VANCOUVER, Jan. 28, 2015 /PRNewswire/ - Brazil Resources
Inc. (TSX.V: BRI; OTCQX: BRIZF) ("Brazil Resources" or the
"Company") today issued a Letter to Shareholders regarding Company
plans for the coming year. The full report from Chairman
Amir Adnani follows.
Dear Fellow Shareholder,
On behalf of the board of directors and management of Brazil
Resources, I am pleased to provide the following update and outlook
for the Company early in 2015.
First and foremost we would like to thank all of our
shareholders for their continued support of the Company and our
long-term strategic plans. This support was most recently
demonstrated by the $4.46 million
private placement we completed to start the year, which was
oversubscribed and at a premium to market prices including strong
participation by management, our board and existing institutional
shareholders.
Market Conditions and Growth Strategy
Since our initial public offering in 2011, our strategy has been
to take advantage of the opportunities presented by challenging
market conditions during the four-year bear market in the junior
resource space and to grow our resource base through accretive
acquisitions.
To that end, 2014 was a transition year for the Company
following the acquisition of Brazilian Gold Corporation ("BGC").
This transaction significantly expanded our resource base with a
91% increase in the indicated category to 31.9 Mt grading 1.46 g/t
for 1.5 Moz and with a 184% increase in the inferred category to
71.8 Mt grading 1.06 g/t for 2.4 Moz. Additionally, this
acquisition gave BRI leverage to an exciting uranium exploration
property, the Rea project, with potential to host high-grade
uranium mineralization located in Canada's Western
Athabasca Basin. Areva, one of the largest nuclear companies
in the world, is our partner on this project.
The combination of the rise in the spot uranium price and the
increasing momentum for discovery and exploration in Canada's Western
Athabasca Basin provides us the opportunity to capitalize on
our Rea project. We are currently exploring ways to unlock
the value of this asset for our shareholders, including potentially
a spin-out of the asset, outright sale and other potential
options.
The Company's aggressive growth strategy in 2015 remains
unchanged from 2014. In carrying out our plans, we strive to remain
fiscally disciplined and to only execute transactions that we
believe present a significant value proposition. Our goal is to
identify and complete transactions involving projects with
relatively low carrying costs and that are at an advanced stage
with defined resources and viability in current market
conditions.
When we completed our initial public offering, our Company had
one early exploration-stage project. Since then, we have taken
advantage of market conditions and expanded our project and
resource base to include, among others:
- Cachoeira Gold Project, Para State, Brazil – Acquired from Luna Gold Corp. in
2012. Since acquiring the project, we have completed an updated
National Instrument 43-101 ("NI 43-101") technical report, which
reported an indicated resource of 786,737 ounces of gold (17.4
million tonnes grading 1.40 g/t gold) and an inferred resource of
563,200 ounces of gold (15.6 million tonnes grading 1.12 g/t gold),
using a 0.35 g/t gold cutoff. We have commenced environmental and
mine permitting for the project, including preliminary engineering
studies required for permitting purposes.
- Sao Jorge Gold Project, Para State, Brazil – Acquired as part of our
acquisition of BGC in November 2013.
In February 2014, we filed a NI
43-101 technical report for this project, which, estimated an
indicated resource of 715,000 ounces of gold (14.42 million tonnes
at 1.54 g/t gold) and an inferred resource of 1,035,200 ounces gold
(28.19 million tonnes at 1.14 g/t gold), using a 0.3 g/t gold
cutoff. This resource estimate is coincident with a geophysical
anomaly with 50% of this anomaly untested. Exploration to date has
focused on a small area (10% of the project area) surrounding the
deposit with most of this large property (584 sq km) unexplored. We
believe there is potential to expand the existing resource with
additional drilling as well as to identify new areas of
mineralization.
Since acquiring the project, a final report on the exploration
concession overlying the deposit was submitted to the DNPM
requesting that it be converted to a mining concession. Once the
DNPM has approved the request, we plan to initiate the requisite
baseline environmental studies and additional engineering studies
in preparation for applying for the necessary permits to further
progress the project.
