CentroGold

The CentroGold Project is considered to be one of the largest undeveloped gold projects in Brazil and estimated by independent analysts to be worth ~$180m (reference Global Mining Research note “Growing Junior Copper Producer”).

The Project fits well into Avanco’s business model of developing low-risk-low-capex mines that capitalise on the Company’s Brazilian and Aussie “know how”. Avanco is focused on developing a  high-grade low-risk operation.  Work has centred on the Cipoeiro Deposit which is host to the higher grade Blanket and Contact Zones.

Since October 2016 when Avanco first acquired an interest in CentroGold, the Company has been making solid progress, establishing access, advancing permitting and announcing an upgraded mineral resource estimate.

The opportunity to accelerate 100% ownership of CentroGold will enable Avanco to realise the Project’s value sooner than contemplated under the original earn-in agreement. Read more about the transaction here.

Management believes that the current resources could support an open pit mining operation producing up to 100,000oz Au pa for a minimum of ten years, from as early as the second half of 2019, funded from cashflow and debt.

Geography

CentroGold is located in the state of Maranhão in northern Brazil, between the cities of Belém and São Luis and close to existing infrastructure including sealed roads, power, water and skilled labour. The nearest towns are Centro Novo do Maranhão and Chegu Tudo, with a combined population of approximately 20,000 inhabitants.

Environment

The region is lightly to moderately vegetated, with flat to lightly undulating ground and cattle farming. The climate is tropical and humid with two distinct seasons. The dry season extends from June to October and the rainy season from November to May.

The project area comprises a contiguous 140,000 hectares of tenements situated along a prospective and under-explored 75 kilometre greenstone trend.

Gold mineralisation within the CentroGold project area is considered to be typical of mesothermal vein-style or orogenic-style gold mineralisation.

At Cipoeiro, two main litho-types are recognised, a tonalite and arkosic, fine-grained arenite. The host of the primary mineralisation at the Contact Zone is a coarse, equigranular intrusive of tonalitic composition. Rocks have been significantly affected by hydrothermal alteration. Gold mineralisation is closely associated with sulphide content within zones of quartz-sericite-pyrite alteration.

Mineralisation at the Contact Zone is typically sub-vertical, with flatter lying high-grade zones hosted in rafts of sediment within the tonalite intrusion host rock. The Blanket Zone is a shallow dipping (approximately 20-30 degrees), tabular body of medium grade gold mineralisation.

In April 2017, Avanco announced an upgraded inferred and indicated JORC mineral resource for Cipoeiro of 20.2Mt at 2.0 g/t Au for 1.3Moz Au.

Grade tonnage reported above a cut-off grade of 1.0 g/t Gold.

An infill drilling program is currently underway at the Cipoeiro deposit, consisting of 34 holes for 4,395 metres at the Contact Zone and 4 holes for 725 metres at the Blanket Zone.  The purpose of the program is to upgrade existing JORC inferred resources, the majority of which are at the Contact Zone, to the indicated category.  The infill drilling program is expected to be completed before the end of 2017.

The Contact Zone appears to be higher grade than the Blanket Zone and may result in higher grade tonnes being mined earlier. This work will form the basis for both the Scoping Study and subsequent Definitive Feasibility Study.

EXPLORATION POTENTIAL

The larger CentroGold area is believed to host exceptional exploration potential.  Interpretation of a vast database of historical information, including drilling and numerous studies suggests substantial potential associated with the proximal Chega Tudo deposit and eight other known targets.

Open Pit Mine

Avanco is targeting an initial gold mining operation, comprising an open-pit mining and CIL processing plant, producing up to 100,000oz Au pa, from as early as the second half of 2019, funded from cashflow and debt.

Achieving these targets is dependent on achieving the following deliverables, namely:

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