Cabral Gold Inc. sells US$5 million royalty to Osisko Gold Royalties Ltd.

Cabral Gold (#CBR), listed on the TSX-V exchange, has sold a 1% net smelter return (NSR) royalty on the Cuiú Cuiú #Gold Project, located in #Brazil, to Osisko Gold Royalties Ltd for a total cash consideration of US$5 million.

The Cuiú Cuiú Project contains over 1 million ounces of gold with NI 43-101 compliant indicated mineral resource estimate of 604,000oz at an average grade of 0.87 g/t and 534,500 oz at an average grade of 0.84 g/t gold inferred category. Of these gold ounces, 232,900 are open-pitiable oxide ounces that could be amenable to heap-leach processing.

Cabral has commenced a pre-feasibility study to assess the possibility of developing a trial mining operation and heap leach recovery circuit on the near-surface free digging gold-in oxide saprolitic material. The study is due to be completed in Q4 2023 and is anticipated to be the base for which the construction decision for near-term trial mining and heap-leach processing will be made.

Due to the soft and friable nature of oxide deposits, they tend to be free-digging, and can be processed with minimal comminution with gold extraction using simple heap-leaching techniques. As a result, these styles of operation tend to have both low capital costs and operational costs, making them economically very attractive.

By focusing on near-term oxide production, Cabral Gold can generate significant returns from a low initial investment and use the proceeds to fund the ongoing exploration and development of additional resources at the Cuiú Cuiú Project, reducing the company’s reliance on dilutive financings.

Additional metallurgical studies are underway but initial results on a composite sample of oxide material from the MG gold deposit at Cuiú Cuiú, returned gold recoveries of 82% after 70 days, 78% after 30 days and 70% after 15 days, demonstrating that the gold-in-oxide material is very amenable to heap-leach processing.

Cabral’s focus on near-term production should not be misconstrued by investors - that the company has fully defined the extent of gold mineralisation at the Cuiú Cuiú Project. Far from it, all the deposits included in the current mineral resource estimate at Cuiú Cuiú, remain open along strike and down dip. Additionally, new discoveries at Machichie and MG have also not yet been sufficiently drilled for inclusion in the resource estimate, with additional drilling these deposits will likely further expand the resource base (Figure 1).

The Osisko investment not only allows Cabral to accelerate the pace of its ongoing prefeasibility study but also provides strategic flexibility and optionality regarding any future project financing process.

For a royalty company of Osisko’s size (C$3.5 billion) to acquire a royalty on a pre-economic study project, is unusual and we assume is a testament to Osisko’s management’s belief in both Cabral’s management’s ability to commence near-term production but also the wider scale exploration potential of the Cuiú Cuiú Project.

#mining #exploration

Source: Cabral Gold Inc.

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