(TheNewswire)
July 5 th , 2023 – TheNewswire- Vancouver, British Columbia – South AtlanticGold Inc. (TSXV:SAO) (“ SouthAtlantic ” or the “ Company ”) ispleased to announce that it has manifested and granted priorityhearing under the Judicial Reorganization Process (“ Processode Recuperação Judicial ”) of Mina TucanoLtda., Beadell (Brazil) Pty Ltd., and Beadell (Brazil 2) Pty Ltd.,with the objective to investigate and potentially negotiate theacquisition of the Tucano Gold Mine (“ Tucano ”), being theonly exchange listed company to have officially filed interest intothe Processo de Recuperação Judicial.
Tucano Gold Mine Highlights:
-
Located in the state of Amapá, Brazil, Tucano ishosted on a ~197,285-hectare land package in the prospective Vila NovaGreenstone Belt of the Guyana Shield
-
Initially brought into production in 2005 as aconventional open pit and heap leach operation
-
The operation was expanded in 2013, including theconstruction of 3.5 Mtpa CIL processing facility.
-
The mine produced an average of ~130 koz Au per annumfrom 2014-2020 at an average AISC of US$1,100/oz
-
Produced ~120 koz Au during each of 2018, 2019 and2020
-
Produced ~80 koz Au and ~60 koz Au in 2021 and 2022,respectively
-
Over 1 Moz Au produced to date
-
-
The mine was purchased by Great Panther Mining Limited( Great Panther ”) in mid-2019
-
Substantial work completed to date, including ~22,000 mof drilling by Great Panther from 2020 to 2022
-
-
Most recent publicly available technical report (asdefined in National Instrument 43-101 -Standards of Disclosure forMineral Projects) filed on SEDAR by Great Panther on June 8, 2022 andhaving an effective date of July 31, 2021 outlined:
-
Proven and Probable Reserves: 12.8 Mt at 1.59 g/t Aufor 656 koz Au
-
Measured and Indicated Resources (Inclusive ofReserves): 28.4 Mt at 1.43 g/t Au for 1,303 koz Au
-
Inferred Resources: 6.8 Mt at 2.37 g/t Au for 518 kozAu
-
-
All required exploration and mining permits are inplace
-
All required nearby and onsite key infrastructure(roads, power, mine supply, plant, tailings facility) are inplace
-
Operated through a wholly owned Brazilian subsidiarythat subsequently entered the Processo de Recuperação Judicial inSeptember 2022. The Tucano mine was placed on care and maintenance inFebruary 2023 due to (i) unanticipated mine resequencing caused by pitwall instability, leading to the mining and processing of satellitepits and low grade stockpiles, resulting in higher stripping costs,and lower grades and recoveries; (ii) various other operational issuesincluding but not limited to accelerated capital spending on thetailings facility, accelerated spending on the advancement of theunderground project, contractor and equipment availability during thepandemic, and inflationary pressures; and (iii) ability to servicecorporate and local debt and creditors
-
Assuming that South Atlantic is successful in itspotential acquisition of Tucano, the Company plans to keep operationson care and maintenance for a period of approximately 2-3 years inorder to update and expand open pit mineral resources and complete an updated feasibility study on the open pit mine– to ensure successful operations on a restart of mining
Douglas Meirelles, President and CEOof South Atlantic, stated: “South Atlantic is excited about the opportunity to participate inthis unique process, especially given the successful track record ofour Company’s leadership team on similar turnaround projects inBrazil, including the Aurizona Mine operated by Equinox Gold Corp andthe Mara Rosa Gold Project recently acquired by Hochschild MiningPLC 2 .
We believe that Tucano is a strongcandidate for a district scale open pit operation, with undergroundpotential to be explored once the mine is recommissioned. SouthAtlantic is well positioned to deliver on Tucano’s substantial nearand long-term resource growth potential and to enhance previousoptimization initiatives.”
Marc Leduc, Chairman of SouthAtlantic’s Technical Committee, stated: “Tucano represents a great opportunityfor South Atlantic to expand its footprint in Brazil, with the goal ofrestarting gold mining as a new gold producer in a favourablebrownfield camp. The Technical Committee of South Atlantic has themandate to establish the best sustainable plan to move forward withthe required steps with the ultimate potential goal of returning theTucano mine to production.”
Pursuant to the terms of the of the Processo deRecuperação Judicial, South Atlantic has filed and has been acceptedwith priority to evaluate and potentially negotiate with the creditorsof Tucano a restructuring of the outstanding debt of Tucano. Inaccordance with the terms of the process, South Atlantic has the rightto terminate negotiations at any time should negotiations with thecreditors of Tucano fail to advance or if the Company is notsatisfied, in its sole discretion, with the results of itsnegotiations or its review due diligence of Tucano. There can be noassurances that a transaction involving South Atlantic and Tucano willbe consummated.
Over the coming weeks, South Atlantic, in consultationwith advisors and qualified persons, plans to advance itsinvestigation and potentially advance with the proceedings of thelegal process in Brazil, including potential negotiations with thecreditors of Tucano. This timeline is indicative and may change or bedelayed as determined by legal process.
