Investment in Rio Grande do Norte gold announced by Crusader
Date added: 12th January, 2010 at 09:13
(view all articles from January, 2010)
Categories: Natural Resources
An investment in Rio Grande do Norte's natural resources has been provisionally agreed by an Australian mining company.
Crusader Resources - an iron ore producer - has secured an option to acquire full ownership of the Borborema gold mining project in the Latin American country's North Eastern state.
Having completed due diligence work on the site, the firm will now decide whether to purchase the 100 per cent stake in the mine for $2.4 million (£1.5 million), Proactive Investors reported.
In an interview with the news provider, Crusader's managing director Rob Smakman said that funding the investment in Rio Grande do Norte would be possible thanks to the success of another of its Brazilian operations - the Posse iron project in Minas Gerais.
"Cashflow generated from Posse should put the company in a sound position to advance other projects in our portfolio," he said. "The Borborema gold project is one of these."
The site is one of the largest gold reserves in North East Brazil and has "excellent" potential for exploration of the natural resource, the news provider pointed out.
Furthermore, it noted that the investment in Rio Grande do Norte is positioned close to a number of major cities such as Mossoro, Fortaleza, Natal and Joao Pessoa.
Crusader will also benefit from Borborema's pre-existing infrastructure, the article said, including its power grid, water supply, network of roads and buildings.
Its agreement includes the acquisition of three mining licences which cover a combined area of 29 sq km, while it will also have freehold title over the property.
Despite all the positives attached to the location, Mr Smakman said the project would not break the bank.
"It is attractively priced in an environment of record gold prices," he said, before adding that the Australian miner will now work on producing a resource statement for the site over the coming months.
Crusader has indicated that its investment in Rio Grande do Norte may not be the last project that it looks to take on in Brazil.
A statement from the company on its website indicates the potential which it sees in the Latin American nation, saying: "Crusader believes that Brazil is a vastly underexplored country with high potential for the discovery of world class mineral deposits."
It is not the only international firm to make an investment in Rio Grande do Norte in recent months. At the end of last year, Largo Resources revealed it had acquired a tungsten reserve in the state, which it said would cost $900,000 (£559,000) over 18 months.
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