ore reserves and resources of around 714 Mt. With a capacity of 26.6 Mt/y (dry basis), the pipeline will carry ironore slurry from the mine to the port of Au at So Joo da Barra. When operating at full capacity, the system will produce 26.6 Mt/y of ore, with 19 Mt/y of pellet feed and 7.6 Mt/y used to produce iron ore pellets. MHAG Servios e Minerao is developing an ironore mine in Jucurutu, Rio Grande do Norte, and made its rst shipment from the port of Suape in January this year, when 75,000 t of ore were sent to China. The goal is to produce up to 200,000 t/mth over ten years and to export at least 1.2 Mt/y. Bahia Minerao Ltda intends to construct a mine and concentrator near the city of Caetit, a 400 km iron-ore slurry pipeline, a pellet plant and a port. The initial capacity cost of the project, based on the production of some 7 Mt/y of iron ore pellets, is estimated at around US$1 billion. Preliminary estimates of reserves in blocks I, II and III are of the order of 7,000 Mt (haematite and itabirite). Reserves in block III, which will be the main focus of the current work, are estimated at 1,000 Mt.

July 2007 Mining Journal special publication Brazil

COUNTRY OVERVIEW
BAUXITE
Despite a drop in exports in 2006, Brazil is still a world leader in bauxite production. Marketable output grew last year by an estimated 3.3%, to 22 Mt. Volume of exports decreased 30% to 5.3 Mt and with a corresponding value decrease of over 15% to US$194 million. As a result of the start up of new mines, bauxite production could double by 2009. Minerao Rio do Norte (MRN) accounted for 17.8 Mt of total bauxite production last year, a 3.4% increase on 2005. Of the total tonnage, 13.6 Mt (79%) was destined for the domestic market and 3.5 Mt (21%) for export. Through Aluvale, CVRD has a 57% interest in Alumina do Norte do Brasil SA (Alunorte), which commissioned a new bauxite mine at Paragominas in the state of Par in the March quarter of 2007. The mine will supply Alunortes new renery expansion with 5.4 Mt/y of bauxite (12% moisture) through a 244 km slurry pipeline. The bauxite quality will be similar to that at MRN. The CVRD board has approved a US$196 million further expansion at Paragominas. When the expansion is complete, the Paragominas mine should achieve a nominal production capacity of 9.9 Mt/y by the June quarter of 2008. In the far west of Par, Alcoa is implementing the Juruti project for mining and processing of bauxite. With reserves of 280 Mt, annual production at Juruti is due for completion in 2008 and is expected initially to produce 2.6 Mt/y. CBA, a Votorantim Group subsidiary, is about to open its Mira mine in the Zona da Mata region of the state of Minas Gerais. The rst of three phases of the project is expected to produce 1 Mt/y of bauxite and the project includes a new concentrator.

GOLD
As expected, Brazils gold production in 2006 dipped slightly to 43 t. Mining companies produced 29 t, with garimpero operations accounting for the remainder. Gold exports rose by 8% to 33 t, worth US$658 million, from 30 t (worth US$459 million) in 2005. Gold output in 2007 is expected to rise as a result of expansions and new mines reaching full capacity. AngloGold Ashantis US$180 million Cuiab expansion seeks to extend the mine life by six years. The mine will be deepened from 11 to 21 levels and ore production will increase from 830,000 t to 1.3 Mt/y. Gold output will increase by 37% from 190,000 oz to 260,000 oz/y. In the nal year of the expansion programme, production is expected to reach 300,000 oz. The companys Crrego do Stio underground sulphides project is exploring the viability of exploiting a number of sulphide orebodies. The project is expected to produce 1.4 Moz of gold over 14 years from 6.8 Mt of milled ore. This year,Yamana Gold Incs Chapada mine will achieve its rst full year of operation and Serto Mineracao will close its Serto mine. Over its life, the mine has yielded 225,054 oz of gold at a spectacular grade of about 29 g/t Au. Mining has now moved to the Antenna Cluster area at the Xupe mine.

COPPER
Brazils production of copper in concentrates in 2006 is estimated at 140,000 t (2005:133,300 t). CVRDs Sossego mine produced 117,000 t and Minerao Caraiba SA (MSB group) 23,000 t. Production of copper metal rose by over 10% to 219,684 t, all produced by Caraiba Metais (Paranapanema Group). CVRD is developing two copper projects: Salobo

and Project 118. The feasibility study for the Salobo project was concluded in January 2007. The mine will require an investment of US$855 million and the start-up of development is contingent upon an appropriate tax structure, which is under discussion with government authorities. In its rst stage, Salobo is expected to produce 100,000 t/y of copper in concentrate. A preliminary licence for Project 118 was obtained in April 2006 and key equipment was ordered at the end of the year. The estimated total cost is US$232 million and production capacity will be around 36,000 t/y of copper. Operations are scheduled to begin in the rst half of 2009. At its Sossego mine in Carajas, the company is constructing a US$58 million semi industrial-scale plant for copper processing. Usina Hidrometalrgica de Carajs (UHC) will produce copper cathode using hydrometallurgical technology based on pressure oxidation followed by atmospheric leaching, solvent extraction and copper electro-winning. In the State of Goias,Yamana Gold Inc completed construction of the Chapada open-pit copper-gold mine in December 2006. Around 16 Mt/y of ore is being mined, and copper/gold concentrate production is projected at 180,000-200,000 t/y. Concentrate is shipped to third-party smelters for processing into copper and gold metal. Caraba Metais (Paranapanema group) plans to invest US$150 million to increase its production of primary copper metal from 218,000 t to 280,000 t, beginning in 2009.

DIAMONDS
Presently 92% of the diamonds and other gemstones are mined by diggers (garimpieros) and only 8% by mechanised formal operations.

MINERAL PRODUCTION
Commodity Iron ore (Mt) Bauxite (Mt) Coal1 (Mt) Phosphate2 (Mt) Manganese2 (Mt) Copper3 (t) Tin3 (t) Chromium4 (t) Nickel5 (t) Potassium6 (t) Zinc3 (t) Gold (kg) Asbestos (t) Kaolin2 (Mt) Gypsum (Mt) Magnesite7 (t) Natural gas (Mm/d) Petroleum (Mbbl/d) 2004r 270 21 5.37 6.2 3.1 102,500 12,467 445,000 31,998 382,800 167,735 42 252,100 2.37 3.2 316,000 42,146 1,492 2005p 345 22 6.48 5.6 3.5 132,500 11,035 394,000 36,562 384,600 175,407 44 250,000 2.37 3.2 324,000 43,531 1,684 2006p 350 22.7 6.22 6.0 3.0 140,000 9,265 400,000 36,224 438,600 184,189 43 230,000 2.60 3.0 350,000 43,975 1,777

