Minesite blurb From Minesite:
https://minesite.com/news/colossus-minerals-is-fully-funded-to-first-production-from-serra-pelada-next-year
April 17, 2012
Colossus Minerals Is Fully Funded To First Production From Serra Pelada Next Year
By Robert Tyerman
Ari Sussman, the experienced executive chairman of Colossus Minerals, is wasting no time in his drive to get the company’s Serra Pelada project in northern Brazil into production. The plan is to be producing gold, platinum and palladium next year. “We are 15 months from production”, says Anne Wilkinson, investor relations chief at Colossus.
Underground at Serra Pelada
The company does not propose to announce a resource estimate for Serra Pelada anytime soon. But anyone who’s aware of the history at Serra Pelada will also be aware of the huge potential.
In the 1980s yielded Serra Pelada yielded around two million ounces of gold and was at the heart of the biggest gold rush in South America since the time of the conquistadors. But for those who need the hard numbers, Wilkinson says Colossus expects to have a formal reserve figure out in the first quarter of 2013.
The pointers are certainly encouraging. The company has delivered some decidedly impressive grades in some parts of Serra Pelada, with gold at up to 70 grammes per tonne of ore, platinum at 516.6 grammes a tonne and palladium at 58.9 grammes a tonne - though that does not mean overall grades will be of that order. Still, recent auger drilling at the Elefante area within the project showed intersections within two metres of the surface with gold grading up to 18 grammes a tonne and platinum grading up to 0.15 grammes a tonne.
Mancuso says these results “continue to expand the potential of the Elefante area”, and that “the high grade intercepts in soils close to the surface could have immediate economic potential”. But, as Wilkinson points out, the whole Serra Pelada project is in “difficult, fractured ground, like Nevada”, and such boons are welcome.
A second drill will soon arrive at Serra Pelada to augment the underground drilling campaign started in December. The idea is to delineate the Serra Pelada orebody as much as possible ahead of bulk sampling this summer. The company also expects to have a gravity circuit and flotation circuit in place in May, says Wilkinson.
More work will be done on metallurgy, but recent results have proved highly encouraging, and at the moment the company is confident that a combined gravity and flotation process will yield between 92% and 96% gold, between 74% and 78% platinum, and between 67% and 71% palladium.
Crucial to the company’s progress on the ground are the good links that Sussman has forged with the garimpeiros, the local unofficial artisanal miners who first flooded into the area in the 1970s and 1980s. The garimpeiros are both knowledgeable and not without political clout but, as Wilkinson puts it, they are not well versed in modern, capital-intensive mining techniques. And nor do they have much of a grasp of environmental impact surveys and other formal and legal procedures.
A recognition of their own limitations led the garimpeiros to deal advantageously with Colossus in the shape of COOMIGASP, an organisation which represents some 40,000 garimpeiros. COOMIGASP sold Colossus its 75 per cent stake in Serra Pelada, and retains a 25 per cent interest.
“COOMIGASP has been a very good partner”, comments Wilkinson. “Its voice in Para state has enabled Colossus to gain permits in 10 months, much more rapidly than we expected.” Such links can be crucial in Brazil, where, as Wilkinson explains, “much of the good ground is in private family hands and you have to be there on the spot”.
Colossus, which has raised C$200 million since floating in 2008, says it is fully funded both for this year’s C$10 million exploration programme and for the C$175 million in capital expenditure needed to take the project into production. To help the company get there, Sussman has recruited Claudio Mancuso, formerly of established Canadian gold producer Agnico-Eagle, as Colossus’s chief executive officer.
And he’s also provided a bit of strength-in-depth, by buying the epithermal Cutia gold, silver and copper project which lies 13 kilometres to the south-east of Serra Pelada. The price tag is a relatively modest initial C$800,000, with up to C$1.2 million on top if all goes well.
And the deal-making mightn’t stop there. Wilkinson says that Colossus remains open to “corporate deals, if the right opportunities come along”.