Advisor
The Company has appointed Haywood Securities Inc. asits exclusive financial advisor in connection with the potentialacquisition.
Qualified Person’s Statement
The scientific and technical information that forms thebasis for parts of this news release was reviewed and approved byMarcelo Antonio Batelochi (P.Geo.), MAUSIMM (CP), the Company’sExploration Manager who is a Qualified Person as defined by NI43-101.
About South Atlantic Gold
South Atlantic Gold is an exploration company engagedin acquiring and advancing mineral properties located in the Americas.Our flagship asset is the 100%-owned Pedra Branca project, located 280km southwest of Fortaleza, Ceará State, Brazil. South Atlantic Goldis focused on creating value for its shareholders by engaging in thedevelopment and acquisition of high-quality mineral assets located in stable and mining-friendlyjurisdictions. South Atlantic Gold is based in Kelowna, BritishColumbia, and is listed on the TSX-V under the symbol“SAO”.
ON BEHALF OF THE BOARD
Douglas Meirelles, President and CEO
For more information regarding thisnews release, please contact:
Douglas Meirelles, President and CEO
T: 250-762-5777
Email: ir@southatlanticgold.com
Cautionary NoteRegarding Forward-Looking Information
This news release containsstatements that constitute “forward-looking Information”, as suchterm is used in applicable Canadian securities laws. Suchforward-looking information involves known and unknown risks,uncertainties and other factors that may cause the Company’s actualresults, performance or achievements, or developments in the industryto differ materially from the anticipated results, performance orachievements expressed or implied by such forward-looking information.Forward-looking information includes statements that are nothistorical facts and are generally, but not always, identified by thewords “expects,” “plans,” “anticipates,” “believes,”“intends,” “estimates,” “projects,” “potential” andsimilar expressions, or that events or conditions “will,”“would,” “may,” “could” or “should” occur.
Although the Company believes theforward-looking information contained in this news release isreasonable based on information available on the date hereof, by itsnature forward-looking information involves assumptions and known andunknown risks, uncertainties and other factors which may cause ouractual results, level of activity, performance or achievements, orother future events, to be materially different from any futureresults, performance or achievements expressed or implied by suchforward-looking information. There can be no assurance that theFundamental Acquisition will be completed as proposed or atall.
Examples of such assumptions, risksand uncertainties include, without limitation, assumptions, risks anduncertainties associated with general economic conditions;; adverseindustry events; the receipt of required regulatory approvals and thetiming of such approvals; that the Company maintains goodrelationships with the communities in which it operates or proposes tooperate, future legislative and regulatory developments in the miningsector; the Company’s ability to access sufficient capital frominternal and external sources, and/or inability to access sufficientcapital on favorable terms; mining industry and markets in Canada andgenerally; the ability of the Company to implement its businessstrategies; competition; the risk that any of the assumptions provenot to be valid or reliable, which could result in delays, orcessation in planned work, risks associated with the interpretation ofdata, the geology, grade and continuity of mineral deposits, thepossibility that results will not be consistent with the Company’sexpectations, as well as other assumptions risks and uncertaintiesapplicable to mineral exploration and development activities and tothe Company, including as set forth in the Company’s publicdisclosure documents filed on the SEDAR website atwww.sedar.com.
THEFORWARD-LOOKING INFORMATION CONTAINED IN THIS NEWS RELEASE REPRESENTSTHE EXPECTATIONS OF THE COMPANY AS OF THE DATE OF THIS NEWS RELEASEAND, ACCORDINGLY, IS SUBJECT TO CHANGE AFTER SUCH DATE. READERSSHOULD NOT PLACE UNDUE IMPORTANCE ON FORWARD-LOOKING INFORMATION ANDSHOULD NOT RELY UPON THIS INFORMATION AS OF ANY OTHER DATE. WHILE THECOMPANY MAY ELECT TO, IT DOES NOT UNDERTAKE TO UPDATE THIS INFORMATIONAT ANY PARTICULAR TIME EXCEPT AS REQUIRED IN ACCORDANCE WITHAPPLICABLE LAWS. Neither theTSX Venture Exchange nor its Regulation Services Provider (as thatterm is defined in the policies of the TSX Venture Exchange) acceptsresponsibility for the adequacy or accuracy of this release.
______________________________________________________________________________
1 Pleaserefer to Great Panther’s technical report entitled “TECHNICALREPORT ON THE 2021 MINERAL RESERVES AND MINERAL RESOURCES OF THETUCANO GOLD MINE, AMAP Á STATE, BRAZIL”, dated June 7, 2022 with an effective date of July31, 2021, and available on Great Panther’s profile onwww.sedar.com
2 This newsrelease contains information about properties on which South Atlantichas no right to explore or mine. Readers are cautioned that mineraldeposits on properties are not indicative of mineral deposits on theCompany’s properties.
Copyright (c) 2023 TheNewswire - All rights reserved.