Source: DNPM/DIDEM, SMM/MME, SNIEE and Petrobras (modied by author) r revised; p provisional; 1 marketable coal; 2 concentrated or beneciated; 3 metal content; 4 lump and concentrate; 5 electrolytic nickel, metal content in ferro-nickel alloy and in matte; 6 K2O content; 7 sinter and refractory

July 2007 Mining Journal special publication Brazil

COUNTRY OVERVIEW ZINC

Zinc metal output in 2006 rose 2% to 272,333 t. Votorantim group is the only Brazilian zinc producer through two subsidiaries. Cia Mineira de Metais produced 184,179 t (68% of the total) up 4% from 2005 and mainly from domestic concentrates treated at the Tres Marias metallurgical plant. Cia Paraibuna de Metais at the Juiz de Fora complex in Minas Gerais produced 88,154 t (34% of the total) and relied entirely on imported concentrates. To date, diamonds have been discovered in more than 40 districts in 11 out of the countrys 26 states. Some 300 kimberlite diamond pipes have reportedly been found. Companies such as De Beers, Rio Tinto and BHP Billiton have spent money and long periods of time exploring the country for kimberlites, mostly in the states of Mina Gerais, Rondnia and Sao Paula. These companies have since sold their properties and databases to local or Canadian companies and left the Brazilian diamond industry. Among such diamond exploration companies now involved in Brazil are Bontan Diamond Corp, Brazilian Diamonds Ltd, Canabrav Diamond Corp, Diagem International Resources Corp, Emerging Africa Gold, Majescor Resources Inc, MinMet plc, River Diamonds plc, Sola Resource Corp, Southern Era, Trans Hex International, Vaaldiam Resources Ltd and Verena Minerals Corp. alloys and nickel in matte was 36,224 t in 2006, 0.9% lower than in 2005. Cia Niquel Tocantins (Votorantim group) produced 21,338 t of electrolytic nickel, and Codemin (Anglo American plc) produced 9,813 t. Minerao Serra da Fortaleza (Votorantim Group) produced 5,073 t of contained nickel in matte, compared with 6,252 t in 2005. Anglo American approved its US$1.2 billion Barro Alto project, scheduled to produce 36,000 t/y. Production will start in 2008, with full production to be reached in 2011. CVRD has two nickel projects in Brazil: Ona Puma and Vermelho. Both are expected to begin production in the 2008 December quarter. Ona Puma is expected to have a nominal capacity of 58,000 t/y of nickel in the form of ferronickel, its nal product. Total investment in the project is estimated at US$1.44 billion. Vermelho is in the process of securing the necessary licences for its development. It has an estimated production capacity of 46,000 t/y of nickel and 2,800 t/y of cobalt, and has proven and probable reserves of 290 Mt. Its lateritic (limonitic) ores have an estimated nickel content of 0.8%. High-pressure acid leaching (HPAL) technology will be used to extract the nickel, and the project has an estimated cost of US$1.45 billion. Votorantim Metais has announced an expansion plan for its electrolytic nickel plant in Niquelandia that will increase production from 27,000 t to 37,000 t/y. In Bahia, Mirabela Nickel Ltd plans to invest US$263 million in the construction of a new mine and treatment plant. The Santa Rita nickel-sulphide project is expected to be commissioned in the 2009 June quarter. Searching for diamonds in Rio Abaete

KAOLIN
Brazils kaolin production in 2006 increased by 8% to about 2.6 Mt. Three companies account for 90% of production: Imerys-RCC produced 1.0 Mt; Caulim da Amaznia SA produced 755,000 t; and Para Pigmentos SA produced 597,000 t.

TIN
Production of tin-in-concentrate in 2006 decreased 16% to 9,265 t. Mamor Minerao e Metalurgia (Paranapanema group) produced 5,538 t, Grupo White Solder 635 t, Estanho de Rondnia SA (ERSA) 518 t, Coopersanta 1,116 t and others 1,457 t. Minerao Taboca SA operates the Pitinga mine where reserves are depleting. It is continuing its investment in the Rocha S project, and expects to increase production of metallic tin to about 7,000 t in 2007. Glencore International AG is investing US$40 million in Rocha S to produce an additional 3,500 t/y of tin, exclusively for its own use.
Celso Pinto Ferraz is a consultant in mineral economics and mineral policy

NICKEL
Production of electrolytic nickel, nickel in ferronickel

Old and new: historical mining operations, and view of Sao Paulo

July 2007 Mining Journal special publication Brazil

GEOLOGY AND MINERAL POTENTIAL

Coal deposits the extensive

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ALF of Brazils 8.5 million km2 is covered by rift-type, intracratonic sedimentary basins, adjacent to the Atlantic coast. Those basins hold large deposits of coal (Paran basin); K, Mg and Na salts; evaporites associated with gypsite; phosphorite and barite; uranium in continental sediments (Parana and Parnaba basins); extensive limestone deposits (natural pozzolan for cement); high-quality clay for ceramics; and important oil and natural gas beds. A further 4.5 million km2 are made up of Precambrian rocks, aged up to 3.2 billion years. The Archean terrain forms the Amazonian and So Francisco cratons, besides other smaller cratonic fragments. They are surrounded by mobile Proterozoic belts, consolidated in the trans-Amazonian (2.0 billion years), Uruauana (1.2 billion years) and Brasiliana (0.7-0.5 billion years) orogenesis. In the cratonic areas, greenstone and similar volcanic sedimentary belts appear, with deposits of Au, Ag, Fe, Mn, Cu, Ni and Cr. On the granitic greenstone terrains rest Archean Paleo-Proterozoic platform coverings, constituted by bifs (banded iron formation) of extraordinary dimensions (Carajs and Ferriferous Quadrilateral). Associated with the Paleo-Proterozoic sequences are extensive coverings of carbonate rocks (sometimes with large magnesite deposits), quartzite and metaconglomerates (with detrital deposits of Au and U). The Paleo-Proterozoic belts are usually made up of terrains showing a high metamorphic grade. They represent zones of continental accretion around the Archean nuclei, of great metallogenetic importance, comprising complex mac and ultra-mac layered bodies (Cr,V, Ni, Co and asbestos, and high potential for deposits of the platinum-group metals), and preorogenic ophitite associations (Mn, Cu, Ni and Co, plus Cu, Zn, Pb and Ag). In the Meso-Proterozoic age (1.8 -1.5 billion years ago), intense volcanic plutonic activity in the continental areas was responsible for many deposits of U, Sn, W, Mo, Zr, Ta, Nb and topaz. In the volcanic plutonic sequences, extensive transgressive terrigenous sedimentation developed with continental and uvial facies. These are rich in diamonds and have some gold and other marine deposits. There is also a high potential for mineralisation of Pb, Zn, Cu and Ag of the exhalative sedimentary form. The Neo-Proterozoic coverings (over one billion years ago), preferentially carbonate rocks, are rich in minerals related to Pb, Zn, Ag, phosphates, Ba and F. Meso- and Neo-Proterozoic belts were developed in basins alongside cratonic areas. They were subjected to successive compressive tectonic events (1.2 to 1.0, and 0.7 to 0.5 billion years ago), followed by the collision and cratonic formation of the Gondwanaland supercontinent. The main mineral deposits are associated with late to post-tectonic granitic rocks (W, Mo and Au) and to skarn-type deposits and pegmatite (Ba, Nb, Ta, Li, Sn and precious stones). Pre-orogenic (rift-type) or post-orogenic (arch-type) volcanic

confidence
July 2007 Mining Journal special publication Brazil

GEOLOGY AND MINERAL POTENTIAL

dominate terrain The main mineral

REGULATORY REGIME
The National Department of Mineral Production (Departamento Nacional de Produo Mineral, DNPM) is responsible for regulating and implementing the Mining Code. Mineral exploration licenses and mining concessions are issued and administered by the DNPM, which also monitors exploration, mining, and mineral processing.

