It is my pleasure to share a recording and transcript of a conversation with Dr. Alan Carter, President, CEO & Director of Cabral Gold (TSXV:CBR) concerning the company’s first-ever news release with new assay information! They are starting strong with surprising high-grade gold numbers from grab samples outside the large gold-in-soil anomaly known at the company’s flagship project called Cuiú Cuiú.
The transcript has been edited for clarity, but the full recording is provided for your reference here.
Peter Bell: Hello. This is Peter Bell. I'm on the phone with Alan Carter from Cabral Gold. Hello, Alan.
Alan Carter: Good afternoon, Peter.
Peter Bell: Wonderful to be talking to you. March 21st here, and the company had some news today.
I published an article about it soon after the news came out there. I wrote about how I thought it was a pretty stunning news release, but some people fired back right away and said "Sure, it's high grade, but it's not that high-grade. Don't get too excited, Peter." I said, "No, you didn't read the article – they found high-grade in an area with no soil anomalies." That seemed to be surprising and significant to me.
Alan Carter: It surprised us too. I was very happy that you caught that, Peter. Perhaps we didn't make enough of that in the press release, but, as you know, we have a very large gold-in-soil anomaly here. The current resource probably comprises about 5% of the anomaly. The current resource of about 1.3 million ounces, which we're updating, covers around about 5% of the existing gold-in-soil anomaly.
Peter Bell: Wow.
Alan Carter: These newer areas that we've identified in the last few weeks and that were the subject of part of the press release today are located outside the existing gold-in-soil anomaly and have very little if any geochemical response in the soils on surface. That is very interesting for us because it opens up a much larger area as being highly prospective.
It's clear that there are high grade veins exposed at Cuiú Cuiú that we didn't know about previously. We've made quite a lot of progress in terms of our understanding on the geology.
Peter Bell: One of the things that I noticed when I went back to our first interview there in November, not long after the company was listed and started trading, was something you mentioned about the magnetic lows and the hydrothermal alteration moving the magnetite out and depositing the gold. And right there on the map in the news today, we see the TZ lineament with some big magnetic lows right around where you see the high grade.
Alan Carter: It's no coincidence that we chose that map for the press release. It shows the magnetic response, which is very important because the gold mineralization at Cuiú Cuiú is associated with a lot of hydrothermal alteration caused by hot water that destroys the natural magnetite in the granitic host rocks. This magnetite destruction is a key marker for us as we frequently find gold with it, too.
Peter Bell: And it seemed like the really deep lows on that map were well outside of the soil anomaly, as well.
Alan Carter: There is a major regional structure coming through this area that is really a crustal-scale lineament and resembles the regional geology with respect to the gold deposits in Ontario or Quebec. Many gold deposits in Ontario, Quebec, and many other places around the world sit in structural splays off the main structure rather than in the main structures themselves. The deposits are typically in these second-order structures that splay off the main feature and we're seeing the same thing here at Cuiú Cuiú. We're not seeing gold deposits localized within the main regional lineament. The existing gold deposits we have at Cuiú and the new showings are on these smaller features that seem to come off the main lineament.
Peter Bell: And 264 grams per tonne at Germano. Is that one of the higher samples ever found at Cuiú Cuiú? It certainly must be the highest yet for Cabral.
Alan Carter: That was found in an area that has never been drilled before. Of the five or six showings mentioned in the press release, only one of those is in an area that has had prior drilling.
Germano is certainly one of the higher grade samples that we've found, but it's actually not that unusual. Vila Rica, which is another new prospect that we've found, also has very good numbers on it, up to 80 grams per tonne so far.
One of the special things about Cuiú Cuiú is that it has all of these high-grade vein showings, most of which we have not tested previously. The one that we're most excited about, which may not have come through in the release, is the Morro da Lua showing. We don't have the sample results back yet, but we did include a couple of examples of gold mineralization with a lot of visible gold in samples from there. We don't have those numbers back, but I'm hopeful that those samples will also have high grades.
Peter Bell: Lots of questions for you on that, Alan! In passing, I thought that those specimens at Morro da Lua looked like rocks from Nevada.
Alan Carter: Some of the gold deposits in Nevada are extremely high-grade. You're probably thinking about deposits like Sleeper. Some areas in the Sleeper Mine had thousands of grams per tonne, spectacular sort of museum-quality samples. The deposits in Brazil are a lot older than they are in Nevada, but certainly there's a lot of high grade gold at Cuiú Cuiú that we're finding in new areas.
Peter Bell: And to clarify about the garimperos that are mining here -- were they going after high-grade like in Nevada?
