Equitas Resources (EQT.V) has announced it has entered into a binding agreement with Alta Floresta Gold, a private BC company, to acquire all of the outstanding shares of AFG. AFG owns approximately 60% of a Brazilian company that owns six gold properties and four production licenses in Brazil, covering a very extensive land package of almost 200,000 hectares.
One of the mineralized zones, Cajueiro, already has a NI43-101 compliant resource estimate on the property with a total resource estimate of almost half a million ounces of gold at an average grade of almost 1 g/t. This resource estimate was completed after having drilled just 48 holes on four zones, which means there still is a considerable potential to increase the resources at Cajueiro.
Additionally, as parts of the Alta Floresta project are covered by a mining license, the private operators have started to produce gold from alluvial sources on a small-scale basis. No production results have been mentioned in the press release, but we would expect the production rate to be pretty marginal and Equitas will very likely focus on the bigger picture. The best way to move forward at Alta Floresta will be to develop a mine plan and feasibility study to mine the saprolite layer.
This is a majory step forward for Equitas Resources which anticipates closing the deal before the end of February (apparently a shareholder vote is not required), and it will be interesting to see how Equitas plans to raise the C$2.5M which has been included in the agreement as one of the conditions. Upon completing the deal and assuming Equitas will be able to raise the C$2.5M at the current share price, Equitas’ market capitalization will be almost C$15M and that’s a substantial step forward.
We are going to Vancouver for both the Round-Up and the Cambridge House show next week and are looking forward to find out more about the company’s plans for 2016. If Equitas Resources plays its cards right, it could own a very interesting exploration and production-ready in Brazil.
Go to Equitas’ website
The author holds no position in Equitas Resources. We have no business connection with Equitas Resources, but Zimtu Capital is a sponsor of the website. Please read the disclaimer