Gold: 1% (garimpo extraction is exempt) Precious stones, coloured stones and gems that
can be polished, carbonates and noble metals: 0.2%. Out of the amount collected, 65% are earmarked for the municipalities where production takes place, 23% to the States or the Federal District and 12% to DNPM. The latter, in turn, must allocate 2% to environmental conservation in mining regions, through IBAMA (Brazilian Institute of Environment and Renewable Natural Resources).

sedimentary sequences can contain Ni-Cu mineralisations in mac and ultramac rocks; Ti and V in the gabbroanorthosite rocks; and deposits of Au, Ag and sulphides, in veins in the shearing zones. In cratonic areas of the late and post-tectonic Brasiliano event (0.550.46 billion years ago), pull-apart basins were developed, in transcurrent zones, lled by terrigenous continental sediments, in an oxidizing environment (stratabound deposits of Cu suldes) and alkaline, acid to intermediate volcanism (vein-type Au and Cu deposits). Later, Paleozoic sedimentation of the broad intracratonic basins occurred, with Mesozoic rifts. Finally, the Cenozoic covers show a potential for bauxite and kaolin deposits, in addition to alluvial gold ore, gems (other than diamonds), tin, monazite and other heavy minerals.

deposits are associated with late to post-tectonic granitic rocks

TAXATION REGIME
In Brazil, the same tax treatment applies for all economic activities, including mining. However, in addition to the generally applicable taxes, there are specic charges applying to mining activities, such as fees levied on the exploration stage, in addition to the payment of nancial compensation for the exploitation of mineral resources (CFEM or Federal Royalty).

LANDOWNER ROYALTY
No fees are levied on the holder of a mining concession, but a royalty must be paid to the landowner if the surface rights do not belong to the mining titleholder. This royalty amounts to 50% of the CFEM. Annual fee per hectare in area covered by an exploration license Holders of exploration licenses must pay one UFIR per annum for each hectare of the area pertaining to the exploration license, moving up to 1.5 UFIR, should the license be renewed. (1 UFIR = US$0.60 xed in March 2000).

ROYALTIES CFEM
These are set at a maximum of 3% of net turnover from the sale proceeds of the mineral product obtained after the last stage of processing and before its actual manufacturing. Aluminium, manganese, salt-rock and potassium ore: 3% Iron, fertilisers, coal and other mineral substances: 2%

MINERALS

Horizonte Minerals is focused on the discovery and development of world-class precious and base metal projects in Brasil and Peru.
Three advanced projects in established mining districts (100% owned) all demonstrate potential to host major gold and silver-zinc systems. Portfolio of quality pipeline projects. Experienced and dynamic management team with proven track record. Good contact network with major operators in Brasil and Peru.

PERU
The El Aguila silver-lead-zinc project 100% owned located in Cerro de Pasco mining district First phase drill results demonstrate high grade Ag-Pb-Zn-(Au)-(Cu) replacement mineralisation similar to the giant Cerro de Pasco mine Grades and widths in line with current producers in the district Resource statement 2007 Excellent infrastructure in place around the project area for rapid development Ready market of major Ag-Pb-Zn producers active in district

BRASIL
Tangara gold project 100% owned located in the Carajas Mineral Province 300km exploration block covering highly prospective greenstone belt Delineation of large scale mineralised system First phase drilling returned economic gold intersections Multiple targets for follow up drilling Excellent infrastructure in place around the project

Head Office 22 Grafton Street, London W1S 4EX, United Kingdom Ph: +44 (0) 2074 955 446 Email: info@horizonteminerals.com Web: www.horizonteminerals.com

BRASIL

July 2007 Mining Journal special publication Brazil

GEOLOGICAL MAP

Geological Eras

Selected mineral provinces and districts

July 2007 Mining Journal special publication Brazil

PROFILE

Ashburton eyes Cuiaba as new world-class gold camp

The Perth-based miner is unearthing gold potential in Mato Grosso, Brazil

VER the past year or so, Australian company Ashburton Minerals Ltd, based in Perth, has been quietly building a serious, strategic ground position in a little explored, yet proven, gold province in the Brazilian state of Mato Grosso. With the unusually long wet season nally over, the serious exploration work has begun. A team of experienced geologists, eld technicians and a drilling crew are busy working away on several fronts in the large, tenement holding that Ashburton has secured in the 230-year-old Cuiaba gold district. The Ashburton team, headed by managing director and geologist Tom Dukovcic, is searching for large world-class gold deposits in this extensive gold eld, which has only seen artisan garimpeiro and small-scale, private gold-mining during its long history. Early exploitation of alluvial gold by Portuguese pioneers, and later by slaves, moved to the open-pit mining of narrow, cross-cutting quartz veins. Today, there are about a dozen local, private-mining operations working this type of deposit. Collectively, they recover an estimated 15,000-20,000 oz/y of gold from the district. Ranging in width from a few centimetres to over 2 m, though most are 0.5 m, the veins are late-stage and cross-cut the regional stratigraphy of thrust-folded Proterozoic sediments, which include banded iron-rich units. Through its Brazilian-registered subsidiary Trans Pacic Gold Mineraao, Ashburton (ASX:ATN) is basing its exploration on the premise that the district holds larger, untapped gold deposits, which would have either been missed by previous miners or, by virtue of the style of mineralisation, would not have represented an economic option for them. On the basis of geological, geophysical and structural studies, Ashburton believes the Proterozoic sedimentary rocks of the Cuiaba basin offer a perfect setting for large, disseminated, sediment-hosted, gold deposits. These are typical of other such provinces elsewhere in the world, such as the Carlin trend in Nevada or the large deposits in China. In addition, the region has many similarities to the Paracatu deposit in Brazils Minas Gerais state, home to one of the Geologist examining drill chips at Tanque Belo

Rotary air-blast drilling in Cuiaba worlds largest gold mines with reserves of one billion tonnes at 0.44 g/t, containing about 13 Moz of gold. Exploration by previous workers in the Cuiaba region was piecemeal and aimed to identify concentrations of cross-cutting veins that were suitable for bulk mining. This work was unsuccessful. Nevertheless, several excellent drill intercepts were returned by previous work, such as 32 m at 0.45 g/t and 10 m at 1.15 g/t. These intercepts were not followed up, perhaps because they did not contain quartz veins; a feature regarded as a positive result in the context of Ashburtons model. Due to the large amount of ground to cover and to reduce the time to discovery, work is being conducted concurrently on several fronts. Regional, surface geochemical-sampling and rst-pass RAB (rotary air-blast) drilling, using the companys 50%-owned drill rig (purpose-built and imported from Australia), is under way.

