Mina Tucano with Great Potential for the Future
| FVM560 was one of the last holes drilled in August 2016 in the high-grade Duckhead mine, 60 meters below the current open pit floor. |
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| Duckhead Mineralization Below the Pit |
| It’s rare to find these high-grade deposits with 1-2 ounces per ton, and although we have over 2,000 square kilometers of highly prospective Guiana Shield properties in our vicinity, the first place we should start looking is below the pit. We’ve attached some of the old ASX releases to illustrate why Duckhead was the highest-grade gold mine at that time and why we believe it offers so much potential for the future of Tucano Gold. |
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| Here you can find the full press release from Beadell from April 11, 2014 |
| FVM351, which intersected 31 m at 491 g/t, is certainly one of the better drill holes in the industry and was about 80 m above FVM560 before it was mined in 2016. What’s really important is that Duckhead is not a nuggety mine, which typically leads to eye-catching drill holes producing exaggerated results. Beadell wrote: Although the mineralization at Duckhead is extremely high-grade, it is not a nuggety ore body, and in general, the extremely high grades have been consistently confirmed in mining and mill reconciliations. The result of 14,018.6 g/t (1.4%) Gold in FVM351 was repeated in a certified external laboratory with 17,025.6 g/t (1.7%) gold, further emphasizing the significance of this result. Furthermore, the additional 30 m of the intersection without the 14,018.6 g/t gold result averaged 39.9 g/t gold. |
| The image below shows you where Duckhead is located among our 8 open pits and 12 km from our world-class 3.5 Mtpa mill. |
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| The 14 km Long Gold System of Mina Tucano |
| As soon as gold production resumes, we will prepare a 5,000-meter drilling program at Duckhead. This is long overdue, and we want to build on the excellent work done by Beadell. |
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| We take our hats off to the early management team of Beadell Resources. They were the risk-takers among the various owners of Mina Tucano when they invested over $300 million between 2012 and 19 to build a world-class 3.5 Mtpa mill. Unfortunately, their timing wasn’t particularly good, as production began in 2013 just as the gold market entered a long and painful bear market. We are in an excellent position to benefit from this new bull market in gold with all of Beadell’s amazing infrastructure. |
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| Here you can find the full press release from Beadell from April 30, 2013 |
| The great achievement of Great Panther in acquiring Beadell was the completion of the program with 474 diamond drill holes in our Urucum underground complex. Both operators spent over $40 million to define an underground reserve of 166 koz @ 4.85 g/t and an underground resource of 748 koz @ 5.17 g/t. |
| This calculation was based on a gold price of $1,650 and only tested 5% of the strike potential that extends over 14 km back to Duckhead. The deepest hole drilled was 621 meters, and the mineralization is open at depth both to the north and south. At Duckhead, only a fraction of the holes were drilled, and these were all very shallow. Check out this short video on LinkedIn to get an idea of the size of our operation. |
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| Investor Trip with Mr. Davi and His Team in Our World-Class Laboratory |
| If you’re looking for a comparison for our C$35 million pre-money valuation of Tucano Gold – Eike Batista sold Mina Tucano in 2006 for nearly $300 million to Goldcorp when it was still a simple heap leach operation. Then Beadell Resources and Great Panther spent over $400 million between 2012 and 22 to build our 3.5 Mtpa mill, a world-class laboratory, accommodations for 200 employees, and our own airport. That’s the beauty of buying large facilities like this very cheaply because it gives new investors the opportunity to enter at a low valuation. |
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| Duckhead Open Pit September 2016 – Last Month of Mining at 59 g/t |
| We believe that our acquisition of Mina Tucano is possibly the best in the industry since K92’s purchase of the Kainantu Gold Mine in 2014. We financed the majority of K92 when the company was still private, and we believe that Mina Tucano shows many similarities in terms of resources and grade potential. The only major difference is that our pre-acquisition valuation of C$35 million compares to the current market value of C$1.9 billion. |
| Our 80-cent round also compares favorably to $15-18 to cover the costs of building our mill, and an estimated potential capital value of $34 per share, assuming gold trades at $2,200 in the medium term and $1,800 in the long term. |
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| Here you can find the full press release from Beadell dated January 8, 2015 |
| Tucano Gold has a very exciting future with the potential to reach more than 150,000 ounces as production ramps up and world-class deposits like Duckhead get another chance to shine in a rising gold market. |
| Best regards, |
| Jeremy Gray | CEOJeremy.Gray@TucanoGold.comCharles Chebry | PresidentCharles.Chebry@TucanoGold.comEdward Balme | Head of IR Edward.Balme@TucanoGold.com |
