Brazilian Gold Corporation ("Brazilian Gold") is pleased to announce that it has signed a Share Exchange Agreement dated ("Agreement") with D'Gold Mineral Ltda. ("D'Gold") to acquire D'Gold's 13.05% interest in Boa Vista Gold Inc. ("BVG"). BVG indirectly holds a 100% interest in the Boa Vista gold project (the "Boa Vista Project").
In consideration for D'Gold's 13.05% interest, BGC will issue an aggregate of 1,500,000 common shares over an eighteen month period. According to the Shareholders Agreement dated January 21, 2010, as amended, governing BVG, D'Gold is entitled to a 1.5% Net Smelter Return royalty, which can be purchased by Brazilian Gold for US$2,000,000 during a period commencing on the closing date of the Agreement ("Closing") and ending 48 months following the Closing.
The Agreement remains subject to TSX Venture Exchange acceptance. The Brazilian Gold shares included in this agreement will be subject to certain resale restrictions imposed under applicable securities legislation. The Closing of the above transaction will take place five business days following Brazilian Gold receiving the approval of the TSX Venture Exchange. On Closing, Brazilian Gold will own 84.05% of the Boa Vista Project, subject to the royalty agreements.
Boa Vista Project
The Boa Vista Project is a large property (12,889 Ha) located in the Tapajós region of northern Brazil with extensive historic alluvial and lateritic workings that was largely unexplored until 2010 when Brazilian Gold and their joint venture partners started systematic exploration programs across the property. The exploration programs quickly outlined a number of highly prospective targets (Jair, Ze do Leicha, Almir, Planalto and Pistinha) and the discovery of the VG1 gold deposit.
The maiden mineral resource estimate on the VG1 deposit was completed shortly (16 months) after the discovery was reported in March 2011 (News Release 5/11 and 6/11). The mineral resource estimate outlined an inferred resource of 8.47 Mt grading 1.23 g/t gold (336,000 oz) at a 0.5 g/t cut-off and is based on shallow (<150 m depth) and limited drilling (15 holes in 3,007 m) and trenching (14 trenches in 2,229 m) of the eastern 600 m of an overall 2,000 m gold-in-soil anomaly. The mineralization forms a coherent deposit that is not significantly affected by changes in the cut-off grade near the declared mineral resource grade of 0.5 g/t gold; the resource is open at depth and along strike with a high potential to expand the existing mineral resource with additional drilling. Coarse gold visible in some drill cores and trench samples, and screened metallic analysis of selected trench and drill samples -suggests the overall grade of the deposit could be higher when larger samples are mined and processed.
Exploration programs (soil geochemistry, geophysics and limited drilling) have covered approximately 25% of the property and further exploration programs are planned to explore the remainder of the property, where numerous historic garimpeiro workings have been identified. In addition, step-out and infill drilling will be completed at the VG1 deposit to determine the limits of the mineralization.