technical report on the turmalina gold project, pitangui, minas gerais

Transcription

TECHNICAL REPORT ON THE
TURMALINA GOLD PROJECT,
PITANGUI, MINAS GERAIS, BRAZIL
PREPARED FOR
JAGUAR MINING INC.
NI43-101 Report
Authors:
Graham G. Clow, P.Eng.
Wayne W. Valliant, P.Geo.
RPA
September 16, 2005
ROSCOE POSTLE ASSOCIATES INC.
Toronto, Ontario.
Vancouver, B.C.
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TABLE OF CONTENTS
PAGE
1 SUMMARY.................................................................................................................. 1-1
2 INTRODUCTION AND TERMS OF REFERENCE .................................................. 2-1
3 DISCLAIMER .............................................................................................................. 3-1
4 PROPERTY DESCRIPTION AND LOCATION ........................................................ 4-1
5 ACCESSIBILITY, CLIMATE, LOCAL RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY........................................................................................................... 5-1
6 HISTORY ..................................................................................................................... 6-1
7 GEOLOGICAL SETTING ........................................................................................... 7-1
Regional Geology ...................................................................................................... 7-1
Local Geology............................................................................................................ 7-4
Property Geology ....................................................................................................... 7-6
8 DEPOSIT TYPES......................................................................................................... 8-1
9 MINERALIZATION .................................................................................................... 9-1
10 EXPLORATION....................................................................................................... 10-1
11 DRILLING................................................................................................................ 11-1
12 SAMPLING METHOD AND APPROACH ............................................................ 12-1
13 SAMPLE PREPARATION, ANALYSES AND SECURITY ................................. 13-1
14 DATA VERIFICATION .......................................................................................... 14-1
15 ADJACENT PROPERTIES ..................................................................................... 15-1
16 MINERAL PROCESSING AND METALLURGICAL TESTING......................... 16-1
17 MINERAL RESOURCE AND MINERAL RESERVE ESTIMATES.................... 17-1
Mineral Reserves ..................................................................................................... 17-6
18 OTHER RELEVANT DATA AND INFORMATION ............................................ 18-1
Mining Operations ................................................................................................... 18-1
Processing .............................................................................................................. 18-10
Tailings .................................................................................................................. 18-10
Infrastructure.......................................................................................................... 18-11
Manpower .............................................................................................................. 18-12
Environment........................................................................................................... 18-13
Project Schedule/Life of Mine Plan....................................................................... 18-17
Capital Costs .......................................................................................................... 18-19
Operating Costs...................................................................................................... 18-21
Markets .................................................................................................................. 18-23
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Economic Analysis ................................................................................................ 18-23
19 INTERPRETATION AND CONCLUSIONS.......................................................... 19-1
20 RECOMMENDATIONS.......................................................................................... 20-1
21 REFERENCES ......................................................................................................... 21-1
22 SIGNATURE PAGE ................................................................................................ 22-1
23 CERTIFICATES OF QUALIFICATIONS .............................................................. 23-1
LIST OF TABLES
PAGE
Table 4-1 Turmalina Property Description .................................................................... 4-1
Table 6-1 AngloAshanti Gold, DD Highlights .............................................................. 6-2
Table 11-1 Jaguar Diamond Drill Highlights .............................................................. 11-2
Table 14-1 Diamond Drill Check Samples.................................................................. 14-1
Table 16-1 Metallurgical Testwork ............................................................................. 16-4
Table 17-1 Turmalina Mineral Resources ................................................................... 17-4
Table 17-2 Turmalina Mineral Reserves ..................................................................... 17-6
Table 18-1 Underground Equipment ......................................................................... 18-10
Table 18-2 Manpower................................................................................................ 18-13
Table 18-3 Life of Mine Producton Schedule............................................................ 18-18
Table 18-4 Capital Costs............................................................................................ 18-19
Table 18-5 Operating Costs ....................................................................................... 18-22
Table 18-6 Base Case Pre-Tax Cash Flow ................................................................ 18-25
LIST OF FIGURES
PAGE
Figure 2-1 General Location Map.................................................................................. 2-2
Figure 4-1 Mining Concessions ..................................................................................... 4-2
Figure 7-1 Regional Geology......................................................................................... 7-2
Figure 7-2 Stratigraphic Column ................................................................................... 7-3
Figure 7-3 Local Geology.............................................................................................. 7-5
Figure 7-4 Diamond Drill Cross Section ....................................................................... 7-7
Figure 10-1 Underground Exploration & Diamond Drilling....................................... 10-2
Figure 13-1 QA/QC-Blank Samples............................................................................ 13-2
Figure 13-2 Standard Reference Samples.................................................................... 13-3
Figure 13-3 Duplicate Samples.................................................................................... 13-4
Figure 13-4 Interlab Comparison Scatter Plot – Rejects ............................................. 13-5
Figure 13-5 Interlab Comparison RDP – Rejects (%) ................................................. 13-6
iii
Figure 13-6
Figure 13-7
Figure 16-1
Figure 17-1
Figure 17-2
Figure 17-3
Figure 18-1
Figure 18-2
Figure 18-3
Figure 18-4
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Interlab Comparison Scatter Plot - Pulps ................................................. 13-6
Interlab Comparison RDP – Pulps (%) .................................................... 13-7
Simplified Flowsheet ............................................................................... 16-5
Grade Distribution – Channel Samples.................................................... 17-2
Grade Distribution – Diamond Drill Samples.......................................... 17-3
Mineral Resources – Longitudinal Section .............................................. 17-5
Site Plan ................................................................................................... 18-3
Schematic Mine Cross Section................................................................. 18-5
Schematic Mine Long Section ................................................................. 18-6
Sensitivity Analysis................................................................................ 18-27
iv
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1 SUMMARY
Roscoe Postle Associates Inc. (RPA) has been retained by Jaguar Mining Inc.
(Jaguar) to prepare an Independent Technical Report compliant with NI43-101 on the
Turmalina Gold Project, (the Project), located in Pitangui, Minas Gerais, Brazil.
Mineração Serras do Oeste Ltda (MSOL), a division of Jaguar, purchased the
Property from AngloGold Ashanti (AngloGold) in 2004. The Project currently hosts a
reserve and Jaguar is preparing a feasibility study (the Study) to guide overall
development.
The Turmalina Property (the Property) lies approximately 120 km northwest of Belo
Horizonte and six kilometres south of the town of Pitangui, Minas Gerais, Brazil. The
Property comprises seven contiguous concessions covering an area of 5,337 ha.
The Property lies at approximately 700 m above sea level. The Pitangui area terrain
is rugged with numerous rolling hills.
The area experiences six months (April to
November) of warm dry weather with the mean temperature slightly above 20ºC,
followed by six months of tropical rainfall. Annual precipitation ranges from 1,300 mm
to 2,500 mm and is most intense in December and January.
Gold was first discovered in the area in the 16th century. During 1992 and 1993,
AngloGold mined 373,000 t of oxide mineralization from an open pit on the Turmalina
Zone, and recovered 35,500 oz of gold using heap leach technology. Subsequently,
AngloGold explored a possible downward sulphide extension by driving a ramp beneath
the pit and drifting on two levels in the mineralized zone at approximately 50 m and 75 m
below the pit floor.
GEOLOGY
The Turmalina Deposit is hosted by rocks of the Archean Rio das Velhas greenstone
belt in the Quadrilatero Ferrifero region, one of the major gold provinces in the world.
The Pitangui area is underlain by rocks of Archaean and Proterozoic age. Archaean units
1-1
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include a granitic basement, overlain by the Pitangui Group, a sequence of ultramafic to
intermediate volcanic flows and pyroclastics, and associated sediments. The predominant
rock types in the deposit are metamorphosed pelites and tuffs. Gold mineralization is
associated with higher levels of sericite, quartz, and biotite. Some fraction of the gold
mineralization in the Turmalina Deposit may be due to primary, exhalative deposition
associated with the banded iron formation, however, the deposit can be broadly classified
as epigenetic related to a mesothermal system that localized auriferous silicification in
local structural features within a wider shear zone.
The Turmalina Deposit comprises two zones: the Principal and NE Zones. The
Principal Zone strikes azimuth 110º, dips 55-60º. Gold grade zoning indicates a SE
plunge of approximately 65º. The zone is 200-250 m long and ranges in horizontal width
from two metres to 30 m, averaging approximately eight metres. The NE Zone lies 50 m
to 100 m east of the Principal Zone and has a similar attitude. It is approximately 200 m
long and ranges from one to 12 m in horizontal width, averaging approximately three
metres. Mineralization extends to at least 350 m below surface.
Since September 2004 Jaguar has completed a surface exploration program consisting
of 23 diamond drill holes for a total of 5,789 m.
MINERAL RESOURCES AND RESERVES
The mineral resource estimate, above a 1.0 g/t cutoff grade is shown in the following
table.
TURMALINA MINERAL RESOURCES
Jaguar Mining Inc.
Tonnes
Principal
Grade Cont Au
Turmalina Project
NE
Tonnes Grade Cont Au
(t)
(g/t)
(oz)
Measured
390,000
5.16
65,000
Indicated
1,125,000
7.64
276,000 303,000
5.95
Meas + Indic
1,515,000
7.00
341,000 303,000
584,000
8.15
153,000 248,000
Inferred
(t)
1-2
(g/t)
(oz)
Tonnes
Total
Grade Cont Au
(t)
(g/t)
(oz)
390,000
5.18
65,000
58,000
1,428,000
7.27
334,000
5.95
58,000
1,818,000
6.83
399,000
6.12
49,000
832,000
7.55
202,000
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The mineral resources are inclusive of mineral reserves.
Mineral reserves have been estimated based on the mineral resources shown in the
above table. Mining factors have been applied. The break even cutoff grade based on
operating costs of $26.40 per tonne and a gold price of $375 is approximately 2.4 g/t Au.
The incremental cutoff is approximately 1.4 g/t Au. Due to the lack of selectivity in the
mining method, all resources within the 1.0 g/t Au envelope were considered for reserves.
TURMALINA MINERAL RESERVES
Jaguar Mining Inc.
Tonnes
Principal
Grade Cont Au
Turmalina Project
Tonnes
NE
Grade
Cont Au
Tonnes
Total
Grade
Cont Au
(t)
(g/t)
(oz)
(t)
(g/t)
(oz)
411,000
6.2
82,000
(t)
(g/t)
(oz)
411,000
6.2
82,000
Probable
1,184,000
6.2
236,000
310,000
5.3
52,000
1,494,000
6.0
288,000
Total
Notes:
1.
2.
3.
4.
5.
1,595,000
6.2
318,000
310,000
5.3
52,000
1,905,000
6.0
370,000
Proven
Based on a gold price of $375 per ounce
Cut off grade = 1.0 g/t
Dilution overall = 15%
Extraction = 91%
Reserves estimated according to CIM definitions
PROJECT DESCRIPTION
Turmalina Project is presently the subject of a feasibility study (the Study) being
prepared for Jaguar by TechnoMine Services LLC of Salt Lake City, Utah. For the
purposes of this report, RPA reviewed the September 6, 2005 Version 12C draft of the
Study. In RPA’s opinion, the Study is complete in all material aspects. RPA also
reviewed the backup information to the Study and had full access to all reports and data.
TechnoMine has prepared the Study using its own professional staff, both in Salt Lake
and Belo Horizonte, independent consultants as required, and Jaguar technical staff.
The key design aspects of the Study are as follows:
•
•
•
•
•
•
Mine life:
5.5 years
Pre- production period: 8 months
Start of construction:
November 2005
Start of production:
July 2006
Total millfeed:
1,905,000 tonnes at a grade of 6.0 g/t Au
Operations 360 days per year
1-3
•
•
•
•
•
•
•
•
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Open pit production:
20,000 tonnes per month ore for a total open pit
reserve of 88,000 tonnes at a grade of 4.2 g/t Au and a strip ratio of 1.43:1;
950 tpd ore and approximately 1,400 tpd waste.
Underground production: 30,000 tonnes per month at a grade of 6.1 g/t Au;
1,000 tonnes per day.
Underground mining methods: Longhole sublevel stoping and mechanized
cut and fill. Ramp access and truck haul to the primary crusher on surface.
Backfill method: Paste fill in longhole stopes, loose waste fill in cut and fill.
Process flowsheet comprising crushing, grinding, CIP, and ADR.
Mill throughput of 1,000 tonnes per day from underground and open pit
production, or approximately 360,000 tons per year.
Gold recovery of 90% as doré.
Tailings disposal in the mined out open pit.
PERMITTING
Implementation of a mining project in Brazil entails application for a Licença Prévia
(LP). The application for a LP must be supported by studies that describe the impact on
the physical, biological, and anthropological ecosystems as well as plans for mitigation
and closure.
Upon approval of the foregoing studies, the applicant is granted an Implementation
License (LI) that allows the completion of work, such as the erection of the mineral
processing plant, construction of the tailings dam, opening of accesses, development of
the underground mine, installation of the infrastructure, and preparation of the waste
dump.
After obtaining the LI and mining concession, the company can apply for the
Operation License (LO) that permits the start-up of operations. Approval of the LO is
contingent on meeting all the environmental requirements of the construction of the
surface facilities and underground development.
In April 2005, Jaguar initiated the environmental permitting process by applying for
the LP and submitted the required studies. The environmental permitting covers an area
of approximately 30 ha and comprises the following elements.
•
•
•
•
Open pit
Underground mine
Waste dump
Support buildings, e.g. Administration offices, change house, cafeteria
1-4
•
•
•
As of
Processing plant
Paste fill plant
Drainage management system
the date of this report, the LP had yet to be issued.
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Construction and
development work cannot commence until the required permits (LP and LI) are issued.
PROJECT SCHEDULE/LIFE OF MINE PLAN
The Project schedule is presently based on a generic start date that will be determined
when the required permits are issued. Construction and development is scheduled to take
place over a 12 month period. In the generic schedule, startup of the plant is scheduled at
the start of Year 1. Detailed engineering and procurement are scheduled to start in the
first quarter of Year -1. Pre-production underground development is scheduled to start in
the second quarter of Year -1 and the first stoping ore is scheduled for the third quarter of
Year -1. Open pit mining will commence in the third quarter of Year -1 and will be
completed before the plant startup.
At startup, there will be an ore stockpile of
approximately 95,000 tonnes.
Plant construction is scheduled to commence in the second quarter of Year -1 and
will be completed at the end of Year -1 over a period of eight months. Commissioning
and testing is scheduled to start two months before startup. The schedule includes an
allowance for lower throughput at startup, commencing at 18,000 tonnes per month in
Month 1, increasing to 30,000 tonnes per month in Month 5.
In RPA’s opinion the pre-production schedule – essentially eight months - is
ambitious for a greenfields project, but is likely achievable as the Project is relatively
simple and most of the key large items (mills and crushers) have been procured. There is
some downside risk of perhaps one or two months delay in startup, however, this is not
critical to the success of the Project.
CAPITAL COSTS
Total pre-production capital costs have been estimated by MSOL and TechnoMine
and are summarized in the following table. The costs include a contingency of 10%.
1-5
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CAPITAL COSTS
Jaguar Mining Inc.
Turmalina Project
US$ ‘000’s
Open Pit Mining
297
Underground Mine Development
1,297
Underground Mine Equipment
3,837
Plant Equipment
1,755
Plant Construction
7,104
Infrastructure Construction
997
Land Acquisition
1,556
EPCM
2,092
Commissioning
36
Environment
416
Total
$19,387
Mine equipment includes purchases totalling $ 1.8 million that will be made in the
first month after startup. This will include more LHD’s and trucks. Ongoing sustaining
capital is estimated to be US$0.5 million over the five year mine life. Future land
acquisition costs of US$0.35 million have been included in 2007. Closure costs are
estimated to be US$1.2 million. The closure cost is assumed to be offset by US$2.1
million in salvage value.
OPERATING COSTS
Operating costs have been estimated from first principles and are shown in the
following table.
