Spotlight: Developments in Brazil's gold segment

Gold miners with operations in Brazil are advancing projects or even starting production this year, while the fight against illegal mining will intensify.

"Gold is a different material from many others in the mining area, because it is seen as a mechanism to preserve value, preserving capital. Especially during times like now, when the world is experiencing a high level of geopolitical and economic tensions, the segment enters the radar of investors," Valdir Farias, executive director at mining consultancy Fioito, told BNamericas.

"We are seeing growing interest from companies wanting to invest more in the gold sector in Brazil and I believe that throughout this year, more projects will be announced, in addition to those that have already been announced," added Farias. 

BNamericas presents the main information disclosed by companies in the sector.

AURA MINERALS

Canadian gold miner Aura Mineralsexpects rising overall output as the Almas project in Tocantins state starts production in the second quarter.

Borborema in Rio Grande do Norte, which Aura acquired after taking control of Australia's Big River Gold, is another key project.

Last year, Aura produced 242,524oz gold equivalent and aims at 400,000oz gold equivalent in 2024 and 450,000oz gold equivalent in 2025. In 4Q22, output reached 67,663oz gold equivalent, compared to 76,827oz gold equivalent a year ago.

"The end of 2022 was an important quarter as we made progress on our understanding of the Borborema project and updated our guidance …  We are now set up for an even stronger 2023 with a continued focus on growth while returning capital to our shareholders," CEO Rodrigo Barbosa said in a recent statement.

TRISTAR

US-based TriStar Gold expects to obtain the environmental license for its US$261mn Castelo de Sonhos project in Pará state in the third quarter.

“The TriStar team met with the regulators at the environmental secretariat (Semas) of Pará state in Belém to confirm the status and timelines for receipt of the license,” according to a recent statement.

“The Semas licensing team informed us that the Castelo de Sonhos project is at the top of the line for EIA review. They remain committed to a technical site visit in March 2023, which is the next major milestone event, to review our environmental management and social engagement practices, and confirm the findings of the EIA,” it added.

The company requested the license in July 2022. Evaluations are also underway for the installation license, allowing building the processing plant and infrastructure, and for the operations license.

TriStar has advanced cave relevance studies and will be initiating detailed archeological studies.

Average production is estimated at 121,000oz/y over 11 years.

JAGUAR

Jaguar Mining, a Canadian-listed junior gold mining, development, and exploration company operating in Brazil with three complexes, is planning to produce 84,000oz-88,000oz this year.

Annual consolidated gold production in 2022 was 80,968oz and 83,878oz in 2021.

"After a slow start to the year, both Q3 and Q4 of 2022 saw our two mines operating consistently and each providing positive cash flow. Efforts to reduce overall costs in the face of high inflation began to take effect in the second half of the year. Growth efforts continue to be focused on our Faina Resource [in Minas Gerais state] on which significant effort was spent in 2022," CEO Vern Baker said in a recent statement.

"The Faina project continues to progress with preliminary economic assessment work to be completed in the first half of the year and pre-feasibility work progressing through the year 2023," he added.

G MINING

Canadian junior G Mining Ventures is developing the Tocantinzinho project in Pará state.

The completion of detailed engineering is expected for the first half, while construction is expected to finish in 1H24, and commercial production should start in the second half of 2024.

G Mining secured a US$481mn financing package to fully fund development, construction and ramp-up.

ANGLO GOLD ASHANTI

In talks to sell its Brazilian Córrego do Sítio mine, operated by AGA Mineração, "AngloGold Ashanti is continually in the process of reviewing opportunities for improvement in its portfolio of assets worldwide. As part of this process, it maintains conversations with companies in the sector, evaluating the best options for Córrego do Sítio in Santa Bárbara, in Minas Gerais state," the company told BNamericas in a recent email.

"At the moment, there are only discussions of proposals and possibilities for the site. At this moment, there is no conclusion," it added.

Córrego do Sítio is in operation since 1989 and consists of one open pit and one underground mine.

ILLEGAL MINING

To confront illegal mining, association Ibram and public officials met recently and discussed, among other topics, how the foreign affairs ministry could help break the illegal gold production and sales chain. Brazil is a top 10 global gold exporter. 

“The trade in illegal gold fuels a criminal alliance in Brazil, which is responsible for some of the devastation we see in the Amazon, something the world is watching. One of the countries that buys most gold from Brazil is Switzerland. I was recently in Geneva to discuss this issue and the adoption of certification for ore imports, with traceability of origin,” Ibram head Raul Jungmann said in a recent release.

Meanwhile, local securities exchange commission CVM will prioritize inspections of certificates and securities brokers, through which illegally mined gold is thought to be laundered.

According to a study by sustainability NGO Instituto Escolhas, 52.8t of gold was produced illegally in 2021, the most recent figure available, up 25% compared with 2020. In 2021, domestic gold production reached 194t, generating 27bn reais (US$5.3bn) in revenues, up 8% from 2020, according to Ibram.