Lavras Gold (TSX-V:LGC) Corp, the newly launched exploration company, has set out its strategy for 2022, which will focus on targeted gold exploration at its Lavras do Sul (LDS) project in southern Brazil.
The Canada-based company was spun out of Amarillo Gold Corporation (TSX-V:AGC, OTCQB:AGCBF), which was bought by Hochschild Mining PLC (LSE:HOC, OTCQX:HCHDF) earlier this year.
Lavras Gold said its immediate goals for 2022 are to grow gold resources at LDS to at least one million ounces, drill-test five priority exploration targets, and consolidate its total number of shares outstanding.
READ: Amarillo Gold says its acquisition by a subsidiary of Hochschild Mining and the spin-out of Lavras Gold is expected to occur on April 1, 2022
"This is a fresh start for the company and the property," Michael Durose, the company's president and CEO said in a statement. "We have launched Lavras Gold with a tight capital structure, nearly $10 million in cash, and a 2% NSR royalty on the Mara Rosa exploration ground that we acquired from the Amarillo Gold spinout. We are well-positioned to execute on our strategy to create value for all of our stakeholders by focusing on realizing the multi-million ounce potential of the LDS project."
Located in the state of Rio Grande do Sul, the LDS project is 4.5 hours by road southwest of the city of Porto Alegre. It is near excellent infrastructure, including tarmac roads, water, and power, Lavras Gold noted.
Exploration to date indicates that the project hosts an alkaline gold-copper system with components of porphyry and epithermal styles of mineralization, a unique geological setting in Brazil. These systems are known to host potentially large gold deposits.
There are currently 23 known gold prospects and historical diggings scattered throughout the 22,000-hectare property. There is a pipeline of targets at different stages of exploration; the most advanced are Butia, Cerrito, Zeca Souza, Caneleira, and Matilde.
Geologic data
So far, around 54,000 metres (m) of drilling over 227 holes have been completed on the LDS property, Lavras Gold said.
It said geological data already on hand will be compiled and reinterpreted, which will help advance the exploration program and guide the selection of new drilling targets.
Two diamond drills have been onsite since January, and a 12,000m drill program is underway testing priority targets.
At Matilde, the goal of the drill program is to test for extensions to gold mineralization along strike and down-dip from previously discovered zones of mineralization.
These include holes:
- 20MT_001 that returned 62.5m grading 0.62 grammes per tonne (g/t) gold, including 14m grading 1.13 g/t gold from 184m, and 12.8m grading 0.89 g/t gold from 191.5m
- 20MT_002 that returned 144.6m grading 0.69 g/t gold, including 91.6m grading 0.87 g/t gold (9m grading 1.02 g/t gold from 172.0m and 1.04 g/t gold from 184m), and 0.6m grading 30.90 g/t gold from 261.0m
At Matilde Extension, the drilling is targeting deeper portions of an interpreted gold-bearing structure, while at Zeca Souza, the goal is to test for parallel gold structures along the east-west strike length of the target.
Meanwhile, at Caneleira, the focus will be to evaluate the strike extension and depth potential of known mineralization.
Butia prospect
The most advanced prospect at LDS is Butia, where mineralization extends from surface to a depth of 300m, with widths of 15m-20m, Lavras Gold said.
An independent technical report completed on the prospect earlier this year showed an NI 43-101 measured resource estimate of 0.65 g/t grade and 2,906 ounces (oz) of gold in saprolite and 0.89 g/t grade with 128,623 oz in hard rock.
The indicated resource estimate was 0.95 g/t grade and 7,568 oz for saprolite, with 0.92 g/t grade and 238,207 oz for hard rock.
According to the report, the inferred resource estimate was 1.32 g/t grade and 2,526 oz of gold for saprolite, with 0.96 g/t grade and 112,115 oz for hard rock.
Maiden resource at Cerrito
Lavras Gold also said a NI 43-101 resource for the Cerrito target is nearly finished.
Some 10,430m over 48 drill holes have been completed at Cerrito, where gold occurs along structures within hydrothermally altered monzogranites.
Holes have been drilled to a vertical distance of 425m with gold grades improving at depth, demonstrating the need to focus on gold-bearing structures vertically as well as laterally, the company pointed out.
Lavras Gold also announced that it plans for a share consolidation on the basis of 10 pre-consolidation common shares for one post-consolidation common share.
Lavras Gold is a Canadian exploration company focused on realizing the potential of the Lavras do Sul (LDS) gold project in Brazil. The project is believed to host an alkaline porphyry gold copper system. More than 23 gold prospects centred on historic gold workings have been identified on the property, which spans more 22,000 hectares.
The company's vision is to maximize shareholder value by applying a sustained systematic and technically-based exploration program to the LDS project and any other opportunities that may arise.
Contact the author at jon.hopkins@proactiveinvestors.com