MULTI-ELEMENT ANALYSIS
Ashburton is analysing geochemical samples for a suite of multiple elements to provide critical information on the mineral environment. All drill core has been relogged and resampled, while regolith mapping and prospect-scale structural mapping will aid the interpretation of anomalies and assist in the planning of target drilling programmes. Brazil is resource-rich. In 2005, it was the worlds largest niobium producer and ranked second in the production of iron, aluminium, manganese and tantalum. According to ofcial records, Brazil also produced about 40 t (about 1.3 Moz) of gold in 2005 a fair way behind second-ranked Australias 254 t (8.2 Moz) but, signicantly, about 20% of its gold production was from private, garimpeiro operations. Brazil, which has a gold mining history of over 300 years and largely similar geology, is one-third larger

than Australia yet only about A$122 million was spent on mineral exploration in 2005 a quarter of that spent in Australia during the same period. This underlines the potential in Brazil. In May 2006, Ashburton signed a heads of agreement with AIM-listed Minmet plc to earn a 75% interest in the rms tenements in Cuiaba. Key to this joint venture was access to an exploration database, including an excellent airborne, geophysical survey of 6,000 km2 stretching over 150 km of the Cuiaba gold district. Ashburton has had this data reprocessed by a geophysicist expert at dealing with low-latitude surveys. Subsequent state-of-the-art reprocessing by a leading Perth consultant has shed new light on the region and helped to formulate Ashburtons conceptual models. These have highlighted new targets, which Ashburton has quickly tried to secure via tenement applications. Other than private mining operations, Ashburton now has control of most of the prospective zones in the Cuiaba gold district. Our aim is to build the Cuiaba Gold Project into a major company play. I believe this belt could easily host four or ve 3 Moz-plus gold deposits, says Mr Dukovicic. At Cuiaba, all the infrastructure is in place roads, transport, electricity, water and modern communications. We still have a lot of work to do, but we know we are in the right place geology, structure, ground position and a long history of gold mining and that puts us most of the way to a major discovery. Initial results are already conrming Ashburtons theory. A 2 km-long gold anomaly has been outlined by surface geochemical sampling at Tanque Belo, and initial drilling of this anomaly has returned 16 m at 0.48 g/t (end-of-hole) from 52 m in hole TBB 023. By the end of the current eld season in November 2007, Ashburton hopes to be in a position to determine whether its ideas on the prospectivity of the Cuiaba gold district are correct. If positive, Ashburton expects to be in the area for quite some time as it systematically builds the region into a world-class gold camp.

CONTACTS
Ashburton Minerals Ltd Level 2, 35-37 Havelock Street, West Perth, Australia WA 6005 Contact: Tom Dukovcic (managing director) E-mail: tom.dukovcic@ashmin.com.au Website: www.ashburton-minerals.com.au Tel: +61 8 9266 0300 Fax: +61 8 9266 0301 Directors: Rick Crabb (chairman), Tom Dukovcic, Rodney Dunn

July 2007 Mining Journal special publication Brazil

PROFILE

Brazilian Diamonds cuts to the chase

The mining rm aims to develop Brazils rst kimberlite mine

OMETIMES it pays to know that you are following in someone elses footsteps.You gather the information, learn from what has gone before and then set out to do things your own way. This goes some way towards describing the approach of Brazilian Diamonds Ltd, which acquired a portfolio of licences from De Beers in 2001 and aims to develop Brazils rst kimberlite mine. Along the way, says chief executive Stephen Fabian, Brazilian Diamonds will have demonstrated patience, extensive know-how and forensic application to detail. After listing on AIM in 2001 (the company was already listed on TSX), we started a campaign of buying up assets in Brazil, where we could. Most of the juniors had given up at this stage, and our main focus was getting databases and getting as much information as we could get our hands on. To this end we did a number of good deals with De Beers and acquired the databases as part of those deals. The deals in question have left Brazilian Diamonds with more than 140 kimberlites in Brazils eastern state of Minas Gerais. These properties range from the mine-ready Canastra 1 currently awaiting full environmental permits and expected to produce around 30,000 ct/y to Regis and Salvador 1, which Mr Fabian believes are particularly exciting. In between, there are a number of other prospects that the company is steadily advancing, using its own particular brand of exploration expertise. What we really want to do is focus on the best projects and act as a bit of an incubator. We are very careful with our money and get a lot of bang for our buck. A graduate mining engineer, and former mining analyst and corporate nancier, Mr Fabian moved to Brazil in 2000 and has provided a front-line focus to

the companys efforts in the country. He is the rst to admit that the left-leaning politics of Brazils current government have not exactly been helpful in bringing a project like Canastra 1 into production, but he estimates a 70% chance that the mine will be up and running this year.

STATE-OWNED PARTNER
Canastra is a good example of how you have to take a project through the bureaucracy in order to get it approved, he says, admitting that the federal agency has slowed things down due to environmental objections. The other areas where we are working are easier because they dont have the inuence of the federal agency. At Santo Antonio do Bonito we are working with a state-owned joint venture partner, which makes the process easier. In fact, the Minas Gerais State mining company (Codemig) is providing feasibility-study funding for the Santo Antonio project, which is currently undergoing bulk-sampling in an area that, historically, has already produced 12 diamonds in excess of 100 ct, including the 726 ct President Vargas, the largest ever found in Brazil. Once in production, the alluvial diamond mine is expected to produce 60,000 ct/y, with Brazilian Diamonds retaining a 25% interest. Being responsive and alert to new opportunities is a key part of the companys approach, says Mr Fabian. To this end, the team has absorbed itself in the minutiae of information, only moving in on targets when the data justies it and speedily testing samples at the companys own purpose-built laboratory. While 2006 was a year of consolidation the company cut its overheads and put more money into exploration 2007 has turned into a year of intense activity, including drill-testing and bulk-sampling on a