OPERATING COSTS
Jaguar Mining Inc.
Turmalina Project
US$/ tonne milled
Underground Mining
11.16
Processing
12.66
G&A
2.39
Environment
0.18
Total
$26.40
1-6
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ECONOMIC ANALYSIS
The Base Case estimated cash flow for the life of mine is shown in the following
table. The projection is based on the following parameters.
PHYSICALS
•
Mine life:
5.5 years
•
Pre- production period:
8 months
•
Total millfeed:
•
•
Open pit production: 20,000 tonnes per month ore for a total open pit reserve
of 88,000 tonnes at a grade of 4.2 g/t Au and a strip ratio of 1.43:1; 950 tpd
ore and approximately 1,400 tpd waste.
•
•
•
•
Total gold produced: 333,000 ounces, average production is 60,000 ounces
per year.
COSTS
•
Operating cost: $26.40 per tonne milled, ranging from $23.35 per tonne to
$29.21 per tonne.
•
Capital cost: Pre-production capital is estimated to be $19.4 million
•
Sustaining capital: Ranges from $60,000 to $100,000. Underground mine
development is included in operating costs.
•
Closure costs: $1.1 million, offset by estimated salvage costs of $2.0 million.
•
Exchange rate: US$1.00 = 2.75 Reals
REVENUE
•
Gold price:
•
Transport and insurance: $3.60 per ounce
•
Refining:
$375 per ounce
1% of gross sales
1-7
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•
CFEM (federal) royalty: 1% of gross sales
•
Royalty to previous owners:
3% NSR, effective
The pre-tax cash flow at $375/oz gold is $46.7 million. At a discount rate of 12%, the
pre-tax NPV is $22.3 million. The Gold Institute Total Cash Cost is $176 per ounce.
The Gold Institute Total Production Cost is $235 per ounce.
Jaguar’s after tax NPV estimate at 12% discount rate is $8.3 million, with a project
IRR of 31.8%. RPA did not review Jaguar’s tax model.
1-8
Yr-1
Mining
Open Pit Ore
Underground Development Ore
Underground Stoping Ore
Total
1-9
Open Pit Waste
Strip Ratio
Underground Waste
Total Waste
Processing
Revenue
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
000 tonnes
000 tonnes
Plant feed
Grade
Recovery
000 tonnes
g/t Au
Production
000 oz
NSR
49
5.9
186
4.5
235
4.8
4.8
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
52
6.3
308
5.3
360
5.5
5.5
33
6.4
327
7.0
360
7.0
7.0
1
4.2
359
6.9
360
6.9
6.9
360
5.6
360
5.6
5.6
84
210
75
75
36
36
13
13
0
0
330
4.6
90%
360
5.5
90%
360
7.0
90%
360
6.9
90%
360
5.6
90%
135
7.5
90%
44
57
73
72
58
29
135
7.5
135
7.5
7.5
Total
88
4.18
142
6.1
1,675
6.1
1,905
6.0
6.0
126
210
463
-
1,905
6.0
90%
333
US$/oz
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
375
16,419
157
164
163
15,935
583
15,352
375
21,321
204
213
211
20,692
827
19,865
375
27,286
261
273
270
26,481
1,003
25,479
375
27,068
259
271
268
26,270
996
25,274
375
21,778
209
218
216
21,136
841
20,295
375
11,003
105
110
109
10,679
524
10,155
375
124,875
1,196
1,249
1,237
121,193
4,773
116,420
US$/ t ore
46.52
55.18
70.77
70.21
56.38
75.22
61.11
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Gold Price
Gross Revenue
Transport
1% Refining
1% CFEM Tax
Sub-total
3% Royalty
Revenue
88
4.2
7
3.9
0
0.0
95
4.2
4.2
126
1.43
3
129
Yr 1
JAGUAR MINING INC. - TURMALINA PROJECT
PRE-TAX CASH FLOW - $375/OZ GOLD
Open Pit Mining
Mine Equipment
Plant Equipment
Plant Construction
Land Acquisition
EPCM
Commisioning
Environment
Sustaining Capital
Salvage
Total
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
Operating Costs
Open Pit Mining
Underground Mining
Processing
G&A
Environment
Total
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
Open Pit Mining
Open Pit Mining
Underground Mining
Processing
G&A
Environment
Total
US$/t moved
US$/t milled
US$/t milled
US$/t milled
US$/t milled
US$/t milled
US$/t milled
1-10
Capital Costs
Pre-Tax Cash Flow
Operating1
Capital
Total2
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Total
1,297
297
2,061
1,755
7,104
997
1,556
2,092
0
393
0
0
17,552
17,552
0
0
1,890
0
0
0
350
0
36
33
0
0
2,309
2,309
0
4,512
4,179
826
121
9,638
9,638
0
0
64
0
0
0
0
0
0
21
60
0
144
144
0
5,019
4,559
826
97
10,501
10,501
0
0
0
0
0
0
0
0
0
21
60
0
81
81
0
4,401
4,559
826
64
9,850
9,850
0
0
0
0
0
0
0
0
0
3
100
0
103
103
0
3,223
4,559
826
33
8,641
8,641
0
0
0
0
0
0
0
0
0
0
100
0
100
100
0
2,999
4,559
826
24
8,408
8,408
0
0
0
0
0
0
0
0
0
1,157
0
(2,046)
(890)
(890)
0
1,110
1,710
413
12
3,244
3,244
1,297
297
4,014
1,755
7,104
997
1,906
2,092
36
1,628
320
(2,046)
19,399
19,399
0
21,264
24,125
4,544
351
50,283
50,283
11.16
12.66
2.39
0.18
26.40
0
0
US$ '000
Cumulative US$ '000
(17,552)
(17,552)
Pre-tax NPV US$ '000
22,366
12%
US$/oz
US$/oz
US$/oz
Notes: 1. Equivalent to Gold Institute Total Cash Cost.
2. Equivalent to Gold Institute Total Production Cost.
13.67
12.66
2.50
0.37
29.21
13.94
12.66
2.30
0.27
29.17
12.23
12.66
2.30
0.18
27.36
8.95
12.66
2.30
0.09
24.00
8.33
12.66
2.30
0.07
23.35
8.22
12.66
3.06
0.09
24.03
3,405
(14,147)
9,219
(4,927)
15,548
10,621
16,529
27,150
11,787
38,937
7,800
46,737
244
210
160
145
170
139
46,737
176
58
235
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Unit Cost of Production
Yr-1
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SENSITIVITY ANALYSIS
The following figure shows the project sensitivity to various factors, including:
•
Head Grade
•
Gold Price
•
Operating Cost
•
Capital Cost
32
30
Pre-tax NPV @ 12% (US$ '000)
28
26
24
Gold Price
Head Grade
22
Operating Cost
20
Capital Cost
Exchange Rate
18
16
14
12
10
-10%
0
10%
The Project is most sensitive to gold price and head grade. At a current gold price of
$450 per ounce, the pre-tax NPV at 12% discount rate is $40 million. The break even
gold price resulting in zero pre- tax NPV at 12% is approximately $260 per ounce.
The exchange rate used for the Project is US$1.00 = 2.75 reals, vs the current rate of
2.33 reals. The rate has been used based on economic forecasts by Brazilian banks. At
the present rate of 2.33 on all operating and capital costs, the pre-tax NPV at 12% is
approximately $13 million. Similarly, the Total Production Cost rises from $235 per
ounce to $272 per ounce.
1-11
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Other key sensitivities, in addition to the gold price risk, are dilution, extraction, and
capital cost. The sensitivities are summarized in the following table as pre-tax NPV at
12% discount.
Lower Case
Base Case
Higher Case
US$325
US$375
US$425
US$13 million
US$22 million
US$32 million
-15%
15%
+15%
US$33 million
US$22 million
US$12 million
95%
100%
US$19 million
US$22 million
-15%
US$19.4 million
+15%
US$25 million
US$22 million
US$20 million
-15%
US$26 per t milled
+15%
US$27 million
US$22 million
US$18 million
-5%
90%
+5%
US$19 million
US$22 million
US$26 million
Gold Price
Dilution
Stope Extraction
Capital Cost
Operating Cost
Grade/Recovery
EXPANSION POTENTIAL
The Inferred Resources for the Project are estimated to be approximately 830,000
tonnes at 7.5 g/t Au, or approximately 200,000 contained ounces. In RPA’s opinion,
there is very good potential to convert these resources to reserves with more drilling and
an update to the feasibility study. At the Base Case scenario of $375 per ounce gold,
each extra year of production of 60,000 ounces or more will add approximately $10
million to $12 million to the Project pre-tax operating cash flow prior to capital
(undiscounted). Any material expansion beyond the Base Case will require construction
of a tailings pond. The upgrading of resources to reserves should be a priority for Jaguar.
INTERPRETATION AND CONCLUSIONS
The feasibility work completed by Jaguar to date has shown that the Turmalina
Project is robust at current gold prices and shows an acceptable operating margin at the
Base Case gold price of $375 per ounce. The feasibility study is not yet complete,
1-12
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however, most of the key components are sufficiently advanced in all material aspects to
allow Project feasibility to be established.
RPA offers the following comments as observations on the Project development plan:
•
Project development cannot commence until the proper permits are
received.
•
The Project development schedule is ambitious for a greenfields project
(eight months) and there is the risk of some delay of one or two months in
startup
•
There is some risk related to the size of the underground openings to be
backfilled. Consideration should be given to filling smaller openings on a
more frequent basis.
•
The use of the open pit for tailings deposition is nominally an expedient
alternative and, while the risks of inrush to the underground mine have
been studied, this needs to be clearly discussed in the feasibility study.
•
The paste fill plant design, operating parameters, and placement system
are largely conceptual at the present time, however, RPA believes that the
cost estimates are reasonable.
•
Stope extraction does not include and allowance for ore loss, however, the
overall extraction of 91% should be adequate.
•
There exists good potential to upgrade mineral resources at depth and the
Project has the potential for a significantly longer mine life.
RECOMMENDATIONS
Based on the review, RPA makes the following recommendations:
1. Continue to advance the Project to development, recognizing the potential delays
due to the permitting process.
2. Carry out the proposed drill program to upgrade resources below the 400 m
elevation.
3. Continue the feasibility work, with a particular focus on the following:
a. Finalize the backfill system and method, including;
1-13
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i. Assessment of crown pillar stability to prevent inrush into the mine
workings.
ii. Assessment of proper sealing of the vent raise connection from the
bottom of the open pit to the mine.
iii. Review of the effect of water on the tailings during the rainy
season and the prevention of liquefaction.
b. Alternative backfill sequences should be studied to allow for stope ground
instability.
c. Ensure all estimates are supported by independent verification of costs.
d. Review the cost and delivery of key equipment to ensure that the costs
properly reflect the current high cost and long delivery of capital items in
the worldwide mining industry.
e. Ensure all aspects of the study are documented in sufficient detail to allow
efficient third party review.
4. Include sensitivity analyses for dilution at 20% for longhole stoping and
extraction of 95% for longhole stoping, in addition to pillar allowance.
5. Prepare benchmark reviews against other Brazilian projects for dilution and
extraction parameters, and capital and operating costs.
6. Complete the purchase of surface rights.
7. Carry out benchmarking of operating and capital costs against other similar
projects in Brazil.
1-14
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2 INTRODUCTION AND TERMS OF
REFERENCE
Roscoe Postle Associates Inc. (RPA) has been retained by Jaguar Mining Inc.
(Jaguar) to prepare an Independent Technical Report compliant with NI43-101 on the
Turmalina Gold Project, (the Project), located in Pitangui, Minas Gerais, Brazil (Figure
2-1). Mineração Serras do Oeste Ltda (MSOL), a division of Jaguar, purchased the
Property from AngloGold Ashanti (AngloGold) in September, 2004, and has
subsequently conducted an exploration program consisting of 23 diamond drill holes, and
is preparing a feasibility study (the Study). The Study is being prepared for Jaguar by
TechnoMine Services LLC (TechnoMine) of Salt Lake City, Utah.
Graham Clow, P.Eng., Consulting Mining Engineer and Principal of RPA, and
Wayne Valliant, P.Geo, Associate Consulting Geologist with RPA, conducted a site visit
June 7-9, 2005. Mr. Clow reviewed the mine design and plan, metallurgical testwork,
infrastructure, and financial analyses.
Mr. Valliant reviewed the geology, mineral
resources, and mining reserves. This report has been prepared under the supervision of
Mr. Clow, who also prepared sections 1-3, 16, and 18-20. Mr. Valliant prepared sections
2-15 and 17 of the report.
During the site visit and preparation of this report, discussions were held with:
Adriano Luiz Do Nascimento
Vice-President, Exploration & Engineering, MSOL
Jaimie Duchini
Chief Geologist, MSOL
William Fagundes Campos
Sr. Exploration Geologist, MSOL
Angelo Afonso
Operations Manager
Rogério Moreno
Moreno & Associates
Ivan C. Machado
Principal, TechnoMine Services
2-1
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Georgetown
GUYANA
VENEZUELA
48°
Paramaribo
Cayenne
SURINAME
550,000
600,000
7,850,000
COLOMBIA
36°
FRENCH GUIANA
Boa Vista
N
650,000
7,850,000
60°
72°W
Atlantic
Ocean
Sete Lagoas
Macapá
Pedro Leopoldo
Pitangui
Santa Inês
Betim
Fortaleza
Ibirité
Rio Acima
Itauna
7,750,000
Pôrto Franco
Itabirito
Picos
Moeda
Cachimbo
Rio Branco
km
Miracema do 50
Norte
550,000
600,000
Gurupi
Juázeiro
Recife
Maceió
650,000
Aracaju
Barreiras
Vilhena
Natal
Mariana
João
Pessoa
Ouro Preto
Ara
gua
ia
BRAZIL
Humaitá
Teresina
Brumadinho
Divinópolis
JacareAcanga
Pôrto Velho
7,800,000
7,800,000
Itaituba
Benjamin Constant
Caeté
Sabará
Raposos
Santa
Nova Lima
Barbara
Contagem
ins
Tocant
Careiro
Santa Luzia
Belo
Horizonte
Sâo Luís
Pará de Minas
Altimara
Santarém
0°
Ribeirão
das Neves
7,750,000
n
o
Amaz
Manaus
Lagoa Santa
TURMALINA
TURMALINA
Belém
PROJECT
PROJECT
12°S
Ibotirama
Xi
ng
u
PERU
Salvador
Brasilia
Vitória de Conquista
Cuiabá
La Paz
TURMALINA
PROJECT
BOLIVIA
Goiânia
Pirapora
Uberlândia
Belo Horizonte
Campo Grande
Vitória
Dourados
Antofagasta
Volta Redonda
PARAGUAY
CHILE
Pôrto Seguro
Montes Claros
Minas Gerais
State
Niterói
Rio de Janeiro
Sâo Paulo
Santos
Foz do Iguaçu
Asunción
Pacific
Ocean
ARGENTINA
Pelotas
URUGUAY
Buenos Aires
0
200
400
Legend:
Florianópolis
Sâo Borja
Pôrto Alegre
Santiago
24°
Curitiba
National Capital
Department Capital
Secondary City
Osório
Department Border
Road
Railroad
International Border
Montevideo
600
800 1000
Kilometres
BRAZIL
Figure 2-1
Jaguar Mining Inc.
Turmalina Project
Minas Gerais State, Brazil
South
America
General Location Map
September 2005
2-2
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LIST OF ABBREVIATIONS
All monetary units in this report are US$ unless otherwise specified.
