CAJUEIRO

Significant 43-101 gold resources and near-term production (2021)

in Mato Grosso and Para States, Brazil

Highlights

  • Historic placer gold production of +250,000 oz in 1980’s and 1990’s. One of largest placer camps in Alta Floresta Belt

  • Large untested land package – 28,557ha located in states of Mato Grosso and Para, Brazil

  • Existing resource with significant upside – 43-101 compliant resource totaling oxide resources of 0.85Mt @ 0.92 g/t (Indicated) + 1.67Mt @ 1.12 g/t (Inferred) for a total of 85,000oz of gold and sulphide resources of 4.81Mt @ 1.04 g/t (Indicated) + 10.99Mt @ 1.29 g/t (Inferred) for a total of 615,000oz of gold

  • Numerous untested anomalies – 14 km of drilling (105 holes) and over 4 km of trenching completed to date within 400ha central part of the 39,053ha claim package Numerous other gold-in-soil anomalies remain untested

Geology

The Cajueiro Project comprises a large land package (28,557 ha) and is located in the Alta Floresta Gold Belt, a Proterozoic calc-alkaline volcanic arc which includes medium to high-grade metamorphic crustal segments. Historic placer gold production in the belt is generally recognized to be in the range of 7-10M oz, primarily from garimpeiro activity (informal small scale miners). Historic placer production at Cajueiro is estimated to have been in the order of 250,000oz of gold making it one of the largest historic placer gold camps in the Alta Floresta belt.

Gold mineralization at Cajueiro occurs within microgranites and rhyolites and is hosted by a set of Northeast (NE) and East-West (E-W) trending conjugate shear structures exhibiting late brittle deformation. These were the primary structural controls on hydrothermal alteration and associated gold mineralization.

Gold and pyrite in the bedrock sulphide domain is contained within hydrothermal alteration envelopes within and adjacent to the structures, which may extend for tens of metres from the main mineralized structures. An alteration assemblage of sericite-epidote-chlorite-quartz readily distinguishes the prospective “green” rhyolite and microgranite from their unaltered reddish counterparts.

Gold is also present in the saprolite overlying bedrock, in the oxidized equivalent of the sulphide alteration assemblage. Prospective saprolite hosts an assemblage of sericite-chlorite-silica, with disseminated limonite and “box-works” of limonite with rare occurrences of chalcopyrite. This alteration package is clearly visible on surface in many locations throughout the property.

 

Work completed from 2016 – 2020

Since acquiring the property in April 2016, the Company has completed 25 surface trenches totaling 4,063m that has resulted the identification of two new previously unrecognized mineralized zones, one at Baldo East and the other at Toninho, comprising multiple parallel structures similar to known zones at Crente and Baldo.  In addition, the Company has drilled 49 HQ diamond drill holes totaling 3,154m.

The Baldo East target area is located approximately 500m due east of the Baldo resource and constituted an important previously untested gold-in-soil anomaly and a series of high-grade rock samples from surface which range from 3.4 to 118.4 g/t gold.

Subsequent trenching and drilling identified a series of previously unrecognized WNW-trending high-grade structures including Baldo East 1, Baldo East 2, Matrincha 1 and Matrincha 2, which individually extend up to 900m along strike. All of these structures are open along strike and at depth.

Channel samples from these trenches include;

  • 5m @ 5.31 g/t gold (incl. 1m @ 24.0 g/t gold) and 2m @ 5.03 g/t gold + 1m @ 8.82g/t gold at Matrincha (reported 17th October 2018)
  • 6m @ 30.19 g/t gold (including 1m @ 106.31 g/t gold) in trench TCBL-33 and 1m @ 18.9 g/t gold in trench TCBL-36 (reported 17th October 2018)
  • 4m @ 8.42g/t gold in Trench TCBL-38 from the Baldo East 2 zone (reported 17th October 2018)
  • 29m @ 3.03 g/t gold including 7m @ 5.42 g/t gold and 4m @ 8.07 g/t gold in trench TCBL-28 from the Baldo East 2 zone (reported 18th January 2018)
  • 10m @ 1.82 g/t gold and 7m @ 1.79 g/t goldincluding 1m @ 7.23 g/t gold from the Baldo 1 structure in trench TCBL- 29 (reported 18th January 2018)
  • Trench TCBL-20 include 6m @ 21.74g/t gold including 3m @ 43.02g/t (reported 29th August 2017)
  • Trench TCBL-25 developed immediately south of the Baldo East zone cut three parallel brecciated zones which closely resemble Baldo East. These zones returned 7m @ 5.53 g/t, 2m @ 8.30g/t and 2m @ 0.92 g/t gold (reported 1st November 2017)

Four diamond drill holes have been completed thus far at Baldo East and confirm the continuity of these high-grade zones at depth below trenches. Drill intercepts on four holes from this area include 6m @ 4.13g/t gold including 1.8m @ 6.19g/t from CJO-96, and 3.6m @ 3.06 g/t gold from CJO-97, and 1.5m @ 4.98g/t gold including 0.7m @ 9.66g/t and 0.9m @ 3.16g/t gold from CJO-104 (reported 9th February 2018).

Map showing Cajueiro project area and distribution of placer gold workings, gold-in-soil anomalies and area of current resources.  No drilling has been conducted outside of area of 2019 resource estimate. Numerous gold-in-soil anomalies remain untested

Map showing detail of Cajueiro project area with mineralized zones, drill holes and limit of 285ha area which encompasses 2019 resource estimate

Near term production

Altamira expects to start construction of a 1000t/d processing plant at the Cajuiero project during H2 2020 aimed at processing oxide resources in saprolite from the Baldo and Crente zones at Cajueiro. On 27th April 2020, the Company announced that it had secured funding for the project.