Alan Carter: No. During the gold rush of the 1970s, 1980s, and early 1990s, the garimperos were mining gold from the streams. That type of gold is very easy to recover and is pretty cheap to do as you’re basically sluicing gold from sand and gravel. Of course, the sand and gravel is a very limited resource. We have some large streams at Cuiú Cuiú, but they're pretty narrow and the garimperos were basically restricted to taking the gold from the sand and gravel. However, there are a few who are now starting to look for high-grade veins that are weathered on surface and that's definitely assisting us with our exploration effort. They have certainly found a number of new areas and are assisting in directing our exploration efforts.
Peter Bell: And how about these samples from Morro da Lua shown in the news release –did you send those off for assay?
Alan Carter: Yes, we did.
Peter Bell: Okay. I know sometimes it can be difficult to send off a flashy piece like that. You may want to save it for the conferences or something.
Alan Carter: Not all samples look like that, Peter, but there are some very high-grade veins in the Morro da Lua area. I think so far we've mapped three or four new vein structures up there that we never knew existed before this. Obviously, there's been no drilling there because we didn't know about them until a couple of months ago.
Peter Bell: I am looking at a map in the presentation with locations of the high-grade samples and the drill holes that makes it clear: Morra da Lua is off on its own up there to the north.
Alan Carter: Yes, it is. If you look very closely at the magnetics map, then you can see an east-west trending magnetic feature right where Morra da Lua is located. There is also one present at Vila Rica and Germano, as well. These are evidence of these second-order, east-west trending structures we discussed before. Of course, the east-west control is very important at Cuiú Cuiú because the Moreira Gomes deposit, which is a deposit at Cuiú Cuiú that is known to contain approximately 700,000 ounces, is located several kilometers to the south on another one of these east-west trending structures. We actually think there's a series of east-west trending structures in this part of the project area that control the location of many of these high-grade vein structures.
Peter Bell: Moreira Gomes is pretty impressive – 700,000 ounces inferred is a substantial amount.
Alan Carter: And the obvious question is: could any of these areas around these new showings be of a similar size? To be quite honest, I'd be happy if they were smaller in size but higher grade. For now, we're just getting started here.
As you know, Peter, we restarted the program here in January of this year, following our RTO in October. This will be an ongoing program and I expect it will bring up all sorts of other new and interesting showings, but what it's telling us is that we've got new and exciting drill targets. I think the real challenge for us when we start planning our drilling later on this year, probably around June, will be to decide exactly which targets we're going to drill. That will be something we'll have to look at very closely because, right now, I can see an awful lot of compelling drill targets.
Peter Bell: A good problem to have.
Alan Carter: Yes, it is.
Peter Bell: And Germano again – the release notes that you don't really have a sense of where it may be going yet. I will be interested to see if that high grade is kind of contained in these broader east-west splays off the bigger lineament there, or if it is some subsidiary geological structures in some way.
Alan Carter: As you noted from the press release, that sample was a grab sample that was taken from some coarse vein material we found immediately adjacent to the Germano working. We are cleaning up the Germano working right now because there is a lot of soil cover and it's full of water. We are pumping that out and we'd like to clean the area up so that we can start measuring the vein to get some decent samples from the showing itself. We do know that it sits in one of these east-west trending lows and there is high-grade material associated with the mineralization there. The question will be: how extensive is that Germano area? We won't know that until we get additional auger sampling, additional trench sampling, and then ultimately drill it.
Peter Bell: We’ve talked before about the trenching and how the improved access at the Cuiú Cuiú helped you guys do a lot more trenching there, but the auger drilling is something new for me.
Alan Carter: We found that the soil cover is just too deep for trenching in some areas. The maximum depth we can get down with the trenching is probably about seven or eight meters and even that requires us to dig benches down because we want it to be safe for our people. Beyond that, it just becomes too expensive. In areas where the cover is deeper than seven or eight meters, we use the auger drill, which is an effective tool. It doesn't give you the continuous exposure of a trench, but it does allow you to get ten, 12, or 15 meters of penetration. And that is providing some very good information too.
There's quite a lot of work going on in other areas of Cuiú Cuiú that's not mentioned in the press release. There will be a lot of news coming out.
The other thing I think I'd like to draw your attention to is the Vila Rica target, where we've got a sample there that was running 80 grams with a channel sample that had half-a-meter at 43 grams per tonne gold. That looks like a narrow-veined structure, but it doesn't need to be very wide if it has grades like that. The interesting thing about that one, Vila Rica, is that it’s located about a kilometer east of the Jerimum showing! We have a few drill holes into the Jerimum target and have some very high-grade values there.
