Avanco Resources (ASX:AVB) has released a maiden resource estimate on the Blanket zone of its Centrogold project in Brazil. This first resource estimate contains an inferred resource of just short of 700,000 ounces gold at an average grade of 1.8 g/t, and will be the basis for a first scoping study on the project.
Avanco thinks it will be able to develop the entire Centrogold project (which contains 88.5 million tonnes at 1.14 g/t gold for 3.2 million ounces in a non-compliant resource estimate and 1.3 million ounces at 2 g/t in a JORC compliant estimate) through a scalable model with a low initial capex. The resource on the Blanket zone is just a first step, and an additional resource estimate on the Contact zone is underway whilst Avanco is trying to solve some legacy licensing issues.
Previously, the project had been awarded an environmental license which was subsequently suspended by another government agency. It’s usually not easy to be caught in the middle of a bureaucratic problem, but Avanco seems to be confident it will solve the licensing issue in the current semester, which would pave the way to complete the earn-in deal to obtain 100% ownership of the Centrogold project. The future development of Centrogold will be funded by the cash flows from the Antas copper mine, where the company produced 15.5 million pounds of copper in H2 CY 2016, at an AISC of less than $1.55/lb.
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