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The 100% owned Borborema Gold Project is located in the Seridó area of the Borborema province in north eastern Brazil. The project consists of three mining leases covering a total area of 85 km² plus freehold title to the property over the main prospect area. The Borborema Gold Project is enhanced by good on-site facilities and excellent infrastructure, such as buildings, grid power, water, sealed roads and close proximity to major cities.
In September 2011, Crusader Resources completed a positive Pre-feasibility Study (PFS) of the Borborema Gold Project in the northeast of Brazil, confirming a robustly economic project. The study evaluated a 3Mtpa open cut mining operation with a standard beneficiation circuit that produces up to 180,000¹ ounces of gold per annum.
In December 2011, Crusader updated the JORC compliant Indicated and Inferred Mineral Resource estimate at Borborema, using a 0.50g/t cut-off grade, to 68 million tonnes at 1.06g/t for 2.31 million ounces of gold. This is an increase from the previous JORC compliant resource estimate of 44Mt at 1.30g/t for 1.86Moz calculated in June 2011.
The latest Mineral Resource extends to approximately 350m below surface, a depth considered potentially realistic for open pit mining. The new Mineral Resource remains open in all directions and is only limited by drilling.
The new resource figure includes drilling up to September 2011. Since then, an additional 17,000 metres have been drilled, using five rigs operating 24 hours a day with the objective of expanding the resource further.
Results from the continued drilling will be progressively fed into further resource updates and be built into a Bankable Feasibility Study (BFS) ahead of expected development of the Borborema Project into a working gold mine. A further resource update is expected to be completed in the first half of 2012.
In addition to the current Mineral Resource estimate, an updated Exploration Target of 0.35 to 0.65Moz is also presented based on extending the mineralised envelope up to 75 m beyond the present Inferred Resource limits.
* In pit resource includes indicated resources of 17.6Mt @1.33 g/t for 750koz and inferred resources 9.4Mt @ 1.56 g/t for 475koz.
** Assumes owner operated and includes 15% contingency. Does not include sustaining capex.
***NPV and IRR calculations in table above are all calculated using a gold price of USD $1,300
¹ This is not a production forecast by the Company but an assumption used in the PFS. There remains at present insufficient certainty with respect to whether economically mineable mineralisation exists to reliably estimate future production. Further exploration and studies are required to determine this.
The Company is of the opinion that the Inferred and Indicated resources have a reasonable prospect of eventual economic extraction. Under the JORC Code, this is the level of confidence that is required to estimate a Mineral Resource as opposed to an Ore Reserve. Under the JORC Code, an Ore Reserve is the economically mineable part of an Indicated or Measured Mineral Resource, as at the date of reporting, taking into account mining, metallurgical, economic, marketing, legal, social, and governmental factors (Modifying Factors).
At this stage the Company has not yet progressed the Inferred and Indicated Resource or progressed the modifying factors sufficiently. As such, the production assumptions in the PFS should not be used as a basis for investment decisions about shares in the Company.
² The potential quantity and grade in an exploration target is conceptual in nature. There has been insufficient exploration to define a Mineral Resource and is uncertain that further exploration will result in the determination of a Mineral Resource.
Disclaimer
The information in this report that relates to Exploration Results is based on information compiled or reviewed by Mr. Robert Smakman, who is a Member of The Australasian Institute of Mining and Metallurgy and is a full-time employee of the company. Mr. Smakman has sufficient experience in the type of deposits under consideration and the activities being undertaken to qualify as a Competent Person as defined in the December 2004 Edition of the Australasian Code for reporting of Exploration Results, Mineral Resources and Ore Reserves and consents to the inclusion in the report of the matters based on his information in the form and context in which it appears. Mr. Smakman accepts responsibility for the accuracy of the statements disclosed in this report.
The information in this report that relates to Mineral Resources is based on information compiled by Mr. Lauritz Barnes and Mr. Brett Gossage who are both Members of The Australasian Institute of Mining and Metallurgy. Messrs Barnes and Gossage are both independent consultants to Crusader Resources Limited. Both Messrs Barnes and Gossage and have sufficient experience which is relevant to the style of mineralisation and type of deposit under consideration and to the activity which is being undertaken to qualify as a Competent Person as defined in the 2004 Edition of the “Australasian Code for Reporting of Exploration Results, Mineral Resources and Ore Reserves”. Messrs Barnes and Gossage consent to the inclusion in the report of the matters based on the information in the form and context in which it appears.