number of key targets. Arguably, top of the list is the continued drill-testing of the companys Regis kimberlite, part of its Patos de Minas project. By January 2007, the company had drilled six holes on the project, recovering 129 micro-diamonds and identifying what it describes as an important 20 ha central zone in the pipe. Micro-diamond results from all six holes are expected in the September 2007 quarter. Another key priority this year, says Mr Fabian, is Salvador 1 in the state of Bahia, with a wealth of De Beers sampling history. All of the De Beers data has been revisited on this project and the company is presently preparing for a bulk sample of the Salvador 1 kimberlite, which will comprise six pits of approximately 650 t each. Results from the rst of the bulk sample pits are expected in the December 2007 quarter. It is part of our strategy to work projects up, carry out the early high-risk work and then look to bring in a partner, says Mr Fabian. In this case, the data reports the recovery of 243 macro-diamonds from eight mini-bulk samples in the area. Aside from bringing on prospects like Regis and Salvador 1, there is the task of bringing Canastra 1 into production a project that has already included the recovery of 5,000 ct of gem-quality diamonds and it could become the rst kimberlite mine in Brazil to be mined economically. Mr Fabian says it has been a long struggle to get the relevant authorities to grant a licence for the project, but all the signs suggest this could be the year. If the project gets the go-ahead it will be all systems go to complete the development of the mines infrastructure, though costs will be minimised as much of what is needed is already in place. With about C$4 million in the bank, he believes the company is well-funded to take things forward this year and sufciently well placed in Brazil to secure further funding, if needed.

CONTACTS
Brazilian Diamonds Ltd Suite 910-475 Howe St,Vancouver, BC, V6C 2B3, Canada Tel: +1 604 689 2599 E-mail: info@braziliandiamonds.com Website: www.braziliandiamonds.com

Examining Regis drill core

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Mirabela forges ahead with nickel-sulphide projects

Exploration efforts are paying off with news that Mirabela is to develop the Santa Rita deposit in Bahia
DEVELOPMENT
Mirabelas project development team has already been appointed. Raphael Bloise is project director. His background as one of CVRDs top project developers and experience in developing the Sossego copper-sulphide project positions him well to lead Mirabelas development work in Brazil. David Black is project manager for the EPCM construction contract and he brings specic knowledge of nickelsulphide plants, having recently managed an upgrade of the Maggie 3D model of mine and project layout Hays project in Western Australia. Mirabela is proceeding with the reects positive results from inll drilling since the rst phase of Santa Ritas project implementation, previous resource announcement in October 2006. including detailed planning and preliminary engineering. The resource increase is mostly attributable to Signicant long lead-time items have been ordered, wider mineralisation in the central zone deeps and an such as a SAG mill, a ball mill and a primary jaw crusher. extension of the southern zone resource. Over The larger tonnage of the potential millfeed raises 80,000 m have been drilled at Santa Rita and Mirabela the scale and scope of the project, so, in addition to believes the recent southern deeps results will add supporting an increase in mine life and throughput further resource within open-pit limits. A scoping level rate, a larger project will improve the economics of a pit-optimisation study shows an increase in the life of proposed smelter at Santa Rita. The positive results the Santa Rita mine to almost 20 years. of the bankable-feasibility study, coupled with the improving resource gures, have encouraged Mirabela POSITIVE FEASIBILITY STUDY to proceed immediately with an extended deepsMirabela announced a positive bankable-feasibility drilling programme and a smelter-scoping study. study for the nickel-sulphide deposit at Santa Rita on An on-site smelter would convert the concentrate July 5, 2007. It demonstrates that the project is grading from 12-13% to a matte grading of 50-60%. achievable and protable, and will make a signicant Production of a matte would attract better payment contribution to the Brazilian economy as it is terms than concentrate, and signicantly reduce estimated that over 80% of the capital spend will go transport costs. Given the size of the project, Santa to Brazilian contractors or suppliers. While the study Rita will no doubt continue to be the subject of has a planned production of 16,000 tpa of Ni metal in further studies to upgrade capacity for mining, concentrate, a rise in throughput to 18,500 tpa of Ni concentrating and downstream processing. (41 million lb/y) is already being planned and is slated Mirabela is delighted to be developing such a large to be completed during the rst year of operation. mining project in Brazil, where it can benet from the Capital costs for the development of plant and proximity of rst-class infrastructure, government associated infrastructure have been estimated at support for mining development and the availability US$263 million, with the upgrade to 18,500 tpa Ni of a strong industry in mining services. estimated to cost an additional US$10 million. The Santa Rita project is already equity-funded with US$160 million in cash allocated towards construction. CONTACTS Funding the balance of the projects requirements by debt seems straightforward, with strong initial expressMirabela Nickel Ltd ions of interest from potential banking syndicates. Ground Floor, 8 Colin Street, The environmental-approval process is well West Perth, Western Australia 6005 advanced as the project has received preliminary E-mail: info@mirabela.com.au approval, based on an environmental impact study and Website: www.mirabela.com.au w w.mirabela.com.au report approved by the Brazilian authorities in DecemTel: +61 8 9324 1177 ber. This is excellent given that approval was received Fax: +61 8 9324 2171 within four months of submission and reects a proactive approach by the local authorities, as well as a clear permit process. It is hoped that all environmental approvals will be received by September, enabling site works to commence in October. Commissioning of the project is targeted for the June quarter of 2009.

IRABELA Nickel has found the largest nickel-sulphide deposit in South America the largest greeneld discovery globally in the past 10 years. Brazil has provided an excellent base for Mirabelas activities for several reasons: excellent prospectivity, a stable political environment and a well-developed mining industry. The powerhouse of South America, Brazil boasts all the ingredients to support Mirabelas nickel development: good infrastructure, a mature mining industry and a skilled workforce. Brazil is already a signicant producer of nickel, having trebled its production since 1998 to about 45,000 tpa, and is poised for further growth as Mirabela proceeds with its Santa Rita project. Successful delivery of this project will position Mirabela as South Americas premier producer of nickel-sulphide concentrate and make it one of the worlds largest, independent nickel plays. Government support for Santa Rita, particularly as part of its economic development initiative in Bahia, has helped to put the project on the fast-track to production. With the Santa Rita discovery, Mirabela now has a strong track record in exploration and hopes to make further discoveries in Brazil, particularly in the Sao Francisco craton the geological province that hosts Santa Rita. The previously unrecognised potential of Santa Rita-type deposits in the region makes this exploration strategy an excellent opportunity for organic growth of Mirabelas resources. The company is also excited about other base-metal exploration and development opportunities in Brazil.