µ
micro (one-millionth)
km/h
°C
degree Celsius
km
°F
degree Fahrenheit
kPa
kilopascal
µg
microgram
kVA
kilovolt-amperes
A
ampere
kW
kilowatt
a
annum
kWh
kilowatt-hour
m /h
cubic metres per hour
l
liter
CFM
cubic metres per minute
l/s
litres per second
bbl
barrels
m
metre
Btu
British thermal units
M
mega (million)
C$
Canadian dollars
m2
3
2
3
kilometre per hour
square kilometre
square metre
cal
calorie
m
cm
centimetre
min
cm2
ct
square centimetre
carat (0.2 grams)
masl
metres above sea level
mm
millimetre
d
day
mph
mile per hour
dia.
diameter
MVA
megavolt-amperes
dmt
dry metric tonne
MW
megawatt
dwt
dead-weight ton
MWh
megawatt-hour
3
cubic metre
minute
ft
foot
m /h
cubic metres per hour
ft/s
foot per second
opt, oz/st
ounce per short ton
ft2
square foot
oz
troy ounce (31.1035g)
3
cubic foot
oz/dmt
ounce per dry metric tonne
g
gram
ppm, ppb
part per million; billion
G
giga (billion)
psia
pound per square inch absolute
gal
Imperial gallon
psig
pound per square inch gauge
g/l
gram per litre
s
second
g/t
gram per tonne
st
short ton
gpm
Imperial gallons per minute
stpa
short ton per year
gr/ft3
grain per cubic foot
stpd
short ton per day
gr/m3
grain per cubic metre
t
metric tonne
hr
hour
tpa
metric tonne per year
ha
hectare
tpd
metric tonne per day
hp
horsepower
US$
United States dollar
in
inch
USg
United States gallon
in2
square inch
USgpm
US gallon per minute
j
joule
v
volt
k
kilo (thousand)
w
watt
kcal
kilocalorie
wmt
wet metric tonne
kg
kilogram
yd3
cubic yard
km
kilometre
yr
year
ft
2-3
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3 DISCLAIMER
This report has been prepared by RPA for Jaguar. The information, conclusions,
opinions, and estimates contained herein are based upon:
o Information available to RPA at the time of preparation of this report,
o Assumptions, conditions, and qualifications as set forth in this report, and,
o Data, reports, and opinions supplied by Jaguar and other third party sources
listed as references.
RPA relied on Jaguar for information regarding the current status of legal title,
property agreements, corporate structure, and environmental information and status.
3-1
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4 PROPERTY DESCRIPTION AND LOCATION
The Turmalina Property (the Property) lies approximately 120 km northwest of Belo
Horizonte and 6 km south of the town of Pitangui, Minas Gerais, Brazil.
The Property comprises seven contiguous concessions covering an area of 5,337 ha,
as summarized in Table 4-1 and illustrated in Figure 4-1. Jaguar acquired the Property
from AngloGold Ashanti in September, 2004, for $US 4.0 million, payable in three equal
installments of $1.35 million. Jaguar has 100% ownership subject to a 5% net revenue
interest up to $10 million and 3% thereafter, to an unrelated third party. In addition, there
is a 0.5% net revenue interest payable to the legal landowner.
TABLE 4-1 TURMALINA PROPERTY
DESCRIPTION
JAGUAR MINING INC.
TURMALINA PROJECT
DNPM Concession
832203/03
812004/75
803470/78
830027/79
812003/75
832643/03
831617/03
Area (ha)
996
880
952
120
980
550
859
4-1
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7,821,000
510,000
0
511,000
250
500
750
512,000
513,000
514,000
N
1000
7,821,000
DNPM 832203/03
DNPM 812004/75
Pontal II
Pontal
DNPM 830027/79
7,820,000
7,820,000
Metres
7,819,000
7,819,000
São João Riv
er
7,818,000
er
Riv
Faina II
7,818,000
rá
Pa
Faina I
Faina III
Turmalina
7,817,000
DNPM 812003/75
DNPM 803470/78
Satinoco Sudeste
7,816,000
Figure 4-1
Conceição do Pará
Jaguar Mining Inc.
Legend:
Turmalina Project
Exploration Permit
City
Mining Right
Open Pit
River
Road
Mining Concessions
Drainage
September 2005
Source: Jaguar Mining Inc., 2005
4-2
7,817,000
Satinoco
www.rpacan.com
5 ACCESSIBILITY, CLIMATE, LOCAL
RESOURCES, INFRASTRUCTURE AND
PHYSIOGRAPHY
The Property is accessed from Belo Horizonte by 120 km of paved highway
northwest to the town of Pitangui, then 6 km south by paved road. Pitangui is a town of
approximately 25,000 people.
The local economy is based on agriculture, cattle
breeding, and a small pig iron smelter.
Manpower, energy, and water are readily
available.
The Property lies at approximately 700 m above sea level. The Pitangui area terrain
is rugged with numerous rolling hills.
The area experiences six months (April to
November) of warm dry weather with the mean temperature slightly above 20ºC,
followed by six months of tropical rainfall. Annual precipitation ranges from 1,300 mm
to 2,500 mm and is most intense in December and January.
5-1
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6 HISTORY
Gold was first discovered in the area in the 16th century. AngloGold explored the
area between 1979 and 1988 using geochemistry, geophysics, and trenching, which led to
the discovery of the Turmalina, Satinoco, Faina, and Pontal Zones. During 1992 and
1993, AngloGold mined 373,000 t of oxide mineralization from an open pit on the
Turmalina Zone, and recovered 35,500 oz of gold using heap leach technology.
Subsequently, AngloGold explored a possible downward sulphide extension by driving a
ramp beneath the pit and drifting on two levels in the mineralized zone at approximately
50 m and 75 m below the pit floor. The underground workings were channel sampled,
collecting approximately 2,000 samples. RPA was unable to determine the methodology
of collection or analyses of the channel samples. The sample spacing is approximately
three metres along the length of the drifts and a maximum of one metre across the drift.
Based on the results of the underground exploration program, 22 diamond drill holes, for
a total of 5,439 m, were drilled from surface to test for a further downward extension of
the sulphide mineralization. Jaguar was able to obtain the AngloGold diamond drill logs,
although most of the core has been lost or destroyed. RPA was unable to determine the
sample method, analysis, security, or quality control used in the AngloGold drill
program. Table 6-1 summarizes the highlights of the AngloGold diamond drill program
as reported on the logs.
6-1
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TABLE 6-1 ANGLOASHANTI GOLD, DD HIGHLIGHTS
JAGUAR MINING INC.
HOLE NO. FROM
TO
CORE LT. DIP ~TRUE W. GRADE UNCUT GRADE CUT TO 30 g/t
(m)
(m)
(m)
Degrees
(m)
(g/t)
(g/t)
FMT-01
121.68
137.5
15.82
-45
15.8
6.36
142.28
144.99
2.71
2.7
21.59
17.53
FMT-02
95.49
97.07
1.58
-43
1.5
8.99
FMT-03
79.52
82.17
2.65
-59
2.2
3.44
83.73
86.26
2.53
2.1
3.33
FMT-04 No significant values
-52
FMT-05
153.07
155.88
2.81
-75
1.8
7.52
FMT-06
62.18
62.75
0.57
-74
0.4
6.53
69.89
76.98
7.09
4.5
5.27
156.25
156.69
0.44
0.3
15.59
-44
FMT-08
151.80
155.40
3.60
-69
2.60
2.48
FMT-09
83.84
85.54
1.70
-80
0.70
2.07
187.39
196.98
9.59
4
9.32
FMT-10
109.18
115.63
6.45
-60
5.40
4.79
FMT-11
13.53
16.75
3.22
-55
2.90
2.73
29.35
30.85
1.50
1.40
33.21
13.36
132.96
136.20
3.24
2.90
16.42
14.97
FMT-12
57.04
57.77
0.73
-85
0.40
11.71
170.76
172.78
2.02
1
4.15
178.20
180.11
1.91
1.00
11.27
FMT-13
140.08
141.89
1.81
-85
0.90
12.47
150.18
157.46
7.28
3.60
5.39
FMT-14
256.73
261.70
4.97
-87
2.20
9.91
267.93
273.60
5.67
2.60
8.47
FMT-15
184.46
186.15
1.69
-84
0.80
3.53
FMT-16
56.87
58.05
1.18
-81
0.70
4.49
198.88
200.40
1.52
0.90
3.77
207.08
207.66
0.58
0.30
16.44
FMT-17
539.40
545.09
5.69
-87
2.60
3.24
FMT-18
190.83
194.02
3.19
-85
1.60
7.40
FMT-19
255.82
256.24
0.42
-81
0.25
16.91
264.33
266.50
2.17
1.30
5.15
FMT-20
465.44
467.60
2.16
-87
1.00
8.41
548.30
549.58
1.28
0.60
5.36
-85
FMT-22
22.58
25.75
3.17
-80
1.90
3.67
35.85
41.80
5.95
3.60
8.00
55.08
60.00
4.92
3.00
7.61
192.42
193.00
0.58
0.30
11.98
221.20
240.40
19.20
11.50
15.24
15.17
6-2
www.rpacan.com
TechnoMine reports that AngloGold carried out the following work:
•
Metallurgical testwork in 1987 on 65 kg of mineralized core, 90% minus 200
mesh. Recovery by direct cyanidation (apparently bottle roll tests) yielded
91.4%.
•
Metallurgical testwork in 1992 on mineralized material from the 640 m level,
50 m below the pit floor. Recovery by direct cyanidation (apparently bottle
roll tests) yielded 90.3%.
•
Metallurgical testwork in 1993 on a 44.9 t sample, grading 5.84 g/t gold, from
the 640 and 626 m levels. Samples crushed to 90% and 100% minus 400
mesh yielded recoveries of 86% and 93% respectively, using direct
cyanidation (apparently tank tests).
•
Metallurgical testwork in 1994 on a 17,000 t bulk sample, grading 5.24 g/t.
The bulk sample was treated at AngloGold’s Nova Lima Pilot Plant, near Belo
Horizonte. The TechnoMine report states that the testwork confirmed earlier
metallurgical recovery estimates but does not provide a specific percentage.
Jaguar acquired the Project from AngloGold on September 30, 2004 and carried out
an exploration program as described in Section 10.
6-3
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7 GEOLOGICAL SETTING
REGIONAL GEOLOGY
The Turmalina Deposit is hosted by rocks of the Archean Rio das Velhas greenstone
belt in the Quadrilatero Ferrifero region, one of the major gold provinces in the world.
The Rio Das Velhas Supergroup is further subdivided into the Nova Lima and Maquiné
Groups. The Nova Lima Group, which hosts most of the gold deposits in the region, is
comprised of clastic sediments, pyroclastics, volcanic flows, chemical sediments, and
banded iron formations. There is no widely accepted stratigraphy for the Nova Lima
Group due to intense deformation, hydrothermal alteration, and weathering.
The Rio Das Velhas Supergroup unconformably overlies the tonalite, trondjemite
basement. The Proterozoic Minas Supergroup overlies the Rio Das Velhas Supergroup
and consists of clastic and chemical sediments, including rich hematite mineralization
and minor metavolcanics.
Gold mineralization in the Iron Quadrangle is most commonly associated with the
banded iron formations and cherts of the Nova Lima Group, and are located along
regional structural lineaments. The most important structures are NW and NE striking,
thrust-related, oblique ramps or EW striking transcurrent faults, the latter being the most
favored location for gold deposition.
The regional geology is illustrated in Figure 7-1 and a stratigraphic column is
provided in Figure 7-2.
7-1
N
650,000
SETE LAGOAS
Lagoa Santa
Pedro Leopoldo
TURMALINA
PROJECT
Pitangui
600,000
550,000
7,850,000
Ribeirão
das Neves
Santa Luzia
BELO HORIZONTE
Pará de Minas
7-2
7,800,000
Sabará
Caeté
CONTAGEM
Santa
Barbara
Raposos
BETIM
Nova Lima
Ibirité
Itauna
Rio Acima
Divinópolis
Brumadinho
Figure 7-1
Legend:
Itabirito
Cenozoic Cover
São Francisco Supergroup
Espinhaço Supergroup
Moeda
7,750,000
Turmalina Project
Minas Supergroup
0
Rio Das Velhas Supergroup
10
15
Kilometres
Granitoids
Basement Complexes
5
September 2005
20
25
Regional GeologyOuro Preto
Mariana
www.rpacan.com
Jaguar Mining Inc.
Mafic/Ultramafic Rocks
www.rpacan.com
Lithological Association
Orthoquartzite, protoquartzite,
conglomerate, grit, phyllite, and
phyllitic quartzite.
Maximum
Thickness
(m.)
Group
Formation
(Undivided)
Itacolomi
Series
Supergroup
Brasiliano orogeny
from 542 to 502 Ma (Cordani et al., 1980)
2,000 (?)
2,040 Ma
?
Sabará
Angular unconformity
2,124 ±4 Ma (207Pb-206Pb).
Machado et al. (1992).
Tbarreiro
Taboões
Orthoquartzite.
125
Phyllite, dolomitic phyllite, and
sillceous dolomite.
410
Ferrginous quartzite, quartzite,
phyllite, and ferruginous phyllite.
Conglomerate and dolomite are
less common.
600
Gandarela
Cauê
Oxide-facies BIF, dolomitic BIF,
minor phyllite and dolomite.
Batatal
Phyllite, slightly graphitic
phyllite, minor metachert and
oxide-facies BIF.
Orthoquartzite, conglomerate,
sericitic quartzite, phyllite, and
protoquartzite.
600
350 +
?
Intense isotopic remobilization event in the
2,125-2,040 Ma interval (Rb-Sr and U-Pb methods).
Cordani et al. (1980), Teixeira et al. (1987),
B.de Oliveira and Teixeira (1990), and
Machado and Noce (1993).
Cata Preta, Bico de Pedra, Morro do Bule
2,4204 ±19 Ma (Pb-Pb - whole rock).
Babinski et al. (1991, 1995).
Antônio Pereira
Jacutinga-type gold mineralization/deposits
(e.g. - Itabira, Gongo Soco, Pitangui, Taquaril, Del Rey).
Passagem de Mariana, Morro Santana, Veloso.
1,150
Casa Forte
Palmital
Angular unconformity
400 +
Phyllite, quartzite phyllite,
protoquartzite and graywacke.
1,400
Basal Unit * Middle Unit * Upper Unit *
?
250
Protoquartzite, conglomerate,
minor phyllite and
subgraywacke.
GraniticGneissic
Complex
?
2,125 Ma
150
Local unconformity
Dolomite and minor limestone,
dolomitic BIF, BIF, and dolomitic
phyllite.
Moeda
Cercadinho F. Do Funll
Piracicaba
Minas
Itabira
Caraça
Maquiné
Nova Lima
Rio das Velhas
Phyllite and graphitic phyllite.
?
Transamazonian
orogeny
Chlorite schist, phyllite, metatuff,
3,000 (?)
graywacke, till old, quartzite,
conglomerate, and minor BIF.
Local unconformity
?
Cata Branca
Paleoconglomerate-hosted
gold deposits (e.g. - Gandarela,
Ouro Fino, Terra Branca)
2,650 Ma (207Pb-206Pb).
Machado et al. (1993)
Rio das Velhas
orogeny
2,780-2,703 Ma interval (U-Pb method).
Machado and Carneiro (1992).
Local unconformity
Pelitic rocks, graywacke, acidic
volcaniclastic rocks, tuffaceous
rocks, epiclastic rocks, Minor
conglomerate.
Mainly basic and intermediate
volcanic rocks. Acidic volcanic
rocks, pelite, graywacke, and BIF
layers are common.
Mainly basic and ultrabasic
volcanic rocks. Acidic volcanic
rocks, pelite, graywacke, and BIF
layers are less common.
Tectonized contacts (thrusts)
Migmatized tonalitic-trondhjemitic
to granodioritic gneisses.
4,000 +
2,776 +23/-10 Ma (U-Pb - zircon).
Machado et al. (1993).
Shear zone-related lode-gold deposits
BIF-hosted gold deposits
(e.g. Tourmalina, Juca Vieira, Paciência,
(e.g. - Morro Velho, Cuiabá,
Säo Bento, Raposos, Lamego). Cõrrego do Sîtio, Engenho D’água, Descoberto).