Highlights are as follows;

  • Metalstream Inc., a gold streaming company, will pay Altamira a total of US$6M, which will be used for the development of the Cajueiro gold project in Brazil, and Altamira will pay Metalstream a total of 10,000 ounces of gold over 5 years
  • Metalstream will advance an initial US$1M to Altamira on or before the completion date of 23 June 2020 (the “Completion Date”) and an additional $5 million within 60 days of the Completion Date.  Altamira’s Brazilian subsidiaries will grant Metalstream a 12.5% NSR against the Cajueiro project as security for the repayment obligations. The NSR will be extinguished following the gold repayment outlined above which will commence on the earlier of 120 days of commercial production being declared by Altamira or 36 months from the Completion Date

Detailed planning is currently in progress in advance of the start of construction.

The production decision is not based on a feasibility study of mineral reserves demonstrating economic and technical viability, and as a result there is increased uncertainty and there are multiple technical and economic risks of failure which are associated with this production decision. These risks, among others, include areas that are analyzed in more detail in a feasibility study, such as applying economic analysis to resources and reserves, more detailed metallurgy and a number of specialized studies in areas such as mining and recovery methods, market analysis, and environmental and community impacts. In accordance with NI 43-101 and the companion policy to that instrument, Altamira cannot provide any guidance either in terms of anticipated gold production or net cash flows

During 2016 the Company performed metallurgical testing on a composite sample of gold mineralized saprolite from the Baldo trenching program. Results indicated low recoveries from gravity processing and identified recoveries of up to 96.2% from Carbon In Leach (CIL) processing.

Please see the News Release dated 27th April 2020 for additional details.

 

Updated Resource Estimate

On October 10th 2019, the Company announced that it had received results of a revised resource estimate from Global Resource Engineering Ltd. of Denver for the Cajueiro gold project. The key points are as follows:-

Highlights are as follows:

  • The 2019 Inferred resources represent a 83% increase in the total amount of contained ounces of gold and a 61% increase in the gold grade over the previous resource estimate
  • Inferred resources total 12,665,000t @ 1.26 g/t gold for a total of 515,000oz of gold of which 1,673,000t @ 1.12 g/t gold (for 60,000 oz) is weathered rock and 10,992,000t @ 1.29 g/t (for 455,000oz) is fresh rock
  • The 2019 Indicated resources represent a 13.5% decrease in the total amount of contained ounces but also represent a 33% increase in grade over the previous estimate
  • Indicated resources total 5,661,000t @ 1.02 g/t gold for a total of 185,000 oz of gold of which 854,000t @ 0.92 g/t gold (for 25,000 oz) is weathered rock and 4,806,000t @ 1.04 g/t (for 160,000 oz) is fresh rock
  • The 2019 resource estimate includes several deposits which are all open at depth and are confined to an area of 285 ha

The detailed breakdown of resources by class, rock type and domain is shown below:

 

A capping analysis of the assays was performed, resulting in 5 domains being capped to values between 5 and 10 g/t gold.  Capped assay intervals were then composited to 3 meters with subsequent variography completed for each mineralization domain to determine the primary directions of mineralization and extent of grade continuity.

Gold grade was estimated into a 5m x 5m x 5m (x,y,z) block model using inverse distance squared.  The mineral resource statement is confined to a defined pit shell using the Lerchs Grossman algorithm to determine the economic limits for potential mineral extraction.

Constrained gold resources were determined using mining shapes based on a $1,500/oz gold price. Resources falling within the pits were reported above cut-off grades of 0.25 g/t Au. Recoveries were assumed to be 92% based on the metallurgical testwork completed to date. Mining costs used were US$2.00/t for fresh rock, and US$1.50/t for saprolite; with US$12.00 per tonne of ore for processing. The pit slopes selected were 45° for saprolite and 55° for fresh rock. Measured densities were 1.8g/cm3 for the weathered rock and 2.6 g/cm3 for fresh rock.

The 2019 resource estimate is based on drill and trench data from nine separate deposits, several of which are contiguous. Microgranites and rhyolites host a set of Northeast (NE) and East-West (E-W) trending conjugate shear structures / veins exhibiting late brittle deformation. These were the primary structural controllers of hydrothermal alteration and associated gold mineralization and are in general higher grade. Gold and pyrite in the bedrock sulphide domain is contained within hydrothermal alteration envelopes of sericite-epidote-chlorite-quartz within and adjacent to the structures.

Please see the full News Release dated October 10, 2019 for additional details.

 

Permitting

On October 16th, 2019 the Company announced that it had received the first Environmental Permit (LOPM No 320459) for the Trial Mining Licenses with respect to permit 866.160/2007 for the Cajueiro project. The permit is valid for three years until October 6, 2022. Please see the News Release dated October 16, 2019 for additional details.

Subsequent to receiving approval of the Frist Environmental permit above, on January 16th, 2020 the Company announced that had received the first Trial Mining License with respect to permit 866.160/2007 for the Cajueiro Project.

  • The Trial Mining license No 041/2019 follows the environmental permit LOPM No 320459 published on October 7th, 2019. The Trial Mining License now grants Altamira Gold the right to process up to 50,000 tonnes per year from the southern part of the key Crente resource area, and is valid for 36 months.
  • The first Trial Mining license also allows Altamira to commence the construction of the processing facility in the Cajueiro Project area and will open up the southern portion of the highly-prospective Crente resource for feed for the plant

Altamira is also pursuing Trial Mining Licenses over three additional claim blocks which cover the resources in the northern part of the Crente deposit as well as the Baldo, Matrincha and Marines deposits within the Cajueiro project area.