40% INCREASE AT SANTA RITA

Over 422 Mt of contained nickel (925 million lbs) has been identied in measured and indicated resources, with an indicative strip ratio of 7.7:1. The new tonnage of potential millfeed from this resource represents a 40% rise on previous in-pit mineral resources (300 Mt of contained Ni). This exceeds expectations and

Mirabelas core shack

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Sola leads the eld in Rondonia

The Canadian explorer commences bulk testing its Carolina kimberlite diamond deposit
CAROLINA KIMBERLITE
Drilling the Carolina kimberlite pipe Solas current major asset, the diamond-bearing Carolina kimberlite near the town of Espigo dOeste, is an exposed pipe of over 2.5 ha, which is held in an 80/20 JV with Bantu Minerao Ltda. An option to purchase a further 10% interest also exists. Prior to this JV, artisanal production in 2003 from the upper part of the kimberlite was declared at 12,000 ct of macro-diamonds, with an average diamond value of US$200/ct. Two notable stones produced during that initial period weighed 52 ct and 53 ct. To facilitate rapid testing of the Carolina kimberlite and of any other diamondiferous kimberlites on its claims, Sola has constructed and already tuned a 400 t/d jig plant on site at Carolina. A 5,000 t minimum bulk-sampling programme of the Carolina kimberlite will commence at the same time as the latter part of a 2,000 m-denition diamond-drilling programme.

OLA Resource Corp (TSX-V:SL) is an emerging Canadian exploration and development company, focused on kimberlite-hosted diamond deposits in the state of Rondnia in northwest Brazil. In addition to the exploration area of more than 3,000 km2, Sola is working through a pre-feasibility study of the diamondiferous Carolina kimberlite pipe. The economics of the Carolina pipe should be known by the end of the 2007 exploration programme. Sola was attracted to the potential of Rondnia for not only its geology but also its well-developed and thriving agro-based economic setting, where foreign investment in mineral exploration is encouraged. The Precambrian craton that has been identied in Rondnia is analogous in size to the Canadian Slave Diamond Province. Kimberlites are prolic and occur that this pre-feasibility study will continue on through in clusters, with a high percentage hosting diamonds. the feasibility stage as economic viability is proven. The once remote area encompassing Rondnia Sola intends to move towards production, with the was homesteaded from the 1970s in a governmentgoal of becoming the rst miner of kimberlite for sponsored initiative that began with the construction diamonds in Brazil. of the Trans-Amazonas highway. Since then, the area In addition to Carolina, Sola is performing a has developed a burgeoning agricultural economy. highly-successful kimberlite-indicator mineral (KIM) The side benet of this programme on its properties, development in infrastructure through which it has already is that previously-isolated and identied macro-diamonds unexplored areas are now associated with KIM anomalies accessible thanks to modern in ve distinct areas. An mining methods. intensive programme of More than 40 kimberlites ground-based magnetic and have already been discovered electro-magentic (EM) surveys in the area surrounding Solas continues in those areas claims, of which almost 50% where diamondiferous KIM Diamonds and kimberlite-indicator have proven to be diamondanomalies have been recorded. minerals from the Carolina pipe iferous. Diamond-bearing Sola is currently preparing to kimberlites were rst noted in the region by Sopemi perform a helicopter-borne magnetic and EM survey (De Beers) crews in the late 70s, but little attention of all its claims. The company has 50 eld personnel was paid to the region until 1999 when rich, diamond involved in the exploration programmes in Rondnia. deposits were found on an aboriginal reservation east of the Roosevelt River.

MANAGEMENT
Sola is headed by a team of resource-exploration specialists who have, in the past, recorded several successes in the discovery of economically-viable mineral deposits in Canadas northwest territories and elsewhere in South America. The board of directors includes: president Thomas Kovacs (MBA); non-executive chairman Prof Roger Morton (P Geol); and director Warren Boyd (BSc). Much of Solas rapid success is attributable to its experienced contract-eld operator, Canamera Geoscience Corp. Headed by John Dupuis, Canamera made signicant discoveries during the Canadian diamond rush, including Taheras Jericho pipe and the Mountain Province 5034 diamond deposit.

FUTURE PLANS
Sola is condent that, over the coming months it will make further discoveries of diamond-bearing kimberlites within some of the KIM anomalies previously mentioned. Ground geophysics in the proximity of the Carolina diamond deposit indicate that a cluster of kimberlites await discovery. Factor into this the advanced nature of the Carolina deposit, the existing kimberlite nds in the craton, and the discovery of KIM minerals and diamonds, and the true potential of the diamond camp in Rondnia looks set to reward its shareholders in the near future. Panning for kimberlite-indicator minerals

CURRENT PROGRAMMES
Sola is currently exploring 2986 km2 of territory in the Pimenta Bueno district of southeastern Rondnia, northeast of the Bolivia-Brazil border. The property is alongside and shares the same geology as the claims hosting clusters of kimberlites that were discovered by a Rio Tinto-led joint venture (JV). Sola has been exploring in the district for two years and has found a number of new diamond occurrences. The rm is now drilling and undertaking a bulk-test assessment of its rst diamondiferous kimberlite pipe, the Carolina deposit. It is anticipated

CONTACTS

Sola Resource Corp Suite 120, 3442 118th Avenue SE, Calgary, AB, Canada, T2Z 3X1 E-mail: info@solaresourcecorp.com Website: www.solaresourcecorp.com Tel: +1 403 236 0339 Fax: +1 403 203 3584

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St Andrews goes for gold

The UK-based miner is forging ahead with four gold projects in Mato Grosso

T ANDREWS Mining Ltd (SAM), a 90%-owned subsidiary of AIM-listed Angus & Ross plc, was formed in 2006 to take over the parent companys Brazilian interests. On the ground, SAM is managed locally by Brazilian nationals and long-term residents, and currently employs ve Brazilian geologists. As a result, the company maintains an excellent working relationship with the local licensing authorities, as well as with several of Brazils premier universities and colleges. The original focus was exploration for low-cost tantalum resources, but SAM has repositioned itself into a gold exploration and development company, primarily in Mato Grosso state, and anticipates being able to bring its rst property into production next year. The project with the greatest long-term potential is, undoubtedly, the greeneld Santa Dbora gold project, located some 70 km southwest of the state capital of Cuiab on the Salinas-Praia Grande gold belt. The company has purchased, licensed or applied for a total area of 91 km2, straddling the SalinasPraia Grande gold trend, and expects to solidify its position further over the next few months. With Advents operating Salinas mine to the southwest and Ashburtons ground to the northeast, the property is highly prospective, not only for primary gold mineralisation but also for shallow, secondary gravel. Evidence from the adjacent mine, and the old garimpeiro operations in the immediate locality, suggests there could be a potential 24 Mt containing up to 600,000 oz of secondary gold in the shallow gravel. SAM has already sampled the rst 6 Mt block, treating samples of material through a small test rig, and is awaiting third-party analysis prior to announcing its rst resource estimate. Following this, metallurgical testing and a feasibility study will be required prior to any production decisions. In addition to the known gold-bearing, sub-vertical quartz veins that are prevalent within the trend, the

The trial plant at St Elena A pre-feasibility study by Brazilian consultant Multigeo Minerao has conrmed the robustness of this project as an underground mine, and the company has commenced trial mining and processing at the rate of 200 t/d prior to making a nal production decision. Presuming a positive decision, an enlarged, 800 t/d plant could be in operation by mid-2008. The company has two other gold projects in Mato Grosso, including the old, high-grade Filo do Fabinho mine, which has been operated by garimpeiros for almost 20 years on a very small scale. The old shafts and workings are being rehabilitated, with early samples grading from 20-44 g/t, conrming the highgrade nature of the ore. Drilling to develop resource statement reserves should commence later this year. The Filo do Fabinho mine could be back in production as early as 2009, presuming a successful drill programme. SAM also has two prospects in northeast Brazil for tantalum and will consider bringing them into production in the future on the basis of an option offtake agreement with Cabot Corp of the US. Emeralds have also been located at one of the prospects. Should the three current gold projects all come into production, SAM could be producing in excess of 60,000 oz/y of gold within two years, which should increase substantially when the Santa Dbora primary resource proves to be viable. Angus & Ross is preparing SAM for listing on a recognised stock exchange early in 2008.

