Jaguar Mining Paciência Gold Mine, Brazil


Canadian company Jaguar Mining's wholly owned Paciência project consists of 21,000 acres of mineral concessions about 50km south-east of Belo Horizonte, Brazil. The concessions are located at the Moeda conglomerate and at the São Vicente trend. Jaguar controls contiguous mineral rights covering 20km along the 40km São Vicente trend, where about 25Moz of gold has already been produced.

As of late May 2008, commissioning of Paciência was underway with all circuits operating. Loading of the processing circuits began on 25 April and gold production is expected to start in mid-2008.

The $52.3m capital for the project was raised through cashflow from operations and a portion of a $75m private placement. The placement was sold in March 2007 by a syndicate, led by TD Securities, that included Blackmont Capital, BMO Capital Markets and RBC Capital Markets.

The life of the mine is put at just under five years and total production cost, including invested capital, is quoted as $386/oz.

Geology

The project represents the largest concession package in an area known as the Quadrilátero Ferrífero (Iron Quadrangle). The Quadrilátero Ferrífero is an area consisting of rocks ranging in age from Archean to Upper Proterozoic.

The gold metallogeny in the Quadrilátero Ferrífero may be considered a complex one. Initially, in the Archean, volcanic exhalative sedimentary processes in the greenstone belts produced narrow-banded iron formations and chert-hosted, sulphide-rich gold deposits.

"Loading of the processing circuits began on 25 April and gold production is expected to start in mid-2008."

Shear-zone related gold deposits were also generated at that time. These first two deposit types host most of the gold mineralisation. The third type of deposit hosts carbonatised mafic schist within shear zones.

Gold mineralisation at Paciência is located chiefly in silicified zones that trend parallel to the regional structure. Some small amounts of pyrite and arsenopyrite are also present. About 40% of the gold is considered free milling. The mineralised material is mostly non-refractory sulphide.

Reserves

The project contains reserves of about 2.7Mt at 4.5g/t Au, containing about 394,000oz of gold. It also has measured and indicated resources of just over 3.2Mt with an average grade of 3.8g/t, containing about 394,000oz of gold, and inferred resources of 500,000t with an average grade of 5g/t, containing about 80,300oz of gold.

Jaguar is conducting additional exploration to upgrade and increase Paciência's resource base, saying it will bring additional resources into the mine plan as exploration results are evaluated. These additional resources are expected to increase the mine life and annual production rate, which is forecast to be about 73,000oz.

Jaguar intends to use a cut-and-fill method at this underground mine, which contemplates a treated tailings backfill system. It plans to mine about 400,000t in 2008, 600,000t from 2009 to 2011 and about 514,000t in 2012.

Processing

Jaguar has its own, new 1,800t/day carbon-in-pulp (CIP) processing plant at Paciência. The processing facilities include crushing and grinding circuits followed by a gravity separation circuit, which is expected to recover about 40% of the available gold, along with a leaching and CIP adsorption / desorption / recovery plant to process the downstream gravity-removed ore pulp.

The metallurgical circuit is expected to raise the overall recovery to an estimated 93%.

"Jaguar has its own, new 1,800t/day carbon-in-pulp (CIP) processing plant at Paciência."

The project is being supplied with electrical power from state-owned utility CEMIG, rated at 13.8kV and with an average demand in 2008 of 4MW.

Jaguar also has authorisation from the Environmental Agency for 68m³/h of water from the Tejuco River, about 4km from the plant.

There is no external engineering contractor for the project; the EPC work for the project has been carried out in-house by Jaguar.

Active exploration

Jaguar plans to meet its production targets by carrying out an active exploration programme in the proximity of Paciência where additional mineralised zones are known to exist.