Gold exploration company Amarillo Gold has signed an agreement with power utility Enel Brasil to build a dedicated power line to its Mara Rosa property in the Brazilian state Goiás, marking a step forward for its Posse Gold Mine.

The Posse gold project is an open-pit gold mining project located on the Mara Rosa gold property. It has an initial operational life of ten years.

Estimated to cost R$36m ($6.65m), the 67km-long 138kV transmission line will supply power to support operations at the Posse mine by connecting the open-pit mine with the Porangatu substation.

Construction on the power line is planned to commence upon securing a required permit. Work is expected to take approximately 12 months to complete.

Amarillo Gold Brazil country manager Arão Portugal said: “Once complete, this power line will be a much-needed lasting legacy, enhancing the power grid infrastructure of the communities in and around Mara Rosa.

“It also represents our commitment to operational excellence and building strong local infrastructure.”

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By GlobalData

With support from Enel Brasil, Amarillo Gold is responsible for the engineering and permitting process of the transmission line.

Amarillo CEO Mike Mutchler said: “We have achieved another important milestone in Posse’s development, even as we wait for the License to Install (LI) from the state regulators.”

As per the estimates, the Posse Gold Mine has proven and probable reserves of 23.8Mt, grading 1.18g/t Au and containing 902,000oz of gold.

Construction on the gold mine is scheduled to begin in the first half of this year with commercial operations planned to be achieved by the end of next year.

The pre-feasibility study (PFS) for the Amarillo’s Posse gold deposit in the Mara Rosa gold project was completed in 2011.