Examining gold concentrates at St Elena

surface-sampling programme also discovered a zone of at least 1 km of an iron-rich phylite whose underlying mineralisation is similar to several large gold mines in western Brazil. Drilling of this potential primary resource will commence in August 2007.

INCREASE TONNAGE
In northern Mato Grosso, the smaller but more advanced Santa Elena gold project was optioned in late 2006. A previously operating open-pit mine, Santa Elena was purchased based on a remaining resource statement of just over 1 Mt, grading 2.51g/t, developed by the local RTZ subsidiary (Rio Tinto Brasil) in the 1990s. A short drill programme early this year boosted the measured, plus-indicated grade to 3.15 g/t. Drilling continues to increase the resource tonnage.

Drilling at Santa Cecilia

CONTACTS
St Andrews Mining Ltd St Chads House, 59 Piercy End, Kirkbymoorside, Yorkshire Y062 6DQ E-mail: info@angusandross.com robin_andrews@angusandross.com Website: www.standrewsmining.com Tel: +44 1751 430 988 Fax: +44 1751 430 991

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Vaaldiam to become Brazils largest diamond producer

First diamond mine completed and two kimberlite projects advancing
The Duas Barras mine in Minas Gerais

AALDIAM Resources Ltd (TSX:VAA) is in the nal stages of commissioning its 100%owned Duas Barras alluvial mine located in the state of Minas Gerais, Brazil. The construction of the mine is complete and the diamond recovery plant is processing diamond-bearing gravel. The plants processing rate will be gradually increased to the design capacity of 80 bank m3 (bcm) per hour of gravel. The company has projected that during the remainder of 2007 the Duas Barras mine will produce 25,000 ct of diamonds, increasing to 50,000 ct/y in 2008. Contract mining operations at the Duas Barras mine have been underway since February 2007 using three excavators and a eet of seven dump trucks, each with a hauling capacity of approximately 15 m3. Approximately 73,000 bcm of gravel have now been cleared and, to date, 23,000 m3 of diamondbearing gravel has been mined, transported and stockpiled at the diamond recovery plant. Some 1,500 ct of diamonds have been recovered to date. The Duas Barras deposit contains an indicated resource of about 1,843,000 bcm at an estimated grade of 0.16 ct/bcm and 0.18 oz/bcm of gold. This represents an in-situ diamond resource of 295,000 ct and 335 kg of gold. In addition, the deposit contains an inferred resource of approximately 856,000 bcm at an estimated grade of 0.39 ct/bcm and 0.18 g/bcm of gold, representing an in-situ diamond resource of 137,000 ct and 156 kg of gold. An independent valuation of 169.15 ct of diamonds recovered during the bulk-sampling programme indicated an average value of US$197/ct. While the construction of Vaaldiams rst diamond mine has captured the bulk of the companys headlines during the past year,Vaaldiam has also been steadily advancing its two kimberlite projects through the evaluation phase of development with a goal of reaching the feasibility stage as quickly as possible. The early results from a mini-bulk-sampling programme at Vaaldiams 100%-owned Brana property, located in Bahia state, Brazil, indicate that the rst of four kimberlite pipes sampled has good economic potential. Exploration drilling of two kimberlite pipes has outlined an inferred resource of 9.9 Mt of kimberlite containing a potential 2 Mct of diamonds. The mini-bulk-sampling programme resulted in projected grades of 20.78 ct/100 t for the Brana 3 kimberlite and 5.3 ct/100 t for the The diamond recovery plant

Brana 7 kimberlite pipe. Vaaldiam has started an aggressive programme to evaluate the economic potential of the kimberlite deposits discovered on the Brana property. It consists of a 5,000 t bulk-sampling programme to recover over 1,000 ct of diamonds and 10,000 m of resource-denition drilling, and is designed to deliver grade, diamond value and tonnage estimates to support the completion of a feasibility study in 2008. To complete the Brana mini-bulk-sampling programme and ensure a quick turn around on sample results,Vaaldiam constructed its own diamond recovery plant just 5 km from the Brana property. To carry out the larger, 5,000 t bulk sample at Brana, it will construct its own 10 t/h dense media separation plant to process and recover the diamonds. Vaaldiams 100%-owned Pimenta Bueno property is located in Rondonia state, Brazil and comprises 248,000 ha. Fully 38 kimberlite pipes and three dyke systems have been discovered to date. Eighteen of the pipes are diamond-bearing based on sampling completed to date. Four of the 38 pipes have been mini-bulk sampled with less than 200 t of kimberlite having been collected thus far. The company has mobilised a highly experienced exploration team to the property whose focus will be a mini-bulk-sampling programme on the Cosmos 1 and 2 diamond-bearing kimberlites. Prior to this sampling programme,Vaaldiam retained a 49% interest in the project with joint venture partner, Rio Tinto. As the previous operator, Rio Tinto focused on the evaluation of geophysical and geochemical anomalies in an exploration programme targeting new kimberlite

discoveries. There is continued good potential further to increase the number of kimberlite deposits to be discovered on the Pimenta Bueno property.Vaaldiam is encouraged by the potential of the Pimenta Bueno district as it continues to produce large, high-value diamonds from alluvial deposits that appear to be closely associated with kimberlite occurrences in the district. Some of the pipes discovered to date on the property are quite large with surface areas in excess of 20 ha, which indicates excellent potential for large tonnage deposits.Vaaldiam remains condent that the Pimenta Bueno property has the potential to deliver a world-class diamond deposit.

STRATEGIC INITIATIVES
Vaaldiam has announced its intention to acquire all of the outstanding shares of diamond producer Elkedra Diamonds NL (ASX:EDN, AIM:EDN) and diamond explorer Great Western Diamond Corp (TSX-V:GWD) to create a leading diamond company. The new company formed upon completion of this strategic initiative will be the dominant South American diamond producer and one of Canadas largest listed diamond companies. The transaction will result in a company with a signicant scale of operations, diversied long life production, an enhanced capital markets prole attracting the attention of a broader group of international investors and highly experienced in-country teams.

