Brazil Resources Inc. ("Brazil Resources" or the "Company") (TSX-V: BRI; OTCQX: BRIZF) is pleased to announce the completion of its acquisition of Brazilian Gold Corporation ("BGC") (TSX-V: BGC) pursuant to the previously announced plan of arrangement between the parties (the "Arrangement"). The Arrangement was approved by shareholders of BGC on November 20, 2013 and the Supreme Court of British Columbia on November 21, 2013. Under the Arrangement, the Company acquired all of the 103,608,796 issued and outstanding common shares of BGC (the "BGC Shares") for consideration consisting of 0.172 common shares of Brazil Resources (the "BRI Shares") per BGC Share. Total consideration under the transaction was approximately $13.5 million.
Amir Adnani, Chairman of Brazil Resources, stated: "The directors and management of Brazil Resources are very pleased to announce the completion of this transaction. The acquisition of BGC has expanded our project base in the region and represents a significant milestone in our strategy to build shareholder value through targeted accretive acquisitions. On behalf of the Company, we welcome BGC's shareholders and look forward to progressing the combined companies' projects."
As previously disclosed, BGC's directors and senior officers have entered into lock-up agreements with Brazil Resources respecting BRI Shares received in exchange for their BGC Shares under the Arrangement.
Brazil Resources has significantly expanded its project base in Brazil as a result of acquiring BGC and its projects, which include, among others, the following projects.
São Jorge Project
The São Jorge Gold Project, located 82km north from the city of Novo Progresso and 30km south of Morais de Almeida, is accessible by the mostly paved highway BR 163, which also provides access to the newly developed Santarem port in Pará State. In addition, electricity is available on site and the Jamanxim River, located 9km west of São Jorge, will supply sufficient water to the project.
Surubim Group
The Surubim Group includes the Patoa, Tucunare, Colonia and Jau targets. The Surubim Group includes eleven concessions, applications and bids that cover an area of approximately 63,701 ha. The Jau target is located in the eastern part of the group and is underlain by granitic and felsic volcanic rocks. On June 5, 2012, BGC announced an independent NI 43-101 resource estimate on the Jau deposit with an inferred mineral resource of 19.44 Mt grading 0.81 g/t gold (503,000 ounces gold) at a cut-off grade of 0.3 g/t gold.
The foregoing resource estimate was completed by BGC, is historical in nature and is not being treated as a current resource estimate by Brazil Resources as a qualified person has not done sufficient work on behalf of the Company to classify the historical estimate as a current mineral resource. While the historical resource estimate should not be relied upon, the Company believes the historical estimate provides an indication of the potential of the property and is relevant to ongoing exploration. However, additional evaluation and other work, including a detailed review of the assumptions and models used in the estimate and underlying exploration work, needs to be completed by Brazil Resources in order to treat the resource estimate as current.
The historical estimate for the Jau target was based on a total of 20 drill holes containing 2,978 gold assays. Gold assay were composited at 2.5 m lengths and interpolated into the block model using ordinary kriging. A three dimensional solid model of the mineralization was constructed to constrain the resource estimate. The block model is comprised of individual blocks measuring 20 m by 20 m by 5 m with the long dimensions of the block orientated east-west and north-south. No economic studies have been completed on this property and, as a result, the economic cut-off is unknown. A gold cut-off of 0.3 g/t was highlighted in the estimate as a possible open pit cut-off.
The above historical resource estimate for the Jau target is based on a technical report completed for BGC by Jim Cuttle, P.Geo. and Gary Giroux, P. Eng. titled "NI 43-101 Technical Report on the Rio Novo Gold Project and Resource Estimate on the Jau Prospect" with an effective date of April 15, 2012.
Boa Vista Gold Project
The Boa Vista Project has extensive historic alluvial and lateritic workings that were largely unexplored until 2010 when BGC and their joint venture partners started systematic exploration programs across the property. The exploration programs quickly outlined a number of prospective targets (Jair, Ze do Leicha, Almir, Planalto and Pistinha) and the discovery of the VG1 deposit.
On August 9, 2012, BGC announced an independent NI 43-101 inferred resource of 8.47 Mt grading 1.23 g/t gold (336,000 ounces) at a 0.5 g/t cut-off for the VG1 deposit.
The foregoing resource estimate was completed by BGC, is historical in nature and is not being treated as a current resource estimate by Brazil Resources as a qualified person has not done sufficient work on behalf of Brazil Resources to classify the historical estimate as a current mineral resource. While the historical resource estimate should not be relied upon, the Company believes the historical estimate provides an indication of the potential of the property and is relevant to ongoing exploration. However, additional evaluation and other work, including a detailed review of the assumptions and models used in the estimate and underlying exploration work, needs to be completed by Brazil Resources in order to treat the resource estimate as current.
The VG1 deposit had been tested by 15 diamond drill holes (3,007 m) and 14 trenches (2,299 m) containing 3,399 assays. The drill holes intersected a west-northwest striking, steeply dipping mineralized zone that is up to 85 m in thickness and extends at least 150 m below surface based on existing drilling. The mineralized zone consists of quartz-pyrite stockwork and silicified zone(s) that are hosted within a foliated, mixed mafic volcanic and intrusive unit at or adjacent to granite rocks. Gold assays were composited at 5 m lengths and interpolated into the block model using ordinary kriging. A three dimensional solid model of the primary and oxide mineralization was constructed to constrain the resource estimate. 12 of the 15 diamond drill holes and 6 of the 14 trenches penetrated these solids over a strike length of 500 m and were used in the resource estimate. The block model is comprised of individual blocks measuring 20 m by 20 m by 5 m with the long dimensions of the block orientated east-west and down dip.
About Brazil Resources Inc.
Brazil Resources is a public mineral exploration company with a focus on the acquisition and development of projects in emerging producing gold districts in Brazil, Paraguay and other parts of South America. Currently, Brazil Resources is advancing its Cachoeira and São Jorge Gold Projects located in the State of Pará, northeastern Brazil.
Technical Information
Paulo Pereira, Brazil Resources' Vice President of Exploration has supervised the preparation of the technical information contained in this news release, reviewed the São Jorge Report on behalf of Brazil Resources. Mr. Pereira holds a Bachelor degree in Geology from Universidade do Amazonas in Brazil, is a qualified person as defined in NI 43-101 and is a member of the Association of Professional Geoscientists of Ontario.