Intrusion-related (?) Lode gold deposits
(e.g., Descoberto Piedade, Catita,
Cubas, Pacheca).
Figure 7-2
Jaguar Mining Inc.
Turmalina Project
Stratigraphic Column
Iron Quadrangle
September 2005
7-3
www.rpacan.com
LOCAL GEOLOGY
The Pitangui area is underlain by rocks of Archaean and Proterozoic age. Archaean
units include a granitic basement, overlain by the Pitangui Group, a sequence of
ultramafic to intermediate volcanic flows and pyroclastics, and associated sediments.
The Turmalina Deposit is hosted by a pelitic unit within the Pitangui Group. A sequence
of sheared, banded, sulphide iron formation and chert, lies stratigraphically below the
deposit.
Proterozioc units include the Minas Supergroup and the Bambui Group. The former
includes basal quartzites and conglomerates as well as phyllites.
Some phyllites,
stratigraphically higher in the sequence, are hematitic. The Bambui is composed of
calcareous sediments.
The stratigraphy locally strikes azimuth 135º.
The local geology is illustrated in Figure 7-3.
7-4
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7,821,000
510,000
0
511,000
250
500
750
512,000
513,000
514,000
N
1000
7,821,000
7,820,000
7,820,000
Metres
Source: Jaguar Mining Inc., 2005
September 2005
Pontal II
7,819,000
7,819,000
Pontal
Faina I
7,818,000
7,818,000
Faina II
Faina III
7,817,000
Turmalina
Satinoco Sudeste
7,816,000
Figure 7-3
Conceição do Pará
Jaguar Mining Inc.
Legend:
Quartenary
City
Sedimentary Sequence
Intermediate Volcanic Sequence
River
Metasedimentary Sequence
Basal Volcanic Sequence
Drainage
Road
7-5
Turmalina Project
Local Geology
7,817,000
Satinoco
www.rpacan.com
PROPERTY GEOLOGY
The predominant rock types in the deposit are metamorphosed pelites and tuffs. Gold
mineralization is associated with higher levels of sericite, quartz, and biotite.
Fine
banding is likely associated with shearing.
The deposit lies approximately 200 m stratigraphically above a banded iron
formation. Both the banded iron formation and the deposit are located within a shear
zone approximately 500 m wide that strikes approximately azimuth 135º.
A typical diamond drill cross section through the Principal Zone is illustrated in
Figure 7-4.
7-6
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F-02
Elevation
(m)
F-10 / F-13
F-09
F-14
OLD
OPEN PIT
F-17
PLANNED
OPEN PIT
690
OPEN PIT
670
Crown Pillar (15 m)
UNDERGROUND
640
LEVEL
626
LEVEL
2.72m @ 5.44g/t
5.42m @ 5.54g/t
500
10.30m @ 4.34g/t
9.59m @ 9.31g/t
400
14.10m @ 5.91g/t
300
215
5.69m @ 3.24g/t
includes
2.70m @ 5.12g/t
Figure 7-4
Jaguar Mining Inc.
Turmalina Mine
Legend:
Mineralized Zone
Diamond Drill Cross Section
Pelites & Tuffs
(Looking West)
September 2005
Source: Jaguar Mining Inc., 2005.
7-7
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8 DEPOSIT TYPES
Some fraction of the gold mineralization in the Turmalina Deposit may be due to
primary, exhalative deposition associated with the banded iron formation, however, the
deposit can be broadly classified as epigenetic related to a mesothermal system that
localized auriferous silicification in local structural features within a wider shear zone.
The structure and mineralization style of the Turmalina Deposit is similar to the Juca
Vieira, Santana, Corrego do Sitio, and Bela Fama Deposits, also located in the Iron
Quadrangle in Minas Gerais, Brazil.
8-1
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9 MINERALIZATION
The Turmalina Deposit comprises two zones: the Principal and NE Zones. The
Principal Zone strikes azimuth 110º, dips 55-60º N. Gold grade zoning indicates a SE
plunge of approximately 65º. The zone is 200-250 m long and ranges in horizontal width
from two metres to 30 m, averaging approximately eight metres. The NE Zone lies 50 m
to 100 m east of the Principal Zone and has a similar attitude. It is approximately 200 m
long and ranges from one to 12 m in horizontal width, averaging approximately three
metres. Mineralization extends to at least 350 m below surface. Mineralization is
structurally controlled and is confined within steep boudin-like features within the plane
of the shear zone.
Gold mineralization in the Iron Quadrangle is normally classified as one of three
types:
1. Oxide/Carbonate facies banded iron formation hosting massive or
disseminated sulphides.
2. Lapa Seca, a carbonate banded iron formation hosting massive or
disseminated sulphides with visible gold.
3. Silicified zones within shear zones hosting massive or disseminated sulphides
with visible gold.
The Turmalina mineralization is Type 3. Gold mineralization is proportional to the
degree of silicification. Elevated levels of biotite and sericite are also good indicator
minerals. Gold occurs as free gold and is associated with arsenopyrite, pyrrhotite, and
pyrite, and is non-refractory. Total sulphide content is normally less than five percent.
9-1
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10 EXPLORATION
Jaguar purchased the Property from AngloGold in September, 2004 and since that
time has conducted a surface exploration program consisting of 23 diamond drill holes
for a total of 5,789 m. The drilling was contracted to Mata Nativa, an independent drill
contractor from Nova Lima, Minas Gerais, Brazil. Holes were started with HQ (63.5
mm) diameter core, and reduced to NQ (47.6 mm) further down the hole, normally at the
oxide-sulphide transition.
The holes were logged manually, recording lithology, alteration, mineralogy, and
structure. Samples from mineralized zones were collected as described in Section 12.
The data was transferred to a database in digital spreadsheet format.
Concurrent with the drill program, Jaguar opened the portal of the ramp, previously
sealed by AngloGold, and rehabilitated and mapped the two underground levels.
Figure 10-1 is a longitudinal section showing the open pit, underground development,
and diamond drill pierce points.
10-1
700.0
600.0
500.0
400.0
300.0
100.0
0.0
-100.0
-200.0
200.0
700.0 Elev
Open Pit
640 Level
626 Level
600.0 Elev
600.0 Elev
500.0 Elev
400.0 Elev
400.0 Elev
NE Zone
Principal Zone
200.0 Elev
Figure 10-1
700.0
600.0
300.0 Elev
500.0
300.0 Elev
200.0 Elev
50
100
150
200
Turmalina Project
Metres
400.0
300.0
200.0
100.0
0.0
September 2005
-100.0
Underground Exploration &
Diamond Drilling
www.rpacan.com
Jaguar Mining Inc.
0
-200.0
10-2
500.0 Elev
700.0 Elev
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11 DRILLING
The drilling was contracted to Mata Nativa Comercio e Servicos Ltda., an
independent drill contractor from Nova Lima, Minas Gerais, Brazil.
Coring, using
Longyear drills, started with HQ (63.5 mm) diameter core, and was reduced to NQ (47.6
mm) at the oxide-sulphide transition zone. Drill hole collars were surveyed. Down-hole
surveys were made by Tropari or Sperry Sun instruments. Twenty-three holes were
drilled, ranging in length from 138 m to 378 m at dips from -50º to -88º.
The
mineralization dips at approximately 60º. Consequently the holes intersected the plane of
the mineralization at angles ranging from 70º to 30º, and the reported core length of
mineralization was 10% to 100% greater than the true width of the mineralization.
Core recovery was high at greater than 90%. Most problems with core recovery
occurred at or above the oxide-sulphide transition. Core recovery in the mineralized zone
was virtually 100%. Rock Quality Designation (RQD) measurements were not taken.
The sample quality is good and there do not appear to be any factors that would bias the
results.
Table 11-1 summarizes the highlights of the Jaguar diamond drill program.
11-1
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TABLE 11-1 JAGUAR DIAMOND DRILL HIGHLIGHTS
JAGUAR MINING INC.
HOLE
NO.
FMT-23
FMT-24
FMT-25
FMT-26
FMT-27
FMT-28
FMT-29
FMT-30
FMT-31
FMT-32
FMT-33
FMT-34
FMT-35
FMT-36
FMT-37
FMT-38
FMT-39
FMT-40
FMT-41
FMT-42
FMT-43
FMT-44
FMT-45
FROM
TO
CORE
LT.
(m)
(m)
(m)
221.10 240.40
134.45 138.65
147.65 161.25
166.35 190.65
No significant
values
No significant
values
113.10 115.40
121.00 122.70
199.90 201.80
167.35 167.75
171.95 172.35
No significant
values
1.80
7.30
29.30
30.45
No significant
values
74.85
84.00
221.95 228.35
231.85 233.80
144.60 151.10
240.60 242.50
288.95 303.25
285.70 290.00
93.10
94.30
99.30
100.50
127.70 128.40
250.40 250.90
253.60 253.90
198.20 202.30
293.35 295.10
107.20 109.80
162.30 166.90
No significant
values
314.20 328.80
186.30 190.10
19.30
4.20
13.60
24.30
DIP
Degree
s
-85
-60
~TRUE
W.
GRADE
UNCUT
GRADE CUT TO 30
g/t
(m)
(g/t)
(g/t)
12.5
4.0
12.5
19.0
15.25
3.04
6.82
21.31
15.17
1.6
1.3
1.5
0.3
0.3
6.77
1.65
2.74
22.10
8.20
5.0
1.3
9.79
5.50
8.0
5.5
1.5
6.0
1.8
14.0
4.0
1.1
1.1
0.6
0.4
0.2
3.5
1.6
2.4
4.3
6.61
4.12
19.95
1.15
1.82
17.32
10.36
5.10
2.48
14.30
25.30
16.30
3.29
8.22
11.44
7.37
13.0
3.0
15.62
7.21
-85
6.00
18.49
-65
-70
2.30
1.70
1.90
0.40
0.40
-72
-85
-85
5.50
1.15
-55
-88
9.15
6.40
1.95
6.50
1.90
14.30
4.30
1.20
1.20
0.70
0.50
0.30
4.10
1.75
2.60
4.60
-55
-70
-85
-85
-83
-55
-85
-85
-55
11.90
15.43
-55
14.60
3.80
-85
-85
11-2
13.00
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12 SAMPLING METHOD AND APPROACH
Field logging was done at the Turmalina site, by William Fagundes Campos, the
Senior Geologist. The core was transported to a facility near Jaguar’s Caété heap leach
operation, east of Belo Horizonte, for more detailed logging, sampling, and storage.
Diamond drill core was logged based on lithology, alteration, and mineralization.
Core sampling intervals were determined by the Senior Geologist according to
lithology, mineralization type, and visually anticipated grade. Thus, 1,808 intervals were
selected for sampling. The nominal maximum sample interval was 1.0 m, however, a
few samples in barren or poorly mineralized sections were 1.2 m. Barren core on the
margins of mineralized zones was also sampled.
Although mineralized zones are
occasionally greater than 15 m wide, the grade variance within the zone can be very high.
Therefore the minimum sample interval was 0.20 m to ensure sufficient detail was
assembled for realistic grade correlation.
Core selected for sampling was halved with a diamond saw and one half placed in a
plastic sample bag. Sample tags were hand written in duplicate, with one tag inserted
into the sample bag while the other tag remained in the core box.
The samples were transported to SGS Analytical Laboratories (SGS), in Belo
Horizonte, using a local courier.
Collar and down-hole survey data, major lithologies, and assay results were entered
into a database using a digital spreadsheet format.
12-1
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13 SAMPLE PREPARATION, ANALYSES AND
SECURITY
Samples were prepared at the SGS lab by drying, crushing to 90% minus 2 mm,
quartering with a Jones splitter to produce a 250 g sample, and pulverizing to 95% minus
150 mesh. Analysis for gold was by standard fire assay procedures, using a 50 g sample
with an atomic absorption (AA) finish. Analytical results were forwarded to Jaguar by
email, followed by a hard copy. SGS subsequently purchased the Lakefield Geosol
laboratory (LKG) in Belo Horizonte, and Jaguar currently employs LKG for their assay
requirements.
The LKG lab uses identical sample preparation and analyses
methodologies as the SGS facility. The LKG lab has been assessed by ABS Quality
Evaluations, Houston, Texas, and found to be in compliance with ISO 9001.
Jaguar’s Quality Assurance/Quality Control (QAQC) program consisted of:
•
Submission of control blanks, standard reference samples, and duplicate
samples to SGS
•
Re-submission of selected rejects and pulps to SGS for re-assay
•
Checking SGS results at an outside accredited assay lab
Further discussion regarding the Jaguar QAQC procedures and results follows.
13-1
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CONTROL BLANKS
Twenty-four, or 1.33% of the Jaguar drill core samples submitted to the lab were
control blanks, composed of crushed, barren quartzite. Control blanks are employed to
check for contamination, drift, or tampering. The detection limit for fire assay analyses
was 0.02 g/t gold. Industry practice recommends that the maximum limit of the control
blanks should not exceed three times the detection limit, i.e. 0.06 g/t gold. The Jaguar
control blank sample assay results included only one sample that exceeded the 0.06 g/t
limit, which demonstrates acceptable management of contamination and drift. See Figure
13-1.
FIGURE 13-1 QA/QC-BLANK SAMPLES
Sample No.
13-2
23
21
19
17
15
13
11
9
7
5
3
0.10
0.09
0.08
0.07
0.06
0.05
0.04
0.03
0.02
0.01
0.00
1
Grade (Au g/t)
CONTROL BLANK SAMPLES
3xDL=0.06 g/t Au
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STANDARD REFERENCE SAMPLES
Jaguar submitted 18 standard reference samples, equivalent to approximately one per
cent of the diamond drill core sample population, to test the accuracy of the SGS lab.
Standard reference samples graded 2.643 g/t, 3.489 g/t, and 8.367 g/t Au, and were
purchased from Rocklabs Ltd., Auckland, NZ. Figure 13-2 illustrates the comparison
between the SGS lab assay results and the standard reference sample grades. The results
are displayed chronologically. The first half of the SGS assays submitted fall within +/10% of the standard reference sample grades, however, the SGS assays for the second
half of the drill campaign are 10-20% less than the reference sample grades. RPA
recommends that Jaguar monitor the results of the standard control sample program on an
ongoing basis and react to possible issues proactively.
FIGURE 13-2 STANDARD REFERENCE SAMPLES
Standard Reference Samples
120
100
Standard
% Comp.
90
80
70
Sample No.
13-3
17
15
13
11
9
7
5
3
60
1
SGS/Standard (%)
110
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DUPLICATE SAMPLES
Jaguar submitted 18 samples of quartered core to SGS as duplicates to test for grade
variability. The results are illustrated in Figure 13-3. The average gold grades for the
two sets of data are similar at 9.21 g/t and 9.60 g/t. The standard deviations are also close
at 13.39 and 13.69. Although 18 samples are not statistically meaningful, the results
appear to suggest high individual variability.
FIGURE 13-3 DUPLICATE SAMPLES
Duplicate Samples
50
SGS Duplicate (g/t Au)
40
30
20
10
0
0
10
20
30
SGS Original (g/t Au)
13-4
40
50
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INTERLAB CHECK ASSAYS
Jaguar further checked the reliability of the SGS lab by sending 63 rejects and 75
pulps, including blanks and standards, to the Lakefield Geosol (LKG) laboratory. SGS
has subsequently purchased the LKG lab, however, they were separate entities when the
check sample program was undertaken. Figure 13-4 is a scatter plot comparing the assay
results from the two labs.
FIGURE 13-4 INTERLAB COMPARISON SCATTER PLOT – REJECTS
INTERLAB COMPARISON
REJECTS
Lakefield Geosol (Au g/t)
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
SGS (Au g/t)
RPA prepared a Relative Difference Plot (RPD) that compares the mean of the
sample pairs against the difference of the sample pairs.