There's a possibility that Jerimum de Cima and Vila Rica may be located on the same east-west trending magnetic lineament. It could be that Vila Rica is the eastern extension from Jerimum de Cima. We've got an awful lot of trenching, auger work, and drilling to test that but it is suspicious because they are virtually east-west.
Peter Bell: And would you be able to really test that idea with trenching and auger drilling before getting into core drilling?
Alan Carter: Right now, it’s just a hypothesis – I want to stress that – but if we're able to get auger samples which suggest there is a continuous gold-bearing zone extending between Vila Rica and Jerimum de Cima then that would be a step in the right direction. A series of trench samples could help show that, as well.
Peter Bell: Amazing that all this stuff comes to so near-surface. The fact that you can even start to test an idea like that with relatively shallow work is just great.
Alan Carter: It's like starting with a giant, thousand-piece jigsaw puzzle where all the pieces are turned upside down so you can't actually see what's on the pieces. From time to time, we're able to turn over a few of the pieces by doing the auger work or the trenching or other sampling work we're doing. Gradually, we're starting to form a picture here. We still need to turn over a lot of pieces, but I think we'll get more of a complete picture of the scope and scale of the gold deposits at Cuiú Cuiú as the work advances.
Peter Bell: And five meters at over 3 grams per tonne at Jerimum de Cima is a good piece to turn over! That was a pretty impressive number compared with the average grade at Central, for example.
Alan Carter: It's not bonanza grade, but we certainly have bonanza grades in other parts of Jerimum. Don't forget that we've drilled a few holes there – I think our best drill hole at Jerimum had approximately 39 meters of 5 grams per tonne gold, which included a two-meter section at two or three ounces per tonne. I don't remember the exact values, but there's certainly some very high-grade numbers at Jerimum de Cima.
The significance about the sampling at Jerimum de Cima was less in the actual gold value itself, but more in the fact that we now have a very high degree of confidence that we're dealing with an east-west control at Jerimum de Cima. Before we started the trenching program, we weren't certain about the strike orientation of the veins at Jerimum de Cima but we're now very confident that there's a series of east-west trending structures. Jerimum de Cima, as you may recall, is one of the best soil anomalies in the whole project area. It was also the area where the streams were richest. However, we have no resource identified at Jerimum de Cima as yet. It's taken us awhile to actually determine the structural controls on the mineralization, but we now have a very good grip on that and I'm hopeful that the drilling we do at Jerimum de Cima will be successful as we will be more confident about where the mineralized structures are located.
Peter Bell: The potential to expand Jerimum off to the west is great, too. I was keen to read that it was open to the west because you start to get into some of the big drainages where the garimperos were active not far to the west – maybe a kilometer or so over by the Central deposit.
Alan Carter: Yes, Jerimum could extend significantly to the west. Central is not actually that far, it's only about two-and-a-half kilometers off to the west. There may be additional mineralization at Jerimum de Cima to the west.
Jerimum is open to the east and west and, as I said, Vila Rica could be part of the same system. Quite a lot of work to do, Peter, but we are advancing. I think these results are a significant step in the right direction, and confirm our belief that there is an awful lot more gold yet to be discovered at Cuiú Cuiú.
We'll just keep turning over those pieces of the jigsaw puzzle and, at some point, we're going to be able to form a complete picture here.
Peter Bell: And it's pretty far out there at this point, but I hope against hope for a structural intersection between Central and Jerimum!
Alan Carter: Well, there certainly are two types of mineralized structures at Cuiú Cuiú. There are ones that trend northwest-southeast, which are parallel to that big regional structure I talked about earlier, and then there are east-west trending structures. You could potentially get some very high-grade mineralization in areas where they intersect. We'll just have to wait and see.
Peter Bell: Is there any precedent for a discovery of that kind “structural intersection” in this area of Brazil?
Alan Carter: There are certainly other gold deposits that have been discovered in this part of Brazil. The most notable one is probably Eldorado Gold's project, which sits about 20 kilometers to the southeast of ours. They have about two million ounces there, but Eldorado doesn't have quite such a large mineralized area. They have quite a nice gold-in-soil anomaly, but it's much smaller than what we have here. And, to my knowledge, they don't have any high-grade gold veins sticking out of the ground like we do at Cuiú Cuiú, which is probably the reason that there was a lot less placer gold mining in their area than at Cuiú Cuiú. That is really the nearest gold deposit to us of any note.
