Brazilian Diamonds Limited: Agreement with BHP Billiton adds to Land Position of Cata Preta Joint Venture
Thursday May 27, 12:56 pm ET
VANCOUVER, BRITISH COLUMBIA--(CCNMatthews - May 27, 2004) - Brazilian Diamonds is pleased to announce that the Cata Preta gold project joint venture has been able to substantially increase the joint venture's land position in the important Sumidouro Dome area of the Quadrilatero Ferrifero, approximately 25 kms to the south of the Cata Preta project itself.
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Hidefield Plc, the Company's partner and operator of the joint venture, has reached an agreement with BHP Billiton Metais S.A. ("BHP Billiton") under which the Cata Preta joint venture is able to acquire gold exploration and development rights in respect of a BHP Billiton owned license totalling an area of 1,100 hectares, contiguous with other licenses which the joint venture recently acquired from local company, Senior Engenharia (see announcement 28th April, 2004). This agreement increases the Company's exploration rights in the Sumidouro Dome area to approximately 2,500 hectares.
The Sumidouro Dome project areas are located 5 kms east of Mariana and the famous "Passagem" gold mine which is reported to have had historic production of in excess of 2 million ounces of gold and also approximately 25 kms southeast of the "Cata Preta" gold project on which resource definition drilling is currently underway.
These licenses are underlain by Archean metasedimentary and metavolcanic rocks, typical of those hosting gold mineralization in the Quadrilatero Ferrifero, where numerous open cast and underground gold mines were developed from as early as the colonial period. There has been no modern gold exploration work in the project area.
The agreement with BHP Billiton provides for a two year option period during which Hidefield is required to undertake exploration and development work to the value of US$150,000. Following exercise of its option, Hidefield and the joint venture will be entitled to a renewable, 10 year lease arrangement for the extraction of gold from the license area.
Under the terms of their alliance, Hidefield will provide BHP Billiton with any technical information generated through its exploration activities which indicate the presence of iron ore on the license area. BHP Billiton will retain the right to explore and develop any iron ore discovered on the license area.
Consolidation of the Sumidouro Dome project area through the BHP Billiton alliance and the Senior Engenharia agreement continues the joint venture's strategy of targeting areas near the Cata Preta project where historic gold mining was undertaken but also where there has been little or no modern exploration. A project of initial evaluation and exploration at Sumidouro Dome will commence immediately.
Hidefield is operator of the Cata Preta project while Brazilian Diamonds holds an approximate 20% interest in the Hidefield. Under the terms of the joint venture agreement, Hidefield is earning a 50% interest in the Cata Preta project and may ultimately increase this interest to 80% through a combination of exploration activity and further share issues. |
