2012 Brazilian Gold Production B&A Mineraçao’s Acquisition of Rio Verde Q&A: John Blake, Luna Gold Exploration News
BRAZIL EXPLORATION BRIEFING
Vol 2 • April 2013
HIGHS & LOWS Brazilian producers saw stagnant production in 2012, after a spike in gold prices led to a production bonanza in 2011. Brazil is now depending on newly producing mines to hold up annual production results as output drops. It seems explorers aren’t the only firms struggling in the current gold space. Producers are also looking for answers. Brazil’s production numbers in 2012 underscore a hostile market, as year-end results revealed waning production and rising costs across the country. Cash costs per ounce inflated markedly, increasing an average of 16% from 2011 to 2012 across Brazil’s five largest mines, according to Mining Leaders research. That spike led to a $499 increase in cost-per-ounce production at the five operations, where soaring extraction costs have stifled new development. Gold production stagnated at Brazil’s 11 largest mines, showing 0% growth on the year, and falling slightly from 1.547Moz to 1.53Moz. Brazil’s lackluster results can largely be laid on falling production at Jaguar Mining’s Paciência and Turmalina mines. The two projects’ output fell 75% and 38%, respectively, due to long-term shutdowns starting in May 2012. In a press release, Jaguar attributed the delays to maintenance and the implementation of new mining methods: “2012 was a challenging year for Jaguar and these results reflect the magnitude of the challenges,” said Jaguar President and CEO David Petroff after the release. Of Brazil’s top 11 producing mines, five saw falling production, and two showed no noteworthy increase.* Production at AngloGold Ashanti’s Serra Grande mine also * Mining Leaders assumed 2012 production at Sossego to be equal to 2011 figures, as current results had not yet been released at time of publication.
/mining.leaders
Yamana’s Jacobina project produced 116,000oz in 2012 trended down, dropping 26% on the year. The mine, which consists of three underground mines (Mina III, Mina Nova, and Mina Palmeiras) as well as an open-pit section, had produced 3.4Moz as of mid-2012 and produced 133,166oz in 2011. According to AngloGold’s midyear projections, the firm had expected higher production—a total of 540,000oz from its Brazil operations. Instead it extracted 486,000oz. In May 2012, AngloGold initiated a takeover of Serra Grande, worth $220 million, from
Cash costs per ounce inflated markedly, increasing an average of 16% from 2011 to 2012 across Brazil’s five largest mines
@miningleaders
Kinross, who also had a trying year. Kinross sold the remaining 50% of the project following a $2.5 billion write-down in February that saw its share price drop nearly $2.00 in two weeks. The buyout mirrored a global flood of divestiture deals in 2012, as major companies continue to shed assets and remain solvent. Kinross then weathered a significant drop in its production results across all operations, which fell 6% in the first quarter of 2012 compared to the year prior. Costs on the rise Meanwhile, cash costs per ounce at Serra Grande, Brazil’s fifth largest mine, increased 6% to $816 in 2012, making it Brazil’s second most expensive operation to run. AngloGold’s flagship AGA Mineração project saw the largest increase in cash costs per ounce, rising 33% from 2011 to $696. Kinross’s Paracatu mine, Brazil’s largest, was the costliest at $881
BRAZIL EXPLORATION BRIEFING Vol 2 • April 2013
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IN FIGURES TOP 5 MOVERS
BRAZIL GOLD INDEX
60% Kenai Resources 42% INV Metal 40% Serabi Gold 33% Lago Dourado
The Brazil Gold Index measures the average market capitalization of 13 Brazil-focused gold juniors (AGC, ORA, BSX, BGC, BRI, CPN, CSI, JAG, LDM, LGC, MNM, CDG and CAS).
12% Horizonte Min. Ticker
Shares
Share Price (C$)
Prev Month (C$)
% Change Market Cap (C$m)
Cash (C$m)
Moz
EV/oz
$0.00
1.85
$25.71
2.60
$28.98
Canada TSX & TSX-V Amarillo Gold
AGC
69,938,085
$0.680
$0.750
-9
$ 47.6
Amerix Precious Metals
APM
82,454,934
$0.035
$0.040
-13
$ 2.9
Aura Minerals
ORA
228,358,334
$0.330
$0.360
-8
$ 75.4
Belo Sun
BSX
265,910,000
$1.140
$1.150
-1
$ 303.1
6.90
$43.93
Brazilian Gold
BGC
103,230,000
$0.190
$0.210
-10
$ 19.6
2.60
$7.54
Brazil Resources
BRI
41,330,000
$1.100
$1.060
4
$ 45.5
0.67
$78.60
Carpathian Gold
CPN
555,419,911
$0.280
$0.300
-7
$ 155.5
9.00
$17.28
Colussus Minerals
CSI
106,953,401
$3.110
$3.060
2
$ 332.6
Cosigo Resources
CSG
73,175,423
$0.100
$0.110
-9
$ 7.3 0.98
$13.23
Eagle Mountain Gold
$7.20
Z
37,583,526
$0.345
$0.360
-4
$ 13.0
Horizonte Minerals
HZM
360,046,170
$0.165
$0.190
12
$ 59.4
INV Metal
INV
491,735,340
$0.035
$0.060
-42
$ 17.2
Jaguar Mining
JAG
85,080,567
$0.590
$0.600
-2
$ 50.2
8.29
$6.06
Kenai Resources
KAI
105,906,734
$0.040
$0.025
60
$ 4.2
0.10
$42.36
Lago Dourado
LDM
94,279,828
$0.100
$0.150
-33
$ 9.4
Lara Exploration
LRA
30,593,021
$1.230
$1.150
7
$ 37.6
Luna Gold
LGC
105,008,566
$3.250
$3.760
-14
$ 341.3
3.90
$87.51
MNM
117,223,226
$0.150
$0.170
-12
$ 17.6
2.40
$7.33
Rio Novo Gold
RN
113,670,000
$0.190
$0.230
-17
$ 21.6
2.66
$8.12
Sandstorm Gold
SSL
88,698,702
$9.620
$9.600
0
$ 853.3
1.01
$844.83
Serabi Gold
SBI
361,268,529
$0.100
$0.120
-40
$ 36.1
0.67
$53.92
TriStar Gold
TSG
57,664,803
$0.340
$0.350
-3
$ 19.6
Cleveland Mining
CDG
200,280,000
$0.225
$0.235
-4
$ 45.1
Crusader Resources
CAS
126,650,000
$0.300
$0.330
-9
$ 38.0
2.43
$15.64
Minera Gold
MIZ
466,920,000
$0.030
$0.045
-33
$ 14.0
0.10
$140.08
Paringa Resources
PNL
61,000,008
$0.180
$0.200
-10
$ 11.0
OGX
62,000,000
$0.140
$0.150
-7
$ 8.7
Gold Hills Mining
GHML
16,620,000
$2.040
Aurora Gold
ARXG
114,140,000
$0.030
$0.035
-14
$ 3.4
0.13
$26.34
Santa Fe Gold
SFEG
117,600,000
$0.260
$0.260
0
$ 30.6
EGO
714,534,000
$9.530
$10.210
-7
$ 6,809.5
25.70
$264.96
Magellan Minerals
Australia ASX
Orinoco Gold OTC
$ 33.9
NYSE Eldorado Gold
/mining.leaders
@miningleaders
BRAZIL EXPLORATION BRIEFING Vol 2 • April 2013
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