BEADELL's Tucano gold mine, Brazil.

BEADELL's Tucano gold mine, Brazil.

Beadell Nears First Gold from Tucano

Issue 22, November 2012

Gold explorer Beadell Resources is due to announce its first gold pour in the next three weeks, following commissioning of its ore processing plant at its Tucano operations in Brazil.

The news marks Beadell’s rapid emergence as a gold producer, listed in 2007 for A$15m. The company is now valued at A$711m ($737m). Tucano is expected to produce 180,000 ounces of gold in 2013 and will turn the company cash flow positive before January.

Commissioning at Tucano also follows a string of exceptionally high grade drill results from the project, which hosts five open-pit gold deposits, all open at depth. Earlier this month, Beadell announced a 93,000 ounce gold resource at its Duckhead deposit, grading 30.9 grams per tonne.

“Its just unbelievable that you can get a resource like that coming to the surface within a few kilometers of a gold plant that hasn’t yet been mined,” company co-founder Greg Barrett told Global Mining Observer. “Its almost unheard of.”

Tucano has a total resource of 4.6m gold ounces, with a further 228,000 on stockpile waiting to be milled. Beadell bought the project in 2010 for $63m from Toronto-listed New Gold, which failed to make it viable because of low heap leach recovery rates.

Beadell has invested $100m in a mill capable of processing the project’s ore, delivered under budget despite steep inflation in Brazil and the wider mining industry. It has also added 1.7m gold ounces to Tucano’s resource, where drilling is ongoing.

“We like Brazil,” Barrett says. “The government has been extremely positive in doing all they can to ensure that we get mining as soon as possible.”

Beadell’s success in the country is in stark contrast to that of Anglo American, which last week confirmed cost overruns of $2bn at its Minas-Rio project. Anglo’s Amapa iron ore facilities abut Tucano and will lower costs at the project to $400 per ounce by allowing Beadell to sell iron ore byproduct that it would otherwise discard as waste.

Amapa, a rare bright spot for Anglo American to date, is reported by Reuters to be under offer from Glencore. A spokesman for Anglo confirmed that reports were in line with the company’s strategy of discarding non-core assets. London-listed Anglo Pacific holds a 1 per cent royalty over the deposit.

“The government has been extremely positive.”
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