Mining in Brazil’s ‘Garden of Gold’

Graham Roberts (UK)

There is an old maxim in the mining industry that says, “Mines are where you find them”. To put it another way, you cannot change the location of geological deposits. This is frequently unfortunate for all involved and, almost inevitably, takes exploration and mining companies to wherever the best economic mineral deposits can be found, whatever the challenge. Such a quest has recently taken London-listed Serabi Mining plc (Serabi Mining) to the Tapajos region of northern Brazil. The Tapajos was the location of a major artisanal mining gold rush from the early 1970s to the late 1990s. During this time, it has been estimated that up to 30 million ounces of gold may have been extracted, making it one of the largest gold regions in the world. However, despite these figures, this exciting area has been poorly explored to date.

The Tapajos region is situated in the Central Amazonian Province, within the Amazon Craton, and is mainly of Proterozoic age. The gold deposits have various geological settings but, amongst these, a dominant NW-SE fracture zone some 100s of kilometres long and about 50km wide is particularly important. Serabi Mining has secured an extensive land position and identified a number of targets along 70km of this zone, in addition to other Tapajos projects. Geological potential also exists for very large, low-grade gold and copper deposits of the porphyry and IOCG (Iron Oxide Copper Gold) types.

Serabi Mining was founded as a private company in 1999. From the outset, there were widespread signs that extensive gold was present throughout the region. This followed from the work of the artisanal miners, known as “garimpeiros”, who recovered gold from the alluvial and soft, weathered surface bedrock of the Tapajos gold province. However, they were forced to stop when they encountered the primary underlying gold-bearing mineralisation, from which they were unable to recover the gold due to technical difficulties they could not overcome. Based on the already extensive knowledge of these gold deposits, but applying modern exploration, mining and metallurgical techniques, Serabi Mining has now established the first modern mine in the region at Palito and is evaluating other mining opportunities.

The location of the Palito Gold Mine is known as “Jardim do Ouro”, which translates to “the Garden of Gold”. Rio Tinto conducted limited drilling on a number of Tapajos projects during the 1990s, including the area that now hosts Serabi’s Palito underground mine. These early drilling results at Palito showed the rock contained good gold values. Further studies showed Palito to be a series of high grade, gold-copper vein style mineral deposits in a granitoid setting, with drill indications of gold mineralisation grading up to 30g/t of gold or more. (Average grades worldwide for gold mines usually vary in the range of 2g/t to 6g/t.)

Gold occurs within sub-massive chalcopyrite and also as free gold. Subsequently, the company has undertaken extensive drilling leading to a resource of 825,900 ounces gold equivalent, that is, taking account of the copper. So far, 54 vein structures have been identified but the mineralisation continues at depth and along a strike that remains to be tested. Furthermore, extensive exploration in the area using geochemistry, geophysics and good ‘old-fashioned geology’ has indicated a large number of other potential mining targets that will soon be tested by drilling.

Initially, Serabi established a carbon-in-pulp (“CIP”) recovery plant to process the tailings left behind by the garimpeiros in 2003. Since then, the company has developed a modern underground mine and expanded the plant. To overcome the recovery problems faced by the garimpeiros, the company chose to produce a gold-copper sulphide concentrate through an established industry process of flotation. This results in a very high-grade, sand-like material that is then dried and placed in one-tonne bags. The bags are loaded onto barges, taken to the port of Belem at the mouth of the River Amazon and shipped to Belgium, for final recovery of the gold and copper metal. Up to 80% of the gold recovered is contained in this concentrate, while the remaining 20% is extracted through the CIP circuit to produce gold bullion.

These recovery techniques lie at the heart of the opportunities for Serabi in the region, which the garimpeiros were previously unable to achieve with their more primitive methods. Altogether, rates of about 94% gold recovery are achieved. Output in 2006 is expected to reach about 45,000 ounces gold equivalent, rising to over 50,000 ounces in 2007. As the gold grades at Palito are unusually high, operational costs are expected to be low now that the mine is fully commissioned. (It opened in 2006.)

Having successfully overcome the obstacles in establishing its first mine, Serabi now intends to use the lessons learned in order to establish other operations in the region. There is no doubting the considerable challenges faced in bringing the Palito mine into production. However, the gold deposits of the Tapajos are exceptional, making the effort well worthwhile.

For further details, see: www.serabimining.com.

About the author

Graham Roberts BSc, FIMM, CEng is chairman of Serabi Mining plc.