Figure 13-5 displays the
difference as a percentage of the mean. It is apparent that in most cases the difference in
sample pairs is less than 25% of the mean grade of the sample pairs. In RPA’s opinion
the results indicate good precision and low bias.
13-5
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FIGURE 13-5 INTERLAB COMPARISON RDP – REJECTS (%)
Difference of Duplicate Pairs (%)
SGS-LGK
RELATIVE DIFFERENCE PLOT (%)
REJECTS
250
200
150
100
50
0
-50
-100
-150
-200
-250
0.0
10.0
20.0
30.0
40.0
50.0
60.0
70.0
Mean Grade (Au g/t)
Jaguar also submitted 64 pulps, previously assayed at SGS, to LKG for re-assay.
Figure 13-6 is a scatter plot of the two sets of data.
FIGURE 13-6 INTERLAB COMPARISON SCATTER PLOT - PULPS
INTERLAB COMPARISON
Pulps
Lakefield Geosol (Au g/t)
90.0
80.0
70.0
60.0
50.0
40.0
30.0
20.0
10.0
0.0
0.0
20.0
40.0
60.0
SGS (Au g/t)
13-6
80.0
100.0
www.rpacan.com
The scatter plot seems to demonstrate a higher grade bias in favor of the LKG lab in
the grades greater than approximately 12 g/t Au. In fact, the uncapped average of the
LKG assays is 22% greater than the SGS average. The average of LKG assays, capped at
30 g/t gold is 10% greater than the SGS assays with the same cap. RPA prepared a
Relative Difference Plot (RPD) that compares the mean of the sample pairs against the
difference of the sample pairs. Figure 13-7 displays the difference as a percentage of the
mean.
FIGURE 13-7 INTERLAB COMPARISON RDP – PULPS (%)
Difference of Duplicate Pairs (%)
SGS-LGK
RELATIVE DIFFERENCE PLOT (%)
Pulps
200
150
100
50
0
-50
-100
-150
0
20
40
60
80
Mean (Au g/t)
The plots indicate a sample bias due to lack of precision in one of the labs. The lack
of precision may explain the inability to establish a variography, as discussed in Section
17. RPA recommends additional quality control testing.
13-7
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14 DATA VERIFICATION
Verification of the AngloGold drilling data was not possible as most of the core was
destroyed prior to Jaguar purchasing the Property. None of the AngloGold holes were
twinned by Jaguar.
Rogério Moreno, author of the mineral resource document, reported that one of the
steps to ensure a clean database was to enter the data twice and compare the resultant data
sets.
RPA collected four samples of split diamond drill core from the Turmalina deposit.
The samples were sent to SGS Canada Ltd. for gold analyses. Sample preparation
included crushing to 90-95% minus 2 mm, separation with a Jones riffle to 200 g, and
pulverizing to 90-95% minus 200 mesh. Analyses were carried out using fire assay with
an atomic absorption finish on a 30 g charge. Samples assaying greater than 10 g/t gold
e.g. FMT26, were re-assayed using fire assay with a gravimetric finish. The results are
summarized in Table 14-1.
TABLE 14-1 DIAMOND DRILL CHECK
SAMPLES
Jaguar Mining Inc.
Hole No.
FMT34
FMT26
FMT37
FZA17
From
(m)
81.00
184.05
296.60
19.50
Turmalina Project
To
(m)
82.00
185.05
297.60
20.05
Jaguar
(g/t)
10.00
16.40
1.57
1.49
RPA
(g/t)
5.78
26.90
1.50
1.02
The sample population is not sufficient to be statistically meaningful but the
comparison indicates good agreement in the low grade range and reasonable agreement in
the higher grades.
14-1
15 ADJACENT PROPERTIES
There are no Adjacent Properties as defined by NI43-101.
15-1
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16 MINERAL PROCESSING AND
METALLURGICAL TESTING
Gold occurs as free gold and is associated with arsenopyrite, pyrrhotite, and pyrite.
Total sulphide content is normally less than five percent.
AngloGold conducted preliminary gold recovery testwork in 1987 and 1992 and
bench scale testwork in 1993-94. Jaguar resumed testwork in 2005, and commissioned
additional studies regarding gold recovery, operating parameters and conditions, and
equipment optimization. A description of the studies is summarized in Table 16-1.
The projected processing rate is 1,000 tpd or 360,000 tpa. The planned metallurgical
recovery is 90%, based on 92% leaching recovery and 97.8% adsorption/smelting
recovery. The process flowsheet includes three-stage crushing/screening to minus 3/8”,
primary grinding using a rod mill, secondary grinding using a ball mill, thickening, CIP
leaching, carbon adsorption, elution, electrowinning, and smelting. The tailings will be
conveyed and pumped to the waste fill plant to be used for mine backfill or deposited in
the completed open pit. Figure 16-1 illustrates the proposed flowsheet.
Run of mine material will be stored in a surge pile and fed to the primary jaw crusher
using a front end loader at a nominal rate of 100 tph. Oversized material will be managed
with a grizzly and rock breaker. The primary crusher product is fed to secondary and
tertiary cone crushers. The final product, minus 3/8”, will be stored in a grinding plant
surge bin.
Material will be fed from the surge bin to the primary (10 ft x 15 ft) rod mill
operating at 20 RPM, driven by a 1,000 HP motor. The feed to the primary mill be
sampled with an automatic sampler.
The primary mill product will be sized with
cyclones to one millimetre. The overflow will be fed to the secondary grinding unit,
while the undersize will be recycled to the primary mill. The secondary (12.5 ft x 18 ft)
ball mill will operate at approximately 19 RPM, driven by a 1,800 HP motor. Secondary
cyclones will size the product at 200 mesh, with the overflow passing on to the thickener
16-1
and the underflow recycling to the secondary mill.
www.rpacan.com
The grinding circuit will be
automated. A particle size analyzer (PSA) will be positioned in the secondary cyclones
overflow stream to supply on-line data to the grinding and classification plant control
system. All mills will have automatic water addition systems. The secondary mill will
have an automatic ball addition system. The overall grind P80 is 200 mesh.
Secondary cyclone overflow will be fed to an 80 ft, central column type thickener
where flocculants will be added to optimize the settling cycle of the pulp. The thickener
underflow will be pumped to the CIP plant at a density of approximately 50%, by weight,
solids. The flow rate will likely be monitored and controlled by a magnetic flow meter
and pulp densitometer. The thickener overflow will be directed to the process water tank
as make-up water.
The leaching circuit will consist of four agitation tanks. Lime will be added to the
first tank to adjust the pH. Cyanidation will begin in the second tank with the addition of
sodium cyanide (NaCN).
Lead nitrate is also added to the second tank to control
excessive NaCN consumption. Compressed air is injected in all the tanks, as the process
consumes large amounts of oxygen. The residence time in the leaching circuit will be
approximately 30 hrs.
The adsorption circuit will be a conventional carbon in pulp (CIP) circuit. The goldbearing pulp will pass through a series of tanks. Activated carbon is added to the last in
the series of tanks, and is pumped in the opposite direction from the sludge. Thus, the
carbon will adsorb the gold from the pulp as the process continues. When the adsorption
cycle is completed, the loaded carbon, approximately 2.7 kg of gold per tonne of carbon,
is pumped from the bottom of the first tank to the elution and electrowinning circuit.
The loaded carbon will be screened and the minus 28 mesh material will be redirected
back to the adsorption circuit. The oversize will feed the elution circuit, comprised of
four columns, two of which will be leaching while the other two are loading. Loaded
carbon will be stripped using caustic soda, injected into the elocution columns from
bottom to top. The pregnant solution will be stored in a tank, from which the overflow
will feed the electrowinning system. The electrowinning system will consist of six
16-2
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cathodes and seven anodes, energized with a 360 amp current and a voltage of 3.5/4.0
volts. The loaded cathodes are treated with an acid digestion, and the residue is filtered,
dried, mixed with a flux, and melted in an induction furnace. The bullion produced will
be a minimum of 80% gold.
16-3
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TABLE 16-1 METALLURGICAL TESTWORK
Jaguar Mining Inc.
Year
1987
Owner
Laboratory
AngloGold Morro Velho Mine
Turmalina Project
Testwork
Results
Gravity-Floatation-Cyanidation testing on
Gravity recovery=10.4%
65 kg sample grading 6.23 g/t Au
Floatation-Cyanidation recovery=90%x90%=81%
Total cyanidation recovery=91.4%
1992
AngloGold
1993-94 AngloGold
Bottle roll
90.3% recovery @ 90% minus 200 mesh
35 t bench scale cyanidation
86% recovery @ 90% minus 200 mesh
93% recovery @ 90% minus 400 mesh
2005
Jaguar
METSO
Optimize crushing/screening by testing 6 t sample
Crush to 100 minus 3/8"
Test crushability & rod mill indices
Measure particle & bulk densities
Test abrasiveness
Measure flatness index
2005
Jaguar
CETEC
Bottle roll on 90% minus 100, 200, & 325 mesh
2005
Jaguar
Dawson Laboratories Inc.
Bond ball mill work index tests @ 100, 200, & 400 mesh
Adsorption kinetic tests to study CIP vs CIL
2005
Jaguar
CDTN Research Centre
Cyanidation in agitated tanks on 90% minus 200 & 325 mesh 92% recovery @ 90% minus 200 mesh
94.5% recovery @ 90% minus 325 mesh
2005
Jaguar
Federal Univ. of Minas Gerais Viscosity, settling, and flocculant tests for thickener design
2005
Jaguar
Lakefield/Geosol
Tailings characterization to study acid generation potential
16-4
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Rock Breaker
Ore
Stockpile
Figure 16-1
Grizzly
Jaguar Mining Inc.
Jaw Crusher
Turmalina Project
Secondary
Cone Crusher
Simplified Process Flowsheet
Tertiary
Cone Crusher
Rod Mill
Ball Mill
Thickener
Leaching
ADR Plant
Tailings Pump
Paste Fill Plant
Underground
Regeneration
Dore
Open Pit
September 2005
16-5
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17 MINERAL RESOURCE AND MINERAL
RESERVE ESTIMATES
The database for the resource estimate included:
1. 435 channel samples from the pit floor, elevation 690 m
2. 922 channel samples from drift faces or walls of the 640 m elevation
underground exploration level
3. 720 channel samples from drift faces or walls of the 626 m elevation
underground development level
4. 208 samples from 29 underground drill holes drilled from the 640 m and 624
m levels
5. 2,548 core samples from 22 surface diamond drill holes drilled by Anglo
6. 1,808 core samples from 23 surface diamond drill holes drilled by Jaguar
In the Principal Zone, the diamond drill spacing from the 626 m to the 400 m
elevation ranges from 50 m to 70 m vertically, and 25 m to 100 m along strike. There are
only three holes below the 400 m elevation. In the NE Zone, the drill spacing is
approximately 50 m vertically by 50 m along strike in the central part of the zone, but is
less dense at the margins of the mineralization.
Channel samples were taken at approximately three metre intervals along the strike of
the mineralization. Samples across the face were taken consistent with lithology and
mineralization to a maximum of one metre.
The geological model was created by Jaguar staff. Drill hole traces with assays and
lithology were plotted on vertical cross sections.
Geological correlation was done
manually, and incorporated a 1.0 g/t gold cutoff grade and a 2.0 m minimum width. The
cutoff grade is appropriate as grade transition at the mineralized margin is very sharp. In
most cases the grades change from nil gold in barren rock to multi-gram values at the
margins of the mineralized zone. The minimum width was chosen to reflect the proposed
longhole, sublevel retreat mining method. The correlation was checked on plans at
various elevations to ensure continuity. Discrete, three-dimensional, wireframe models
17-1
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were developed for the Principal and NE Zones. The wireframe geology models were
used to constrain the limits of the subsequent block models.
The block model and resource evaluation was completed by Moreno & Associates.
Assays greater than 30 g/t gold, in both the channel sample and diamond drill databases,
were capped at 30 g/t. The capping level is appropriate, as illustrated by the gold
distribution in Figures 17-1 and 17-2.
FIGURE 17-1 GRADE DISTRIBUTION – CHANNEL SAMPLES
CHANNEL SAMPLE GRADE DISTRIBUTION
700
600
Frequency
500
400
300
200
100
0
5 10 15 20 25 30 35 40 45 50 55 60 65 70 75 80 85
Au Grade (g/t)
17-2
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FIGURE 17-2 GRADE DISTRIBUTION – DIAMOND DRILL SAMPLES
DIAMOND DRILL GRADE DISTRIBUTION
400
350
Frequency
300
250
200
150
100
50
0
5
10
15
20
25
30
35
40
45
50
55
60
65
Au Grade (g/t)
Grades were composited over a length of one metre. Separate data sets were created
for each of the Principal and NE Zones.
Variography could not be established, however, the strong down-plunge grade
continuity, evident on longitudinal section, justified creating a block model using the
inverse distance method for grade estimation. Blocks were created 5.0 m along strike,
2.5 m vertically, and 2.0 m normal to the strike. The first pass search incorporated a
search ellipsoid of 75 m down-plunge, 25 m along strike, and 15 m normal to the
principal and secondary directions. Blocks for which the grade was not estimated by the
first pass search, were filled by doubling the search distance in each dimension.
Tonnage estimates incorporate a bulk density of 2.75 t/m3, based on testwork by
Metso Minerals.
Resources were classified based on data density. Consequently, the Principal Zone
measured resources extend down to the 600 m elevation, approximately 25 m below the
lowest underground level. Indicated resources include mineralization from the 600 m to
17-3
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the 400 m elevation. Inferred resources in the Principal Zone comprise mineralization
below the 400 m elevation. In the NE Zone there are no measured resources, while
indicated resources extend down to the 465 m elevation. Inferred resources in the NE
Zone include mineralization below the 465 m elevation.
Table 17-1 summarizes the mineral resource estimates, above a 1.0 g/t cutoff grade.
Figure 17-3 is a longitudinal section illustrating the mineral resource outlines as related to
the open pit and underground development.
TABLE 17-1 TURMALINA MINERAL RESOURCES
Jaguar Mining Inc.
Principal
Turmalina Project
NE
(t)
(g/t)
(oz)
Measured
390,000
5.16
65,000
Indicated
1,125,000
7.64
276,000 303,000
5.95
Meas + Indic
1,515,000
7.00
341,000 303,000
584,000
8.15
153,000 248,000
Inferred
(t)
17-4
(g/t)
(oz)
Tonnes
Total
Grade Cont Au
(t)
(g/t)
(oz)
390,000
5.18
65,000
58,000
1,428,000
7.27
334,000
5.95
58,000
1,818,000
6.83
399,000
6.12
49,000
832,000
7.55
202,000
700.0
600.0
500.0
400.0
300.0
100.0
0.0
-100.0
-200.0
200.0
700.0 Elev
Open Pit
Sill Pillar
640 Level
626 Level
600.0 Elev
600.0 Elev
500.0 Elev
400.0 Elev
400.0 Elev
NE Zone
Principal Zone
200.0 Elev
Figure 17-3
0
50
100
150
200
Turmalina Project
Metres
Measured Resources
400.0
300.0
200.0
September 2005
100.0
Mineral Resources
Longitudinal Section
0.0
Inferred Resources
-100.0
Indicated Resources
200.0 Elev
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Jaguar Mining Inc.
Legend:
700.0
600.0
300.0 Elev
500.0
300.0 Elev
-200.0
17-5
500.0 Elev
700.0 Elev
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MINERAL RESERVES
Mineral reserves have been estimated for Turmalina based on the mineral resources
shown in Table 17-3. Mining factors have been applied as described in the following
Section 18. The break even cutoff grade based on operating costs of $26.40 per tonne
and a gold price of $375 is approximately 2.4 g/t Au.
The incremental cutoff is
approximately 1.4 g/t Au. Due to the lack of selectivity in the mining method, all
resources within the 1.0 g/t Au envelope were considered for reserves.
TABLE 17-2 TURMALINA MINERAL RESERVES
Jaguar Mining Inc.