CONTACTS
Vaaldiam Resources Ltd 55 University Ave, Suite 1105 Toronto, Ontario, Canada, M5J 2H7 Tel: +1 416 363 6927 Fax: +1 416 363 2564 E-mail: info@vaaldiam.com Website: www.vaaldiam.com Contact: Janet Reid

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PROFILE

Yamana Gold: production fuelled, vision driven

The Canadian gold producer is one of the largest and fastest-growing in the industry

AMANA Gold Inc (TSX:YRI, NYSE:AUY, LSE:YAU) is a leading, intermediate Canadian gold producer with signicant gold production, development and exploration properties in Brazil, Argentina and Central America. The company has ve producing and three developmentalstage mines, and numerous world-class exploration concessions, including almost one million hectares in Brazil. It is estimated that Yamana will raise its projected production of 570,000 oz of gold in 2007 to over 1 Moz by 2009. With a market capitalisation of about C$4.6 billion,Yamana is one of the largest and fastest-growing gold producers in the industry. It plans to continue to build on its success through the advancement of its exploration properties and by targeting other goldconsolidation opportunities in Brazil, Argentina and elsewhere in the Americas. Yamana uses several criteria before investing in a country, including geological potential, political stability, infrastructure, personnel skill and education levels, favourable mining regulations and a friendliness toward the mining industry. Brazils geological potential is abundant, yet relatively underexplored. It has one of the worlds ten-largest economies and a signicant industrial base. Infrastructure is well-developed, including abundant hydroelectric power and efcient transport. Quality mining equipment is made locally and the permit process is efcient. Mining is culturally embedded in Brazil. Workers are skilled, labour costs are reasonable and management potential is high. Of the 1,500 people who will be employed at Yamanas Chapada mine, more than 99% will be local, including the senior managers. Yamana was named Mining Company of the Year for the second consecutive year in the mid-size category by Brasil Mineral magazine.

VALUE AND GROWTH

In just four years,Yamana has transformed from a junior company created to develop copper and gold properties in Brazil into a leading, low-cost, intermediate gold producer with excellent prospects.Yamana

Yamana has allocated US$32 million for exploration in 2007 (US$20 million in Brazil), which will include over 100,000 m of drilling. This will focus primarily on Gualcamayo, the Jacobina Mine Complex area, the Bahia Gold belt, the Rio Itapicuru Greenstone belt, and on the Guapore Gold belt between So Francisco and So Vicente (Brazil), and in Central America.

RESPONSIBLE MINING
Yamana is a responsible mining and exploration company with sustainability plans for all its properties and nearby communities. It believes it is important to share the benets derived from its mineral operations with the community. An important part of this commitment is ongoing investment in health and safety, environmental protection, Yamana miners and the self-sustainability of at the Jacobina communities long after mining Mine Complex, operations cease. Bahia, Brazil Wherever possible, the company hires and buys locally, and regionally. In 2006, it built a medical clinic in Alto Horizonte to serve the healthcare needs of its Chapada mine employees and local residents. At So Francisco,Yamana funds the local museum so that residents can preserve their local heritage. In Fazenda Brasileiro,Yamana supports 540 students at the campsite high school. At Gualcamayo,Yamana gives regular safety talks at local schools and it is proud to have been awarded Most Socially Responsible and Best Environmental-managed Mining Exploration Company in San Juan, Argentina, due to its work at Gualcamayo. Yamana is committed to protecting, reclaiming and enhancing its sites. At every stage of mining, from exploration to closure, the goal is to minimise environmental impact. Its operations at Fazenda Brasileiro are registered under ISO 14001, the international best-practice for environmental compliance. It is working towards certication at all of its mine sites. Examples of local programmes include: solid-waste management; surface and groundwater monitoring; air monitoring; reclamation; re-vegetation tests; wildlife rescue; sh monitoring; archaeological rescue; nativeseedling production; and environmental education. Yamana received the Brazilian Mining Industry Excellence Award for Environment in 2006 for implementing an eco-management system and certication in 14 months at Fazenda Brasileiro. The company has also created an integrated management system for the environment, health and safety, community relations and social responsibility, based on international standards and best practice (ISO 12002, OHSAS 18001, SA 8000).

CONTACTS
Yamana Gold Inc 150 York Street, Suite 1102 Toronto, Ontario, Canada M5H 3S5 E-mail: investor@yamana.com Website: www.yamana.com Tel: +1 416 815 0220 Fax: +1 416 815 0021

was created in 2003 through the consolidation of several privately-held Brazilian development projects into a public company with the goal of advancing the development of these early-stage projects. Before the year was over,Yamana had raised C$83 million in two equity nancings and acquired the Fazenda Brasiliero mine in Brazil, which produces approximately 75,000 oz/y of gold and has the resources to support a four-to-six year mine life. In July 2003,Yamana acquired its agship Chapada mine in Brazil, as well as So Francisco mine in Brazil. Commercial production at Chapada began in February 2007, and is projected to reach 180,000-205,000 oz of gold and 130-145 Mlb of copper this year. Production at So Francisco began in August 2006 and is projected to reach 120,000-130,000 oz of gold this year. In 2004-05,Yamana continued to develop its properties and advanced three new exploration projects to the point where they had the potential to become mines. These included So Vicente, C1 Santa Luz and Ernesto. The company also raised over C$270 million to fund internal and future growth. In 2006, the company further fuelled its growth through acquisitions. A target production level of 750,000 oz/y by the end of 2008/early 2009 was set early in the year, but boosted to over 1 Moz. The acquisition of RNC Gold, Desert Sun Mining and Viceroy Exploration resulted in Yamana becoming the dominant gold-mining company in Brazil, with additional production at the San Andrs mine in Honduras, and a position in Argentina with a largescale project at Gualcamayo.

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CONTACTS

Regional geological cartography State geological maps

National Department of Mineral Production (DNPM) SAN, Quadra 01, Bloco B 70 040-903, Braslia, DF Tel: +55 61 3312 6666 Fax: +55 61 3225 8274 E-mail: dire@dnpm.gov.br Website: www.dnpm.gov.br

Geological Survey of Brazil (CPRM) Headquarters Avenida SGAN, Quadra 603, CjJ, Parte A, 1 Andar, Braslia, DF, 70830-030 Tel: +55 61 2192 8552 Fax: +55 61 3224 1616 E-mail: cprmsede@df.cprm.gov.br Website: www.cprm.gov.br

Administrative and technical departments 404 Avendida Pasteur, Urca Rio de Janeiro, RJ, 22290-240 Tel: +55 21 2546 0219 / 2546 0456 Fax: +55 21 2295 6347 E-mail: cprm@rj.cprm.gov.br

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