Mineração Duas Barras Ltda. (“Duas Barras”), a producer of alluvial diamond and gold which is 55% owned by Brazil Minerals through its Brazilian subsidiary, is located on the left bank of the Jequitinhonha River in the state of Minas Gerais, Brazil, approximately 265 miles north of Belo Horizonte, the state capital. The diamond and gold processing plant at Duas Barras is accessible by dirt road which connects to asphalt highways. A major city, Montes Claros, the regional hub for northern Minas Gerais, with a population of over 400,000 people and a busy regional airport, is located within an hour and a half drive of Duas Barras. The Jequitinhonha River is a well-known area for diamond and gold production; it has hosted alluvial mining operations on all scales since the 18th century.
The Jequitinhonha River, where Mineração Duas Barras Ltda. (“Duas Barras”) is located, is a well-known area for diamond and gold production; it has hosted alluvial mining operations on all scales since the 18th century.
The Duas Barras plant was originally built by then Toronto Stock Exchange-listed Vaaldiam Resources Ltd. in 2006-2007 at a cost of approximately USD$2.5 million. To the best of the Company’s knowledge, the diamond and gold processing plant at Duas Barras is the largest such type of alluvial recovery plant in Latin America. Vaaldiam sold the plan to a local Brazilian group and subsequently a 55% ownership stake it was acquired by an affiliate of Brazil Minerals.
Duas Barras owns the mining right called “Portaria de Lavra” (mining concession), and the total area of its mining rights is 170.89 hectares or approximately 422 acres. “Portaria de Lavra” is the highest level of mining right achievable; this mining concession permits mining of alluvial diamond and gold in the property. In addition to the “Portaria de Lavra,” Duas Barras has current operating and environmental licenses issued by state authorities to operate its plant.
The Duas Barras plant is functioning at present below capacity but producing alluvial diamonds and gold. It has ten employees.
Brazil Minerals has not performed any geological studies in Mineração Duas Barras Ltda. (“Duas Barras”) but has relied on the report entitled “Technical Report Duas Barras Diamond Project, Brazil, Presenting Details of Diamond Resources Compliant with Canadian National Instrument 43-101” (henceforth “Duas Barras NI 43-101”), issued by Qualified Person and Professional Geologist Paul J. Daigle, Senior Project Geologist at Vaaldiam, on March 30th, 2007, prior to the commencement of their mining activities in the area.
The Duas Barras NI 43-101 contains on its page 9 the following table of resources:
|Mineral Resource||Volume (m3)||Diamond Grade (cts/m3)||Diamond Content (carats)||Fine Gold Grade (mg/m3)||Fine Gold Content (kg)|
The Duas Barras NI 43-101 is on file with Canada’s securities commission at www.sedar.com by searching under “Vaaldiam” and thereafter navigating to the entry entitled “Technical Report (NI 43-101)-English dated April 12, 2007.”