Principal
Tonnes
Grade Cont Au
Turmalina Project
Tonnes
NE
Grade
Cont Au
(t)
(g/t)
(oz)
Tonnes
Total
Grade
Cont Au
(t)
(g/t)
(oz)
411,000
6.2
82,000
(t)
(g/t)
(oz)
411,000
6.2
82,000
Probable
1,184,000
6.2
236,000
310,000
5.3
52,000
1,494,000
6.0
288,000
Total
Notes:
6.
7.
8.
9.
10.
1,595,000
6.2
318,000
310,000
5.3
52,000
1,905,000
6.0
370,000
Proven
Based on a gold price of $375 per ounce
Cut off grade = 1.0 g/t
Dilution overall = 15%
Extraction = 91%
Reserves estimated according to CIM definitions
17-6
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18 OTHER RELEVANT DATA AND
INFORMATION
The Turmalina Project is presently the subject of a feasibility study (the Study) being
prepared for Jaguar by TechnoMine Services LLC of Salt Lake City, Utah. For the
purposes of this report, RPA reviewed the September 6, 2005 Version 12C draft of the
Study. In RPA’s opinion, the Study is complete in all material aspects. RPA also
reviewed the backup information to the Study and had full access to all reports and data.
TechnoMine has prepared the Study using its own professional staff, both in Salt Lake
and Belo Horizonte, independent consultants as required, and Jaguar technical staff.
The key design aspects of the Study are as follows:
•
•
•
•
•
•
•
•
Mine life:
5.5 years
Pre- production period: 8 months
Total millfeed:
Open pit production:
20,000 tonnes per month ore for a total open pit
reserve of 88,000 tonnes at a grade of 4.2 g/t Au and a strip ratio of 1.43:1;
950 tpd ore and approximately 1,400 tpd waste.
MINING OPERATIONS
OPEN PIT MINING
The open pit reserve to be mined is a remnant of the original AngloGold pit that was
mined for oxide ore in 1992/93 (Figure 18-1). Oxide ore was mined from elevation 705
masl to elevation 690 masl, using five metre benches. The bench face angle was 60o.
The current pit will be mined to elevation 670 masl, a total of 20 m. Above 690 masl, the
pushback in waste will be carried out using five metre benches. Mining in ore below 690
masl will be done using 10 m benches and 80o, resulting in an overall final slope of 44o.
18-1
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The open pit design assumes approximately 40% of the stripping is weathered and altered
material that will not require blasting.
Open pit mining will be carried out by contractor due to the short life of the reserve.
Mining will be done five days per week, one shift per day. Primary mine equipment will
include:
•
•
•
•
One backhoe excavator with 2.5 cu.m bucket
Four x 25t trucks
One truck mounted drill capable of 63 mm holes, 20 m deep
Ancillary service equipment
Ore will be hauled to the plant, approximately 1.3 km and waste will be hauled to the
dumps, approximately 1.0 km.
UNDERGROUND MINING
The underground mine will supply the large majority of millfeed during the mine life.
Mining will be carried out in two zones – the Principal Zone, comprising 84% of the
underground reserve and the NE Zone, comprising 16%.
The Principal Zone was explored previously during the AngloGold open pit program.
A minus12% access ramp was developed from outside the open pit at 690 masl down to
626 masl. Two levels were excavated at 640 masl and at 626 masl. In total, 628 m of
ramp and accesses, 469 m of level development, and 45 m of ventilation raise were
developed. Test mining was carried out from the 640 level. Uphole fans were drilled
from the level and approximately 17,000 t of ore were extracted, grading 5.24 g/t Au.
Dilution was estimated to be 20%, however, RPA has not reviewed any documents that
show a reconciliation of this estimate to the original resource estimate.
18-2
Figure 18-1
Underground Adit
N
Jaguar Mining Inc.
MTL Property
Mine Offices
7,817,250 N
Turmalina Project
te
Be
lo
Ho
r iz
on
Site Plan
Underground Development
Rented Area
Open Pit & Paste Deposit
7,817,000 N
Paste Fill Plant
Waste Deposit
Haul Road
Rented Area
Crusher
Water Pipeline
Explosive Magazines
7,816,500 N
MTL Property
Plant
Turmalina Mining Property
Environmental Reserve
0
100
200
300
400
Metres
7,816,250 N
September 2005
513,750 E
513,500 E
513,250 E
513,000 E
512,750 E
512,500 E
7,816,000 N
Lake
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Lake
512,250 E
18-3
7,816,750 N
www.rpacan.com
The Study proposes to mine the Principal Zone by sublevel stoping with paste
backfill and the NE Zone by mechanized cut and fill.
The Principal Zone is a tabular body, dipping at approximately 55o to 75o. The Zone
is an average of 8.3 m wide over a strike length of approximately 200 m to 250 m. The
zone has been traced from surface at the bottom of the open pit at 690 masl to a depth of
approximately 225 masl. Present reserves extend to the 400 masl elevation. Inferred
resources extend to approximately 200 masl, offering good potential for extension of the
mine life. Ore grade mineralization occurs in two main plunging shoots within the zone.
The NE Zone is tabular as well, dipping the same as the Principal Zone, but is much
narrower, averaging approximately 2.7 m in width. The NE Zone reserves extend from
675 masl to a depth of approximately 465 masl and resources extend to approximately
200 masl. The Zone strike length is approximately 150 m to 200 m.
The Principal Zone will be mined using longitudinal sublevel stoping (Figure 18-2,
Figure 18-3). Access will be by 5 m x 5 m, minus 15% ramp from the existing ramp.
Sublevels will be at 20 m intervals with a five metre sill pillar left at every sixth sublevel,
or 120 m. A 15 m crown pillar will be left beneath the open pit. Stope access (4 m x 4
m) will be via a central drift, with mining on a retreat basis within the stope.
Sill pillars will be supported by cable bolts installed in holes drilled in the floor of the
sub level above them. Within the stopes cable bolts will be installed on a three metre
pattern, extending into the hangingwall. Holes will be drilled with lengths varying from
4 to 20 m, yielding an average hangingwall penetration of 4 m.
For the NE Zone, access will be on the 606 level from the Principal Zone ramp, and
then a dedicated ramp. Stopes will be approximately 60 m vertical, with five metre sill
pillars. Access to the stope will be by jump ramps from the main ramp.
A secondary egress will be established via a 1.8 m x 1.8 m shaft located near the
workings.
18-4
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Elevation
(m)
Principal Zone
710
tila
690
n
Ve
700
Existing
Open Pit
n
tio
Final Open Pit
670
(Crown Pillar)
655
640
626
606
Sill Pillar
Ram
p
Sub Level
Sub Level
586
Sub Level
566
Sub Level
546
Sub Level
526
Sub Level
506
Sill Pillar
Sub Level
486
Sub Level
466
Sub Level
446
Sub Level
426
Sub Level
406
Sill Pillar
386
366
Figure 18-2
346
Jaguar Mining Inc.
326
Turmalina Mine
Legend:
Mineralized Zone
Schematic Mine Cross Section
(Looking West)
September 2005
18-5
700.0 Elev
Open Pit
Ra mp
Crown Pillar
Crown Pillar
640 Level
626 Level
600.0 Elev
600.0 Elev
Sub Level
Ventilation Emergency
Escape Way
500.0 Elev
Sill Pillar
500.0 Elev
Sill Pillar
Sub Level
18-6
400.0 Elev
700.0 Elev
400.0 Elev
Principal Zone
NE Zone
300.0 Elev
300.0 Elev
200.0 Elev
Figure 18-3
200.0 Elev
Measured Resources
0
Sill Pilar
Indicated Resources
Sub Level
Inferred Resources
U/G Workings
50
100
Metres
150
200
Turmalina Project
Schematic Mine Long Section
(Looking North)
September 2005
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Jaguar Mining Inc.
Legend:
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DILUTION AND EXTRACTION
For the conversion of resources to reserves, dilution factors of 15% for the Principal
Zone and 14% for the NE Zone were assumed. The factors were based on previous
experience from the AngloGold test mining phase and from empirical assessment based
on a geomechanics study and experience from other mines in the area.
The AngloGold test mining program yielded an estimated dilution of approximately
20%. AngloGold determined that this was largely because the test area was in an altered
area and the cable bolting was poorly done. In addition, part of the footwall was undercut
by the pilot drift development.
Jaguar’s independent geotechnical studies show that fractures reduce with depth and
the consultant estimates that dilution will be in the range of 10% to 15%.
For the Principal Zone, dilution of 15% represents a total of 1.3 m of hangingwall,
footwall, and backfill over the average width of 8.3 m. In reality, backfill dilution will be
very low, if present at all, as the plan is to mine 50 m to 60 m high open stope panels
before filling. This is clearly dependent on the ability to maintain the open panels prior
to filling. For the NE Zone, the dilution factor of 14% allows for approximately 0.3 m of
hangingwall and footwall dilution and 0.1 m of backfill dilution.
In RPA’s opinion, the dilution factors are reasonable for the Base Case, however,
there remains some downside risk of possibly 20% overall that should be considered as a
sensitivity.
Overall extraction for the two zones is estimated to be 91%. This figure is based on
subtracting pillars from the resource estimate. There is no allowance for general ore
losses. In RPA’s opinion this is a reasonable assumption given that all the ore is being
extracted by remote scoops and the amount blasted at anyone time is relatively small,
however, there may be a minor risk of ore loss and this should be allowed for in a
sensitivity analysis.
18-7
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BACKFILL
The mining sequence for the Principal Zone calls for longitudinal retreat from the two
extremities back to a single access point. The stopes will be blasted in rings from
sublevels on 20 m lifts, with three lifts per stope. The backfill plan calls for extracting all
of the ore in one 60 m high by full strike length stope before filling. In this case, the
opening to be filled could be 60 m high x more than 8.3 m wide x more than 200 m long.
The plan is for paste fill to be used to fill the stope before mining commences on the level
above. The paste, containing 4% cement, will be piped from the paste fill plant on
surface through boreholes and be distributed in the mine by a piping network.
Jaguar is still in the process of carrying out testing for the paste fill and has retained
outside consultants to determine the ultimate fill properties and design criteria.
In RPA’s opinion, there is some risk related to the size of the openings to be filled
and consideration should be given to filling smaller openings on a more frequent basis.
This can be done with the present layout, however, it will introduce curing time to the
cycle and stoping productivity will be affected. This can be mitigated by having more
workplaces available. Another option is to leave sacrificial pillars in the stopes. RPA
recommends that these options be studied for incorporation into the mine schedule.
For the NE Zone, filling material will come from two sources - waste generated at the
open pit mine and waste generated by the underground development work. Surface waste
will be excavated by loader/truck and dumped in a fill pass. Underground waste will
trucked to the required area.
VENTILATION AND DEWATERING
The main ventilation system will be downcast through the access ramp to the bottom
of the mine and distributed along the sub-levels by auxiliary fans and ducting. Return air
will be exhausted by ventilation raises located in the Principal and NE Zones. Total
airflow into the mine is estimated to be 158 m3/s (330,000 cfm) provided by two x 300
HP fans in the Principal Zone and two x 150 HP fans in the NE Zone.
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The dewatering system will comprise pumping stations every 120 m vertical, with the
first being located at 606 level. Each station will have a decant box with two x 75 HP
centrifugal pumps. Smaller pumps will be used to dewater the workings to the main
pump stations. The total mine capability will be 100 m3/h (440 USgpm).
PRODUCTIVITY
It is planned that the underground mine production will be carried out on three x
seven hour shifts, every day. Development crews will work three x seven hour shifts, 25
days per month.
The annual underground mine development requirement peaks at 2,900 m in 2006
and decline thereafter. The peak average daily requirement, based on the 25 days per
month work schedule is 11.5 m/day in the first year of production, declining to
approximately 8.3 m/day in years two and three.
Principal Zone stoping productivity peaks at approximately 24,000 tonnes per month
in 2009/2010. Based on the average width of 8.3 m, this translates to a requirement of
approximately two longhole rings per day
Under the current scheduling, stope sequencing is not dependent on the backfill cycle,
as one entire stoping level will be filled at a time, while production will be carried out on
a separate level.
EQUIPMENT
Underground mining equipment requirements have been estimated from first
principles based on development and production requirements. Table 18-1 shows the key
mobile mining equipment.
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TABLE 18-1 UNDERGROUND
EQUIPMENT
Jaguar Mining Inc
Turmalina Project
Equipment
Quantity
Jumbos
2
Scooptrams (5 cu.yd)
2
Loader
2
25 t Trucks
3
12 t Trucks
3
Longhole Drill
1
Scissor Lift
2
Raise Borer
1
Grader
1
Pickups
4
PROCESSING
See Section 16.
TAILINGS
Tailings from the process plant will be pumped to a paste fill plant, where it will be
dewatered.
Cement will be added, if required, and the paste will be delivered
underground by gravity. During times when underground fill is not required, the paste
will be directed to the mined out open pit. Jaguar estimates show that there is enough
capacity in the pit and underground to handle the tailings from the current reserves. If
further reserves are defined (a likely scenario), a tailings pond will be required.
The paste fill system is presently in the design process and testing will be carried out
to determine the operating parameters.
RPA recommends that as part of the design process, the following items be
considered:
18-10
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•
Crown pillar stability to prevent inrush into the mine workings.
•
Proper sealing of the vent raise connection from the bottom of the open pit to
the mine.
•
The effect of water on the tailings during the rainy season and the prevention
of liquefaction.
INFRASTRUCTURE
POWER
Electric power will be supplied by CEMIG, a state-owned utility company with
operations in the state of Minas Gerais. The connection with the power system will
require a new 138 kV line based on an estimated demand of 5.5 MW. A smaller existing
line will provide power for construction and pre-production.
ROADS
The access to the Turmalina Mine will be upgraded to comply with legal regulations
and to accommodate the new traffic flow. A 1.2 km extension will be paved to connect
the mine to the public road.
WATER
There is abundant water supply approximately one kilometre from the Project site, in
the Pará River, which has an average flow rate of 820,000 m3/hr. The forecasted makeup
water demand for the Project is approximately 20 m3/hr from the paste fill system and
water pumped out of the mine. An existing stream located on the Project site, along with
artesian wells, can provide additional water supply.
COMPRESSED AIR
Compressed air facilities are planned for the mine and plant. The mine station will be
located at the mine entrance and will be designed to provide 1.7 m3/hour (1,000 cfm).
The plant station will be located at the plant site, close to the CIP - ADR unit and will 2
m3/hour (1,200 cfm).
BUILDINGS AND FACILITIES
Mine related ancillary buildings will be concentrated close to the mine entrance.
There will be specific buildings in this area for administration, maintenance shop,
18-11
cafeteria, warehouse, change room, first aid, and water treatment.
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The explosives
warehouse will be located in compliance with the regulations set forth by the Brazilian
Army, 1.2 km away from the mine area. The facilities that relate solely to the plant will
be located within the plant site. A plant office building, a plant laboratory, and a small
maintenance shop are envisioned.
COMMUNICATIONS
The communication system is based on digital technology that will be supplied by
Embratel. The system will accommodate a 30-channel link for voice communication and
a digital data connection.
SURFACE MOBILE EQUIPMENT
Surface mobile equipment will include a front end loader to operate around the
Primary Crusher Surge Pile, two pickup trucks for the General Management and two
smaller vehicles to be utilized for general services by the Administrative Management.
AGGREGATES
There are a number of local suppliers of sand and gravel for construction and road
building. In addition, waste removed during the underground mine development will be
crushed and stockpiled for consumption, as the crushing plant will be ready for operation
approximately four to five months before the process plant is commissioned.
MANPOWER
Manpower for the Project operating period totals 248 (Table 18-2). It is based on
productivity estimates for mining, and general convention for the other areas. The
proposed work schedules are as follows:
•
•
•
Mine: three x seven hour shifts per day, 360 days per year.
o Typical crew:
Shift boss – 2
Miner 4
HEO 12
Blasters 3
Helpers 3
Plant:
o Crusher: three x eight hours, 300 days per year
o Plant: three x eight hours, 365 days per year
Maintenance: schedule will follow mine and plant schedules, with some
regular day shift personnel.