- Boa Vista and Surubim Projects, Para State, Brazil – Acquired as part of the
BGC transaction. In February 2014, we
filed NI 43-101 technical reports, which estimated an inferred
resource of 336,000 ounces of gold (8.47 million tonnes at 1.23 g/t
gold), using a 0.5 g/t gold cutoff, for the Boa Vista Project and
an inferred resource of 503,000 ounces of gold (19.44 million
tonnes grading 0.81 g/t gold), using a 0.3 g/t gold cutoff, for the
Surubim Project. Both projects have only had initial drilling
completed and our geological team has identified additional zones
for follow-up.
- Artulandia Project, Goias State, Brazil – A polymetallic discovery made by
Brazil Resources' geological team. Twobase metal horizons with
precious metal credits have been identified and measure at least
2,000 m by 250 m. Geological features are suggestive of a
gold- and zinc-rich volcanogenic massive sulphide deposit. In
2011, we entered into an option agreement and currently own 100%
interest in this project.
Uranium Opportunity
In addition to the above gold projects, as part of our
acquisition of BGC, we acquired a 75% interest in the Rea uranium
project, which covers approximately 88,400 hectares and is located
in the western portion of the Athabasca Basin. The Athabasca Basin is one of the world's most
prolific regions for high-grade uranium deposits, however,
historically most of the exploration and discoveries have been
confined to the eastern part of the basin. The recent discovery of
the Patterson Lake deposit, the third largest deposit in the Basin,
indicates potential of this underexplored western portion of the
Basin. We believe our Rea project gives the Company a very unique
exposure to uranium in addition to our gold focus. Areva is the
Company's partner in the project, holding a 25% ownership
interest.
The Rea uranium project surrounds Areva's Maybelle high-grade
uranium deposit. Prior operators have expended over $10 million on exploration activities at the
project. In 2014, we completed an initial NI 43-101 technical
report on the project. The report identified a number of targets
that have potential to host unconformity-type uranium
mineralization, based on, among other things, results of airborne
and ground geophysical surveys and the results of limited drilling
to date. Since mid-2014, uranium prices have increased by
approximately 35%. If this trend continues in 2015, highly
prospective exploration projects such as the Rea project will
benefit.
Executive Appointments in 2014
2014 also saw the Company make two key executive appointments.
Garnet Dawson was appointed Chief
Executive Officer and Paulo Pereira
was appointed President of the Company. Mr. Dawson was formerly the
Company's technical director and has extensive mineral exploration
and development experience. He previously served as BGC's
VP-Exploration, where he and his team were responsible for the
advancement of the Sao Jorge Project and for developing the
Company's portfolio in Brazil.
Mr. Pereira has over 25 years of experience in exploration and
development of mining projects in Brazil and Canada. Based in Brasilia, he most recently served as the
Company's VP-Exploration and Country Manager for the past four
years.
Our board of directors believes that these management
appointments will assist the Company to progress our existing
projects and to identify potentially accretive opportunities.
Private Placement
Finally, we recently completed a $4.46
million private placement, which was oversubscribed and
included a large degree of participation by insiders and existing
shareholders. The placement strengthens our balance sheet and
positions us to take advantage of additional opportunities
presented in 2015.
Going Forward
We expect 2015 to be another exciting year for our Company and
its shareholders. We plan to continue our existing long-term
strategy of identifying and executing accretive acquisitions of
advanced gold projects. We believe that the continued depressed
conditions in the mining markets will present more of these
opportunities. With our experienced team and our strong balance
sheet, we believe we are well positioned to capitalize on our
strategy. We look forward to reporting further progress to you
throughout 2015.
Thank you again for your confidence in management. We welcome
your continued participation in the Company. Please call us at
1-855-630-1001, or email info@brazilresources.com with any
questions or comments. Please visit www.brazilresources.com to keep
current.
Yours truly,
Amir Adnani
Chairman
Brazil Resources Inc.
Technical Information
Paulo Pereira, the Company's
President, has supervised the preparation of, and reviewed the,
technical information contained in this document. Mr. Pereira holds
a Bachelor degree in Geology from the Universidade do Amazonas in
Brazil, is a qualified person as
defined in NI 43-101 and is a member of the Association of
Professional Geoscientists of Ontario.
