Now is a good time to be restarting Mina Tucano

We are happy to be restarting Mina Tucano with our own fleet and proud to be partnering with SANY’s main franchise in Brazil, IRMEN Máquinas. Our first order will be loaded onto flatbed trucks on Tuesday and begin the 10 day journey from Belo to Mina Tucano. This delivery includes 8 x 60 tonne trucks (SKT90S), 2 x excavators (SY750H) and 1 x loader (SW978K1). A second delivery will arrive in July to double our SANY capacity.

Our strategy is different to the last 2 operators, Beadell Resources and Great Panther, who used 100% contractors.  See this link to the video on our Linkedin.

Our Trucks getting ready for delivery: 8 x 30 tonnes + 60 tonne load capacity – SKT90S

I would like to personally thank Pedro and João from IRMEN Máquinas for their support and know this is the start of a long and successful partnership together. IRMEN Máquinas are the biggest distributor of SANY fleet in Brazil and Latin America.  

We believe now is a good time to be restarting Mina Tucano with a firm gold price and world class infrastructure in place.  Our first target is to achieve 6,000 ounces a month by August and to use cashflows from these gold sales to slowly grow that to 12,000 ounces a month by mid 2025. The higher the gold price goes the faster we can grow our monthly ounces. Like some kids that are allergic to nuts, we are allergic to debt and prefer to grow with our own cashflow. It is very important to us that we bring long term employment back to this beautiful part of Amapá and run the business without debt and excessive corporate overhead.

2 x Excavators – SY750H & 1 x Loader – SW978K1

We like to start small and plan to begin feeding our modern 10,000 tonnes per day (3.5Mtpa) mill with low grade stockpiles and fresh material from our TAP AB1 pit. We have over 1 million tonnes of low grade material lying close to the mill with an estimated grade of 0.5 g/t. This material is a welcome low cost source of gold.

We estimate our cash cost of operations at 6,000 ounces a month will be less than $1,200.  This will give us the fire power to commence our Stage 2 growth plan to push back Urucum Central South from Q4’24 where 127,000 ounces are in the current pit design. We have secured the services of U&M to do the pushback work. U&M was the contractor for Great Panther and knows our operation well.

Our open pits will more than fund Stage 3 to go underground. We think the Urucum “Complex” or known by Beadell’s geos as Urucum “Deeps” is arguably the best undeveloped underground gold project in Brazil and probably one of the top 3 in the world. There are currently 13,000 ounces still in the Urucum North pit but the key to achieving 150,000 ounces a year long term is to go underground.

This project has the potential to mine 4,000-5,000 tonnes of ore a day with a recovered grade of 4 g/t (Reserve 160koz @ 4.85 g/t + Inferred Resource 748koz @ 5.17 g/t). Our modelling suggests the Urucum Complex will have a Cash Cost of around $800 per ounce which at today’s gold price could generate more cashflow in one month than our current market cap. We expect this mine plan will grow considerably as the deposit is open at depth, both to the North and to the South.

Urucum complex mine plan – the start of a 30+ year mine life

Both Beadell and Great Panther did extensive deeper drilling with great success.  Great Panther spent an estimated $40 million drilling Urucum North in 2019-21. They both knew the underground potential and regularly reported outstanding deeper holes.

Beadell also appreciated the potential to capture the iron ore that sits in this system and built what we now call the Tucano Green Iron mill.  We think this can easily be expanded to 1 million tonnes a year to produce a high grade 67-69% magnetite clean concentrate for a cash cost of only $5 a tonne grades of concentrate.

When its back up and running, we will produce the cleanest, greenest and lowest cost iron ore in the industry and it is quite reasonable to suggest this by-product could reduce our AISC by up to $200 per ounce. Our capex to restart is less than $2 million and the payback is about 3 months on current iron ore prices.

The time to restart gold mining is perfect and believe gold is like iron ore in 2003. Back then the Japanese were the biggest buyer of iron ore like the Indians have been for gold. Then China arrived and the iron ore market changed forever. The same might be happening in gold, where we think the Chinese will dramatically overtake the Indian buyers.

Mina Tucano team at our 3.5 Mtpa gold plant

We have had an excellent response so far to our 80 cent round that we launched last week. With only 52 million fully diluted shares out for Tucano Gold Inc this implies a market cap of only $C41 million which compares to the replacement cost to build Mina Tucano today of over $400 million. While that is a big number, it is not just about money. Building an operation like this takes years of exploring, permitting, planning, funding and construction.

Master Geologist Luiz “Pigoiao” Quirino & General Manager Israel Oliveira

Beadell Resources built this fine 3.5Mtpa mill in 2 stages over 6 years with the CIL plant and first ball mill commissioned in December 2012 to process oxide feed. Then in 2018 they upgraded the CIL circuit to process sulphides and added another ball mill to double capacity.  

When they arrived, they also invested in a 200 man camp and a landing strip where 63 Australian staff would fly in and fly out with Business class tickets every 45 days. We travel Economy out of respect to our shareholders, but are also superstitious that the day we turn left on the plane is the day the bull market in gold comes to an end. Tonight I am hoping for the back row on my flight to São Paulo.

Happy Easter.


Jeremy Gray | CEO

Charles Chebry | President

Edward Balme | Head of IR

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