18-12
•
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o Typical Mine crew on shift:
two mechanics, one electrician
o Typical Plant crew on shift:
one mechanic, one electrician
Administration: one shift x eight hours, five days per week
Salaries have been established to be competitive in the region. Monthly base salaries
range from US$250 for an entry level position to US$400 for a tradesman or experienced
miner.
A senior engineer salary is in the order of US$2,700 per month.
Senior
management salaries are approximately US$4,800 per month. Burden on top of the base
salaries averages approximately 115%.
The total labour cost will be approximately US$260,000 per month, including burden,
at full production, or US$7.70 per tonne milled.
TABLE 18-2 MANPOWER
Jaguar Mining Inc
Turmalina Project
Department
Supervision
Technical
Operating
Total
Mine
10
12
99
121
Plant
11
1
48
60
Maintenance
6
1
34
41
Administration
17
5
22
Safety and
Health
1
3
Total
45
17
4
186
248
Open pit mining is contracted and not included in this table.
ENVIRONMENT
PERMITTING
Implementation of a mining project in Brazil entails application for a Licença Prévia
(LP) and is subject to scrutiny by various agencies including:
•
State Environmental Policy Council (COPM)
•
State Environmental Foundation (FEAM)
•
State Forest Institute (IEF)
18-13
•
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State Water Management Institute (IGAM)
The application for a LP must be supported by the following studies/reports that
describe the impact on the physical, biological, and anthropological ecosystems as well as
plans for mitigation and closure.
•
Environmental Impact Study/Report (EIA) (EIS) (RIMA)
•
Environmental Control Plan (PCA)
•
Degraded Areas Recovery Plan (PRAD)
•
Environmental Control Report (RCA)
The RCA is for special cases where the area has already been impacted by a previous
operation.
Turmalina has been designated as such a case since the property was
previously impacted by the AngloGold open pit mining operation.
Upon approval of the foregoing studies, the applicant is granted an Implementation
License (LI) that allows the completion of work, such as the erection of the mineral
processing plant, construction of the tailings dam, opening of accesses, development of
the underground mine, installation of the infrastructure, and preparation of the waste
dump.
After obtaining the LI and mining concession, the company can apply for the
Operation License (LO) that permits the start-up of operations. Approval of the LO is
contingent on meeting all the environmental requirements of the construction of the
surface facilities and underground development.
In addition to State approvals, application must also be made to the DNPM, an
agency of the federal government responsible for control and application of the Brazilian
Mining Code, and awarding of exploration licenses and mining concessions.
The
application must include the exploration/exploitation plan prepared by an authorized
professional such as a geologist or mining engineer. The granting of a mining concession
remains valid until full depletion of the mineral deposit, subject to submitting Annual
Operations Reports, and compliance with safety and environmental regulations. Jaguar
currently holds mining rights to seven concessions issued by DNPM as described in
Section 4.
18-14
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In April 2005, Jaguar initiated the State environmental permitting process by applying
for the LP and submitted the required studies. The environmental permitting covers an
area of approximately 30 ha and comprises the following elements.
•
Open pit
•
Underground mine
•
Waste pile: The waste pile will be designed to hold all of the waste from both
the open pit and underground mine. Design of this dump is in progress.
•
Support buildings, e.g. Administration offices, change house, cafeteria
•
Processing plant
•
Paste fill plant
•
Drainage management systems: A drainage system will be implemented for
the Project area
As of the time of this report, the LP had yet to be issued.
Construction and
development work cannot commence until the required permits (LP and LI) are issued.
DISCHARGE WATER QUALITY
The Project will generate liquid effluents in two points: the Past Fill plant and the
underground mine. Filtrate from the Paste Fill plant will be recirculated within the
leaching circuit and a portion will be treated and either recycled or discharged to the
process or be discarded into to the natural terrain draining line. Mine water does not have
the potential to generate acid drainage, according to tests performed in the LakefieldGeosol laboratory. Mine water may require treatment for suspended solids and oil
separation.
The legal specifications for discharge are set by CONAMA “Resolution” No 357,
dated March, 17, 2005, and are determined according to a classification of the terrain
receiving the effluents. The region in which the mining operation is located is in the socalled “Hydraulic Resources Planning and Management Unit for the San Francisco
Basin”. The key watercourse is the Pará River and the Pará River sub-basin of the São
João River. The Project’s RCA recommends a monitoring program for the final effluent,
measuring for total acidity, total alkaline level, conductivity, pH, color, opacity,
18-15
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chlorides, sulphides, arsenic, copper, soluble iron, total cyanide, total phosphate,
dissolved solids, total solids, sediments, oils, and grease.
ACID ROCK DRAINAGE
Rock samples tested from Turmalina show positive net neutralization potential
(NNP), above 20 kg CaCO3/t, and a neutralization potential ratio (NPR) of 2.89, in the
presence of low sulphur.
These tests indicate that the rock is not a potential acid
generator.
In the RCA, a monitoring program has been proposed to determine the ongoing status
of runoff water from the open pit, underground, and waste pile.
SOCIOECONOMICS
The greatest socioeconomic impact will be on the town of Casquilho, located
approximately three kilometres southwest of the Turmalina Project, and home to
approximately 130 families. The town is bisected by state road MG 423, which will be
used as access to the Project. Casquilho will be negatively impacted by noise, dust, and
vehicle exhaust emissions due to greater vehicle traffic, especially during the project
construction and development phase. Mitigation of the negative impacts will include
planting a row of trees and dust suppression on the roads. The municipal water well
system will be monitored.
CLOSURE
A closure plan has been developed and includes the following components.
•
Removal and stockpiling the fertile soil layer
•
Waste and tailings management
•
Rehabilitation of the mined areas
•
Topographic restoration
•
Re-vegetation of impacted areas
•
Drainage rehabilitation
18-16
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PROJECT SCHEDULE/LIFE OF MINE PLAN
The Project schedule is presently based on a generic start date that will be determined
when the required permits are issued. Construction and development is scheduled to take
place over a 12 month period. In the generic schedule, startup of the plant is scheduled at
the start of Year 1. Detailed engineering and procurement are scheduled to start in the
first quarter of Year -1. Pre-production underground development is scheduled to start in
the second quarter of Year -1 and the first stoping ore is scheduled for the third quarter of
Year -1. Open pit mining will commence in the third quarter of Year -1 and will be
completed before the plant startup.
At startup, there will be an ore stockpile of
approximately 95,000 tonnes.
Plant construction is scheduled to commence in the second quarter of Year -1 and will
be completed at the end of Year -1 over a period of eight months. Commissioning and
testing is scheduled to start two months before startup.
The schedule includes an
allowance for lower throughput at startup, commencing at 18,000 tonnes per month in
Month 1, increasing to 30,000 tonnes per month in Month 5.
In RPA’s opinion the pre-production schedule – essentially eight months - is
ambitious for a greenfields project, but is likely achievable as the Project is relatively
simple and most of the key large items (mills and crushers) have been procured. There is
some downside risk of perhaps one or two months delay in startup, however, this is not
critical to the success of the Project.
18-17
Yr-1
Mining
Open Pit Ore
18-18
Total
Open Pit Waste
Strip Ratio
Underground Waste
Total Waste
Processing
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
000 tonnes
000 tonnes
Plant feed
Grade
Recovery
000 tonnes
g/t Au
Production
000 oz
88
4.2
7
3.9
0
0.0
95
4.2
4.2
126
1.43
3
129
Yr 1
49
5.9
186
4.5
235
4.8
4.8
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
52
6.3
308
5.3
360
5.5
5.5
33
6.4
327
7.0
360
7.0
7.0
1
4.2
359
6.9
360
6.9
6.9
360
5.6
360
5.6
5.6
84
210
75
75
36
36
13
13
0
0
330
4.6
90%
360
5.5
90%
360
7.0
90%
360
6.9
90%
360
5.6
90%
135
7.5
90%
44
57
73
72
58
29
135
7.5
135
7.5
7.5
Total
88
4.18
142
6.1
1,675
6.1
1,905
6.0
6.0
126
TABLE 18-3 PRODUCTION SCHEDULE
210
463
-
1,905
6.0
90%
333
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CAPITAL COSTS
Total pre-production capital costs have been estimated by MSOL and TechnoMine
and are summarized in the following table. The costs include a contingency of 10%.
TABLE 18-4 CAPITAL COSTS
Jaguar Mining Inc.
Turmalina Project
US$ ‘000’s
Open Pit Mining
297
1,297
Underground Mine Equipment
3,837
Plant Equipment
1,755
Plant Construction
7,104
997
Land Acquisition
1,556
EPCM
2,092
Commissioning
36
Environment
416
Total
$19,387
Mine equipment includes purchases totalling $ 1.8 million that will be made in the
first month after startup. This will include more LHD’s and trucks. Ongoing sustaining
capital is estimated to be US$0.5 million over the five year mine life. Future land
acquisition costs of US$0.35 million have been included in 2007. Closure costs are
estimated to be US$1.2 million. The closure cost is assumed to be offset by US$2.1
million in salvage value.
OPEN PIT MINING
The open pit will be mined in the six months prior to startup. A total of 88,000 t of
ore and 126,000 t of waste will be moved. Jaguar has received contractor quotes to carry
out the work as follows:
•
•
•
Ore:
US$1.68 per t
Unaltered waste:
US$1.34 per t
Altered waste (41% of total waste): US$1.04 per t
18-19
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The total cost of the open pit mining will be approximately US$0.3 million.
UNDERGROUND MINE DEVELOPMENT
Pre-production development totals 1,294 m, including 621 m of ramp, 560 m of levels
and stope development, and 113 m of vertical development for ventilation. The average
lateral development requirement during pre-production is 6.6 m per day. The total ore
and waste tonnes produced in pre-production is 61,600 tonnes.
Development costs have been estimated using the following rates:
•
•
•
5 m x 5m ramp
4.5 m x 4.5 m ramp
2.5 m x 2.5 m raise
$1090/m
$900/m
$820/m
UNDERGROUND MINE EQUIPMENT
Underground mining equipment costs are based on quotations from suppliers. Key
mobile equipment is shown in Table 18-1.
Pre-production development equipment
includes two jumbos, three x 12t trucks, two x loaders, one scissor lift. All other mobile
equipment will be purchased after startup.
Other underground equipment includes fans, pumps (submersible and stationary),
cement pump, compressor, lamps, and ancillary equipment.
PLANT EQUIPMENT
Processing plant equipment is based mainly on used equipment. Key long delivery
items have already been acquired, including jaw crusher, cone crushers, rod mill, and ball
mill. Most other equipment is available locally.
PLANT CONSTRUCTION
Costs for the plant have been estimated from supplier quotes and comparable costs
from other projects, notably the Jacobina Mine of Desert Sun. The costs include the
following:
•
•
•
•
•
Electrical (incl. 5km power line)
Piping
Civil works (mainly concrete)
Instrumentation
Structural steel
18-20
$809,000
$460,000
$1,150,000
$294,000
$780,000
•
•
•
Tanks, platework
Paste fill plant
Contractor costs
www.rpacan.com
$846,000
$1,127,000
$1,637,000
RPA notes that the paste fill plant design is very preliminary and more work is
required to finalize the costs on this.
INFRASTRUCTURE
Infrastructure includes roads, site drainage control, and fresh water supply.
LAND ACQUISITION
Land acquisition includes the cost of purchase of current and future land
requirements.
EPCM
EPCM includes all project management.
This is being done by MSOL, with
assistance from independent specialists as required. EPCM totals approximately 12% of
project capital costs.
COMMISSIONING
A commissioning allowance of $36,000 is included.
ENVIRONMENT
Environmental costs during pre-production include permitting and ongoing
monitoring. At the end of the mine life, there is an allowance in the cash flow of
US$1.16 million for closure costs.
This includes US$265,000 for revegetation and
ongoing licensing and monitoring for a period of five years after closure. There is also an
allowance for severances and dismantling of the plant.
OPERATING COSTS
Operating costs have been estimated from first principles and are shown in the
following table.
18-21
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TABLE 18-5 OPERATING COSTS
Jaguar Mining Inc.
Turmalina Project
US$/ tonne milled
Underground Mining
11.16
Processing
12.66
G&A
2.39
Environment
0.18
Total
$26.40
MINING
Open pit mining costs are not included in operating because the pit is mined out
during the pre-production period.
Underground mining is based on three components – stoping costs, including fill and
mine services, ongoing development, and diamond drilling. The stoping costs are based
on unit costs for both the Principal Zone and the NE Zone of $8.22/t and $9.41/t
respectively. Underground development costs are based on a life of mine average cost of
$932 /m. All underground development is expensed to operations after the preproduction
period. The allowance for diamond drilling is 200 m/month at $50/m.
PROCESSING
Processing costs have been estimated using specific labour requirements and
estimates for steel, reagents, power, and spares. Power consumption has been estimated
to average 3.3 MW at a cost of $0.0487 per kWh.
G&A
Administrative expenses are estimated to be $0.5 million per year and include labour
costs for 13 people, insurance, security, and general expenses. Also included in G&A is
$0.3 million per year for management by MSOL.
ENVIRONMENT
Environment costs during operation include ongoing monitoring, revegetation, and
license payments.
18-22
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FUEL PRICE
The costs in the Study are based on a fuel price of 1.80 reals per litre, or
approximately $0.65 per litre. Sensitivity analyses by Jaguar show that doubling the fuel
cost to $1.30 per litre will increase the overall operating costs by 3.5%.
MARKETS
Jaguar will be able to sell the gold produced at international market prices, subject to
a 1% Brazilian federal royalty on gross sales.
ECONOMIC ANALYSIS
The Base Case estimated cash flow for the life of mine is shown in the following
table. The projection is based on the following parameters.
PHYSICALS
•
Mine life:
5.5 years
•
Pre- production period:
8 months
•
Total millfeed:
•
•
Open pit production: 20,000 tonnes per month ore for a total open pit reserve
of 88,000 tonnes at a grade of 4.2 g/t Au and a strip ratio of 1.43:1; 950 tpd
ore and approximately 1,400 tpd waste.
•
•
•
•
Total gold produced: 333,000 ounces, average production is 60,000 ounces
per year.
COSTS
•
Operating cost: $26.40 per tonne milled, ranging from $23.35 per tonne to
$29.21 per tonne.
18-23
www.rpacan.com
•
Capital cost: Pre-production capital is estimated to be $19.4 million
•
Sustaining capital: Ranges from $60,000 to $100,000. Underground mine
development is included in operating costs.
•
Closure costs: $1.1 million, offset by estimated salvage costs of $2.0 million.
•
Exchange rate: US$1.00 = 2.75 Reals
REVENUE
•
Gold price:
•
Transport and insurance: $3.60 per ounce
•
Refining:
•
CFEM (federal) royalty: 1% of gross sales
•
Royalty to previous owners:
$375 per ounce
1% of gross sales
3% NSR, effective
The pre-tax cash flow at $375/oz gold is $46.7 million. At a discount rate of 12%, the
pre-tax NPV is $22.3 million. The Gold Institute Total Cash Cost is $176 per ounce.
The Gold Institute Total Production Cost is $235 per ounce.
Jaguar’s after tax NPV estimate at 12% discount rate is $8.3 million, with a project
IRR of 31.8%. RPA did not review Jaguar’s tax model.
