Tucano Gold mining company will resume mining in Amapá with its own fleet – News of Brazil
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Changing the strategy adopted by previous controllers, of working with outsourced mining, Tucano Gold decided to have its own operation and for this purpose it hired a fleet of new equipment, which includes eight 60-ton trucks, two excavators and a loader, which are being transported to the company website, in Amapá. A second delivery is scheduled for July.
“We believe now is a good time to restart Mina Tucano, with a firm gold price and world-class infrastructure in place. Our first goal is to reach 6,000 ounces per month by August and use the cash flows from these gold sales to slowly increase that number to 12,000 ounces per month by mid-2025. The higher the price of gold, the more We will quickly be able to increase our monthly ounces. Like some nut-allergic children, we are allergic to debt and prefer to grow up with our own cash flow. It is very important for us to bring long-term jobs back to this beautiful part of Amapá and run the business without debt and excessive corporate expenses”he said Jeremy Gray, CEO of Tucano Gold.
He added that the company decided to restart slowly and therefore planned to feed the 10,000 t/day (3.5 million t/year) plant with low-grade stocks and fresh material from the TAP AB1 pit. “We have more than a million tonnes of low-quality material close to the plant, with an estimated grade of 0.5 g/t. This material is a welcome source of low-cost gold.”. He estimates that the operating cash cost on a scale of six thousand ounces/month will be less than US$1,200. “This will give us the firepower to start Stage 2 of our growth plan in the second half of 2024, with the mining of Urucum Centro-Sul, where there are 127 thousand ounces of gold in the current pit”. And he informs that for this work he hired the services of U&M, which knows the operation well.
“Our open pit mines will more than finance Stage 3, which is underground mining. We believe that the Urucum “Complex” is arguably the best undeveloped underground gold project in Brazil and probably one of the top three in the world. Currently, there are still 13 thousand ounces in the Urucum Norte mine, but the key to reaching 150 thousand ounces per year in the long term is to go underground”adds Gray.
For him, the project has the potential to extract 4,000-5,000 tons of ore per day with a recovered grade of 4 g/t (Reserve 160koz @ 4.85 g/t + Inferred Resource 748koz @ 5.17 g/t). “Our modeling suggests that the Urucum Complex will have a cash cost of around US$800 per ounce, which, at the current gold price, could generate more cash flow in a month than our current market value. We expect this mine plan to grow considerably as the deposit is opened deeper, both to the North and South.”.
The CEO reports that both Beadell and Great Panther, former controllers, carried out extensive and deeper drilling with great success. Great Panther spent about US$40 million drilling Urucum Norte in 2019-21. Both knew the underground potential and regularly reported deeper holes.
Iron ore at US$5 per ton
Beadell also invested in the potential for capturing existing iron ore in this system and built what is now called the Tucano Green Iron plant. Tucano Gold’s managers believe that the iron ore production plant, which was previously operated by Anglo American for Beadell, with a capacity of 500,000 tonnes/year, can easily be expanded to 1 million tonnes per year to produce a clean, high-grade magnetite concentrate of 67-69% at a cost of just US$5 per ton of concentrate. “The cost is low, because the plant processes the iron ore contained in the gold ore waste. “When back in operation, we will produce the cleanest, greenest and lowest-cost iron ore in the industry and it is quite reasonable to suggest that this by-product could reduce our AISC by up to US$200 per ounce. Our investment to restart is less than US$2 million and the payback is about 3 months based on current iron ore prices”Gray clarifies.
He opines that the timing to restart gold mining is perfect and believes that gold today is like iron ore in 2003. “At that time, the Japanese were the biggest buyers of iron ore, just as the Indians were for gold. Then China arrived and the iron ore market changed forever. The same could be happening with gold, where we think the Chinese will dramatically overtake Indian buyers.”.
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