Last checked at (Sharecast News) - Brazil-focussed gold mining and development company Serabi Gold has acquired the Sao Domingos exploration licence to the west of the Sao Chico deposit, it announced on Monday.
The AIM-traded firm said Sao Domingos would add another 4,999 hectares to its portfolio.
It described the licence as being contiguous and west of its existing exploration interests and its Sao Chico deposit, lying along strike from Sao Chico.
The tenement was being acquired from Brazil Americas Investments & Participation Mineracao (BAIP), for a consideration of $0.1m in cash and a 2% net smelter return royalty over future gold production generated from the licence area.
Serabi said it paid $50,000 on signing of the acquisition agreement, and would pay a further $50,000 on completion of the transfer of the mineral rights.
Upon completion of a JORC or NI 43-101 compliant technical report, Serabi could elect to purchase half the royalty, or 1%, for the greater of $10 per gold ounce, or $0.5m.
The tenement hosts multiple active and abandoned artisanal workings, the board reported, which had produced "significant" levels of gold.
Serabi said the property had been subject to past exploration activity in the late 2000's and early 2010's, including a limited surface diamond drilling programme.
A limited number of samples taken by Serabi personnel in 2016 and 2017 from the tailings of artisanal workings returned grades of as high as 14 grams of gold per tonne.
"The Sao Domingo tenement has been a property we have had an interest in for some years," said chief executive officer Mike Hodgson/
"We see this acquisition as an excellent addition to the Sao Chico project as we try to realise the value of the immediate surrounding district.
"The Sao Domingo tenement hosts a number of historic artisanal workings, with many examples of exceptionally high-grade ore being mined."
Hodgson said two "stand-out" prospects, Toucano and Atacadao, typified that, and were of particular interest.
He said Toucano is an artisanal open pit which was reported to have produced exceptional grades, mining a 20 metre wide mineralised zone to depths of 40 metres and extending over a strike length of one kilometre.
"At Atacadao, a 11 hole drill programme was completed in 2006, testing the mineralisation under the artisanal workings.
"The results of this modest programme intersected high grade gold mineralisation ranging from three to 60 grams of gold per tonne at an average true width of between 0.2 to 0.8 metres.
"The mineralogy appears very comparable to what we have found at Palito and Sao Chico."
Hodgson said the prospectivity of the Sao Domingos tenement was "extremely exciting", complementing the potential of the previous tenement announced on 25 August which hosts the extension of the Fofoca artisanal operation located just to the north of the tenement.
He described Toucano as a "walk-up, drill-ready" target.
"Considering the reported widths that have been mined, any significant depth extension to this prospect could result in a significant discovery for Serabi.
"Atacadao has reported gold intersections from previous drilling which reinforces the potential around this area including the Colibri prospect to the south west.
"I am therefore very pleased that Serabi has secured this additional tenement and believe that excellent potential exists for further high-grade satellite ore bodies to be identified."
At 0813 BST, shares in Serabi Gold were up 3.9% at 106.5p.
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