18-24
Yr-1
Mining
Open Pit Ore
Total
18-25
Open Pit Waste
Strip Ratio
Underground Waste
Total Waste
Processing
Revenue
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
g/t Au
000 tonnes
000 tonnes
000 tonnes
Plant feed
Grade
Recovery
000 tonnes
g/t Au
Production
000 oz
NSR
49
5.9
186
4.5
235
4.8
4.8
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
52
6.3
308
5.3
360
5.5
5.5
33
6.4
327
7.0
360
7.0
7.0
1
4.2
359
6.9
360
6.9
6.9
360
5.6
360
5.6
5.6
84
210
75
75
36
36
13
13
0
0
330
4.6
90%
360
5.5
90%
360
7.0
90%
360
6.9
90%
360
5.6
90%
135
7.5
90%
44
57
73
72
58
29
135
7.5
135
7.5
7.5
Total
88
4.18
142
6.1
1,675
6.1
1,905
6.0
6.0
126
210
463
-
1,905
6.0
90%
333
US$/oz
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
375
16,419
157
164
163
15,935
583
15,352
375
21,321
204
213
211
20,692
827
19,865
375
27,286
261
273
270
26,481
1,003
25,479
375
27,068
259
271
268
26,270
996
25,274
375
21,778
209
218
216
21,136
841
20,295
375
11,003
105
110
109
10,679
524
10,155
375
124,875
1,196
1,249
1,237
121,193
4,773
116,420
US$/ t ore
46.52
55.18
70.77
70.21
56.38
75.22
61.11
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Gold Price
Gross Revenue
Transport
1% Refining
1% CFEM Tax
Sub-total
3% Royalty
Revenue
88
4.2
7
3.9
0
0.0
95
4.2
4.2
126
1.43
3
129
Yr 1
TABLE 18-6 BASE CASE CASH FLOW
Open Pit Mining
Mine Equipment
Plant Equipment
Plant Construction
Land Acquisition
EPCM
Commisioning
Environment
Sustaining Capital
Salvage
Total
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
Operating Costs
Open Pit Mining
Underground Mining
Processing
G&A
Environment
Total
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
US$ '000
Open Pit Mining
Open Pit Mining
Underground Mining
Processing
G&A
Environment
Total
US$/t moved
US$/t milled
US$/t milled
US$/t milled
US$/t milled
US$/t milled
US$/t milled
18-26
Capital Costs
Pre-Tax Cash Flow
Operating1
Capital
Total2
Yr 1
Yr 2
Yr 3
Yr 4
Yr 5
Yr 6
Total
1,297
297
2,061
1,755
7,104
997
1,556
2,092
0
393
0
0
17,552
17,552
0
0
1,890
0
0
0
350
0
36
33
0
0
2,309
2,309
0
4,512
4,179
826
121
9,638
9,638
0
0
64
0
0
0
0
0
0
21
60
0
144
144
0
5,019
4,559
826
97
10,501
10,501
0
0
0
0
0
0
0
0
0
21
60
0
81
81
0
4,401
4,559
826
64
9,850
9,850
0
0
0
0
0
0
0
0
0
3
100
0
103
103
0
3,223
4,559
826
33
8,641
8,641
0
0
0
0
0
0
0
0
0
0
100
0
100
100
0
2,999
4,559
826
24
8,408
8,408
0
0
0
0
0
0
0
0
0
1,157
0
(2,046)
(890)
(890)
0
1,110
1,710
413
12
3,244
3,244
1,297
297
4,014
1,755
7,104
997
1,906
2,092
36
1,628
320
(2,046)
19,399
19,399
0
21,264
24,125
4,544
351
50,283
50,283
11.16
12.66
2.39
0.18
26.40
0
0
US$ '000
Cumulative US$ '000
(17,552)
(17,552)
Pre-tax NPV US$ '000
22,366
12%
US$/oz
US$/oz
US$/oz
Notes: 1. Equivalent to Gold Institute Total Cash Cost.
2. Equivalent to Gold Institute Total Production Cost.
13.67
12.66
2.50
0.37
29.21
13.94
12.66
2.30
0.27
29.17
12.23
12.66
2.30
0.18
27.36
8.95
12.66
2.30
0.09
24.00
8.33
12.66
2.30
0.07
23.35
8.22
12.66
3.06
0.09
24.03
3,405
(14,147)
9,219
(4,927)
15,548
10,621
16,529
27,150
11,787
38,937
7,800
46,737
244
210
160
145
170
139
46,737
176
58
235
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Unit Cost of Production
Yr-1
TABLE 18-6 BASE CASE CASH FLOW
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SENSITIVITY ANALYSIS
Figure 18-4 shows the project sensitivity to various factors, including:
•
Head Grade
•
Gold Price
•
Operating Cost
•
Capital Cost
FIGURE 18-4 SENSITIVITY ANALYSIS
32
30
Pre-tax NPV @ 12% (US$ '000)
28
26
24
Gold Price
Head Grade
22
Operating Cost
20
Capital Cost
Exchange Rate
18
16
14
12
10
-10%
0
10%
The Project is most sensitive to gold price and head grade. At a current gold price of
$450 per ounce, the pre-tax NPV at 12% discount rate is $40 million. The break even
gold price resulting in zero pre- tax NPV at 12% is approximately $260 per ounce.
The exchange rate used for the Project is US$1.00 = 2.75 reals, vs the current rate of
2.33 reals. The rate has been used based on economic forecasts by Brazilian banks. At
the present rate of 2.33 on all operating and capital costs, the pre-tax NPV at 12% is
approximately $13 million. Similarly, the Total Production Cost rises from $235 per
ounce to $272 per ounce.
18-27
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Other key sensitivities, in addition to the gold price risk, are dilution, extraction, and
capital cost. The sensitivities are summarized in the following table as pre-tax NPV at
12% discount.
Lower Case
Base Case
Higher Case
US$325
US$375
US$425
US$13 million
US$22 million
US$32 million
-15%
15%
+15%
US$33 million
US$22 million
US$12 million
95%
100%
US$19 million
US$22 million
-15%
US$19.4 million
+15%
US$25 million
US$22 million
US$20 million
-15%
US$26 per t milled
+15%
US$27 million
US$22 million
US$18 million
-5%
90%
+5%
US$19 million
US$22 million
US$26 million
Gold Price
Dilution
Stope Extraction
Capital Cost
Operating Cost
Grade/Recovery
EXPANSION POTENTIAL
The Inferred Resources for the Project are estimated to be approximately 830,000
tonnes at 7.5 g/t Au, or approximately 200,000 contained ounces. In RPA’s opinion,
there is very good potential to convert these resources to reserves with more drilling and
an update to the feasibility study. At the Base Case scenario of $375 per ounce gold,
each extra year of production of 60,000 ounces or more will add approximately $10
million to $12 million to the Project pre-tax operating cash flow prior to capital
(undiscounted). Any material expansion beyond the Base Case will require construction
of a tailings pond. The upgrading of resources to reserves should be a priority for Jaguar.
18-28
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19 INTERPRETATION AND CONCLUSIONS
The feasibility work completed by Jaguar to date has shown that the Turmalina
Project is robust at current gold prices and shows an acceptable operating margin at the
Base Case gold price of $375 per ounce. The feasibility study is not yet complete,
however, most of the key components are sufficiently advanced in all material aspects to
allow Project feasibility to be established.
RPA offers the following comments as observations on the Project development plan:
•
Project development cannot commence until the proper permits are
received.
•
The Project development schedule is ambitious for a greenfields project
(eight months) and there is the risk of some delay of one or two months in
startup
•
There is some risk related to the size of the underground openings to be
backfilled. Consideration should be given to filling smaller openings on a
more frequent basis.
•
The use of the open pit for tailings deposition is nominally an expedient
alternative and, while the risks of inrush to the underground mine have
been studied, this needs to be clearly discussed in the feasibility study.
•
The paste fill plant design, operating parameters, and placement system
are largely conceptual at the present time, however, RPA believes that the
cost estimates are reasonable.
•
Stope extraction does not include and allowance for ore loss, however, the
overall extraction of 91% should be adequate.
•
There exists good potential to upgrade mineral resources at depth and the
Project has the potential for a significantly longer mine life.
19-1
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20 RECOMMENDATIONS
Based on the review, RPA makes the following recommendations:
1. Continue to advance the Project to development, recognizing the potential delays
due to the permitting process.
2. Carry out the proposed drill program to upgrade resources below the 400 m
elevation.
3. Continue the feasibility work, with a particular focus on the following:
a. Finalize the backfill system and method, including;
i. Assessment of crown pillar stability to prevent inrush into the mine
workings.
ii. Assessment of proper sealing of the vent raise connection from the
bottom of the open pit to the mine.
iii. Review of the effect of water on the tailings during the rainy
season and the prevention of liquefaction.
b. Alternative backfill sequences should be studied to allow for stope ground
instability.
c. Ensure all estimates are supported by independent verification of costs.
d. Review the cost and delivery of key equipment to ensure that the costs
properly reflect the current high cost and long delivery of capital items in
the worldwide mining industry.
e. Ensure all aspects of the study are documented in sufficient detail to allow
efficient third party review.
4. Include sensitivity analyses for dilution at 20% for longhole stoping and
extraction of 95% for longhole stoping, in addition to pillar allowance.
5. Prepare benchmark reviews against other Brazilian projects for dilution and
extraction parameters, and capital and operating costs.
6. Complete the purchase of surface rights.
7. Carry out benchmarking of operating and capital costs against other similar
projects in Brazil.
20-1
www.rpacan.com
21 REFERENCES
Duchini J. (2004): Project Geological Summary, Private presentation for Jaguar Mining
Inc.
Duchini J. (2005): Geology of the Turmalina Project, Private report for Jaguar Mining
Inc.
Kashida A. et al (1990): Brazil, The Sleeping Resource Giant, in Economic Geology and
the Bulletin of the Society of Economic Geologists, Volume 85, 1990.
Kosich D. (2004): Jaguar Banks on Three Brazilian Projects: Article in Mineweb, Nov.
17, 2004.
Lobato L. M. (1998): Styles of Hydrothermal Alteration and Gold Mineralization
Associated with the Nova Lima Group of the Quadrilatero Ferrifero, Part 1,
Description of Selected Gold Deposits, in Revista Brasileiera de Geociencias,
Volume 28, 1998.
Machado I. C. (2005): Turmalina Gold Project, Feasibility Draft 12C, including Cash
Flow August 8, 2005: Internal Report for Jaguar, Mining Inc.
Martini S. L. (1998): An Overview of Main Auriferous Regions of Brazil, in Revista
Brasileiera de Geociencias, Volume 28, 1998.
Moreno R. (2005): Mineral Resources Evaluation, Turmalina Gold Project: Internal
Report for Mineracao Serras do Oeste Ltda.
Zucchetti M. et al (2000): Volcanic and Volcaniclastic Features in Archean Rocks and
Their Tectonic Environments, Rio Das Velhas Greenstone Belt, Quadrilatero
Ferrifero, MG, Brazil, in Revista Brasileiera de Geociencias, Volume 30, 2000.
21-1
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22 SIGNATURE PAGE
This report titled “Technical Report On The Turmalina Gold Project, Pitangui, Minas
Gerais, Brazil”, prepared for Jaguar Mining Inc., and dated September 16, 2005 was
prepared by and signed by the following authors:
(Signed & Sealed)
Dated at Toronto, Ontario
September 16th, 2005
Graham G. Clow, P. Eng
Consulting Mining Engineer
Principal
Roscoe Postle Associates Inc.
(Signed & Sealed)
Dated at Toronto, Ontario
September 16th, 2005
Wayne W. Valliant, P. Geo
Associate Consulting Geologist
Roscoe Postle Associates Inc.
22-1
www.rpacan.com
23 CERTIFICATES OF QUALIFICATIONS
GRAHAM G. CLOW
I, Graham G. Clow, P.Eng., do hereby certify that:
1. I am Principal Mining Engineer with Roscoe Postle Associates Inc. of Suite 501, 55
University Ave Toronto, ON, M5J 2H7.
2. I am a graduate of Queen’s University, Kingston, Ontario Canada in 1972 with a
Bachelor of Science degree in Geological Engineering and in 1974 with a Bachelor of
Science degree in Mining Engineering.
3. I am registered as a Professional Engineer in the Province of Ontario (Reg.#
8750507). I am a Member of the Canadian Institute of Mining, Metallurgy, and
Petroleum, and a Member of the Society of Mining Engineers of the American
Institute of Mining and Metallurgy.
4. I have worked as a mining engineer for a total of 31 years since my graduation. My
relevant experience for the purpose of the Technical Report is:
• Review and report as a consultant on more than forty mining operations and
Projects around the world for due diligence and regulatory requirements
• Senior Engineer to Mine Manager at seven Canadian mines and projects
• Senior person in charge of the construction of two mines in Canada
• Senior VP Operations in charge of five mining operations, including two in
Latin America
• President of a gold mining company with one mine in Canada
• President of a gold mining company with one mine in Mexico
5. I have read the definition of "qualified person" set out in National Instrument 43-101
("NI43-101") and certify that by reason of my education, affiliation with a
professional association (as defined in NI43-101) and past relevant work experience, I
fulfill the requirements to be a "qualified person" for the purposes of NI43-101.
6. I am responsible for overall preparation of the Technical Report and individual
sections 16 and 18 to 20.
7. I visited the Turmalina Property June 5 to 7, 2005.
8. I have had no prior involvement with the property that is the subject of the Technical
Report.
9. I am not aware of any material fact or material change with respect to the subject
matter of the Technical Report that is not reflected in the Technical Report, the
omission to disclose which makes the Technical Report misleading.
23-1
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10. I am independent of the Issuer applying the tests set out in section 1.5 of National
Instrument 43-101.
11. I have read National Instrument 43-101F1, and the Technical Report has been
prepared in compliance with National Instrument 43-101 and Form 43-101F1.
12. I consent to the filing of this Technical Report with any stock exchange and other
regulatory authority and any publication by them, including electronic publication in
the public company files on their websites accessible by the public, of this Technical
Report.
Dated 16th day of September, 2005
(Signed & Sealed)
Graham G. Clow, P. Eng
23-2
www.rpacan.com
WAYNE W. VALLIANT
I, Wayne W. Valliant, do hereby certify that:
1. I am an Associate Geologist with Roscoe Postle Associates Inc. of Suite 501, 55
University Ave Toronto, ON, M5J 2H7.
2. I am a graduate of Carleton University, Ottawa, Ontario, Canada in 1973 with a
Bachelor of Science degree in Geology.
3. I am registered as a Professional Geologist in the Province of Ontario (Reg.# 1175).
4. I have worked as a geologist for a total of 32 years since my graduation. My relevant
experience for the purpose of the Technical Report is:
•
•
•
•
Review and report as a consultant on more than thirty mining operations and
projects around the world for due diligence and resource/reserve review
Chief Geologist at three Canadian mines
Superintendent of Technical Services at three mines in Canada and Mexico
General Manager of Technical Services for corporation with operations and
developing projects in Canada and Latin America
5. I have read the definition of "qualified person" set out in National Instrument 43-101
("NI43-101") and certify that by reason of my education, affiliation with a
professional association (as defined in NI43-101) and past relevant work experience, I
fulfill the requirements to be a "qualified person" for the purposes of NI43-101.
6. I contributed to writing all sections of the Technical Report except individual sections
16 and 18 to 20.
7. I visited the site June 5-7, 2005.
8. I have had no prior involvement with the property that is the subject of the Technical
Report.
9. I am not aware of any material fact or material change with respect to the subject
matter of the Technical Report that is not reflected in the Technical Report, the
omission to disclose which makes the Technical Report misleading.
10. I am independent of the Issuer applying the tests set out in section 1.5 of National
Instrument 43-101.
11. I have read National Instrument 43-101F1, and the Technical Report has been
prepared in compliance with National Instrument 43-101 and Form 43-101F1.
23-3
www.rpacan.com
12. I consent to the filing of this Technical Report with any stock exchange and other
regulatory authority and any publication by them, including electronic publication in
the public company files on their websites accessible by the public, of this Technical
Report.
Dated 16th day of September 2005
(Signed & Sealed)
Wayne W. Valliant, P.Geo.
23-4

technical report on the turmalina gold project, pitangui, minas gerais

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