For further information regarding our Cachoeira, Sao Jorge, Boa
Vista, Surubim (previously Rio Novo
project) and Rea projects, please refer to the following respective
reports: (i) independent technical report dated April 17, 2013 and amended and restated on
October 2, 2013 titled "Technical
Report and Resource Estimate on the Cachoeira Property, Para State
Brazil", prepared by Greg Mosher of
Tetra Tech, Inc.; (ii) independent technical reported by
Porfiro Rodriguez and Leonardo de Moraes Soares of Coffey Mining with
an effective date of November 22,
2013 and titled "Sao Jorge Project, Para State Brazil; (iii)
independent technical report by Jim Cuttle, Gary Giroux and Michael
Schmulian with an effective date of November 22, 2013 and titled "Technical Report,
Boa Vista Gold Project and Resource Estimate on the VG1 Prospect,
Tapajos Area, Para State, Northern
Brazil"; (iv) independent technical report by Jim Cuttle and
Gary Giroux with an effective date
of November 22, 2013 and titled
"Technical Report on the Rio Novo Gold Project and Resource
Estimate on the Jau Prospect, Tapajos Area, Para State,
Northern Brazil"; and (v)
independent technical report prepared by Irvine Annesley and Roy
Eccles with an effective date of September 12, 2014 and titled "Technical Report
on the Rea Property, Northeastern
Alberta," each of which is available under the Company's
profile at www.sedar.com.
About Brazil Resources Inc.
Brazil Resources Inc. is a public mineral exploration company
with a focus on the acquisition and development of projects in
emerging producing gold districts in Brazil, Paraguay and other parts of South America. Currently, Brazil Resources is
advancing its Cachoeira and São Jorge Gold Projects located in the
State of Pará, northeastern Brazil.
Cautionary Note
Investors are cautioned not to assume that any part or all of
mineral deposits in the "indicated" and "Inferred" categories will
ever be converted into mineral reserves with demonstrated economic
viability or that inferred mineral resources will be converted to
the measured and/or indicated categories through further drilling.
In addition, the estimation of inferred resources involves far
greater uncertainty as to their existence and economic viability
than the estimation of other categories of resources. Under
Canadian rules, estimates of Inferred Mineral Resources may not
form the basis of feasibility or other economic studies.
Forward Looking Information
This document contains certain forward-looking information
that reflect the current views and/or expectations of Brazil
Resources with respect to its business and future events, including
the potential to identify, execute and successfully integrate
additional acquisitions, the Company's future exploration plans and
the prospects of the Company's existing projects. Forward-looking
statements and information are based on the then-current
expectations, beliefs, assumptions, estimates and forecasts about
the business and the markets in which Brazil Resources operates.
Investors are cautioned that forward-looking statements and
information involve risks and uncertainties, including: the
inherent risks involved in the exploration and development of
mineral properties, the uncertainties involved in interpreting
drill results and other exploration data, the uncertainties
respecting historical resource estimates, the potential for delays
in exploration or development activities, the geology, grade and
continuity of mineral deposits, the possibility that future
exploration, development or mining results will not be consistent
with Brazil Resources' expectations, accidents, equipment
breakdowns, title and permitting matters, labour disputes or other
unanticipated difficulties with or interruptions in operations,
fluctuating metal prices, unanticipated costs and expenses,
uncertainties relating to the availability and costs of financing
needed in the future, commodity price fluctuations, regulatory
restrictions, including environmental regulatory restrictions, or
any failure to integrate acquired companies and projects into the
Company's existing business as planned. These risks, as well as
others, including those set forth in Brazil Resources' filings with Canadian
securities regulators, could cause actual results and events to
vary significantly. Accordingly, readers should not place undue
reliance on forward-looking statements and information. There can
be no assurance that forward-looking information, or the material
factors or assumptions used to develop such forward looking
information, will prove to be accurate. Brazil Resources does not
undertake any obligations to release publicly any revisions for
updating any voluntary forward-looking statements, except as
required by applicable securities law.
Neither the TSX Venture Exchange nor its Regulation Services
Provider (as that term is defined in the policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this news release.
SOURCE Brazil Resources Inc.