There are other gold deposits in the belt and they are also structurally-controlled. Again, what we have is similar to what is seen in Ontario and Quebec. The rocks there are a little bit older than these rocks in Brazil, but they're similar. They’re also similar to rocks in western Australia. As such, I think there's a lot more to be done in this part of Brazil. For a long time, access was difficult here but that is changing very quickly now. There are new roads being paved here and things are changing very quickly in terms of infrastructure.
The interesting thing about this region is that there was 20-30 million ounces of gold mined here from the streams. Most of that gold has not been tracked to source yet. We've certainly found some of the sources at Cuiú Cuiú, but we haven't tracked most of the placer gold back to source. As you know, Cuiú Cuiú was the largest garimpo in the whole region. There has to be at least one very large gold deposit somewhere in this belt, in my opinion. It's unusual that there isn't one identified yet, given the amount of placer gold that came out of the area.
If you look at gold districts around the planet, they've generally got one or two – sometimes more – very large gold deposits. One hasn't been discovered yet in the Tapajos and that's what we're chasing here, Peter. We're starting with the area that produced more placer gold than anywhere else in the region because we believe that area has the best potential for finding a much larger, concealed hard rock deposit.
Peter Bell: Wonderful. And I think back to our interview in November when you said that the placer workers stuck to the streams – I can just imagine a line tracing through Jerimum and over towards Central, crossing that stream with all the placer mining.
Alan Carter: If you look at our presentation on our website, then you can see that there were an awful lot of areas where was gold mined from the streams. Page 11 of our presentation on the website outlines all the streams that were mined for gold and the deposits that we’ve found so far. We haven't found the source for most of the streams that were mined for placer gold mineralization. We will find them, but it will take time. It's all pretty exciting.
Peter Bell: Yes, thank you. That map on page 11 is quite helpful. I see the old drill holes up there around Jerimum and everything – great. What led you guys to be out searching for rock chips in these areas where you reported them today?
Alan Carter: As I mentioned, there are a few miners still mining on the property. We don't have hundreds of people or anything like that, but there are some and we have a very good relationship with them. They're very good prospectors. Since we have a close relationship with these guys, we're quite happy for them to take a little bit of the oxidized material on the surface that they can process very easily because it assists us with our exploration efforts. We like to know what they're up to because they're good prospectors. It's just another way we approaches our exploration. The more indications you have from various channels – whether they are soil geochemistry, channel sampling, drilling, geophysics, topography, garimpero workings, or the occurrence of placer gold –the better your targeting.
Peter Bell: And the higher the quality of the work done as well, right? Because, ultimately, it becomes very important what work was done, who did it, how well it was documented, and all that stuff in a potential takeover scenario as you well know.
Alan Carter: I think Cabral's a ways from that yet, Peter. What we need to do is grow the existing resources that we have, run down the source of all of the gold in the streams that we haven't identified yet, and demonstrate that this will be a significantly larger project than it is currently. I think we took a very important step in that direction today.
Peter Bell: Certainly. And Pau de Merenda and Machichie – news coming from those soon!
Alan Carter: Yes, those are two areas we've been actively trenching. As you know, I'm very excited about Pau de Merenda. I think it could form part of the Central deposit – actually a northwestern extension. If so, then it will extend the deposit potentially by another one-and-a-half kilometers but we have more trenching to do before we know that. We have a bit of drilling at Pau de Merenda that was done previously and returned good results, but we haven't tested the area between it and Central. Again, as at Jerimum de Cima, we've had a very poor idea of what the structural controls are on that particular target. The trenching and auger work we're doing at Pau de Merenda right now is definitely helping us in that regard.
Machichie is another very interesting area. We've only ever put a couple of holes into it, one of which cut 3.3 meters at seven-and-a-half grams. We never followed that up. That area is only a few hundred meters to the north of the Moreira Gomes deposit and it looks like it is another one of these potentially east-west trending structures. There's certainly a lot more gold in the Machichie area than I had anticipated a couple of months ago. We have a lot of sample results pending at Machichie and expect results from that area as well, in the near future.
Peter Bell: Wonderful. Thank you very much, Alan.
Alan Carter: Thanks, Peter.
Please note that Peter "@Newton" Bell was not compensated to prepare and distribute these documents. Peter Bell owns shares of Cabral Gold and may buy or sell at any time without notice.
These documents contain statements that are forward looking statements and are subject to various risks and uncertainties concerning the specific factors disclosed under the heading “Risk Factors” and elsewhere in the Company’s periodic filings with Canadian securities regulators. Such information contained herein represents management’s best judgment as of the date hereof based on information currently available. The Company does not assume the obligation to update any forward-looking statement.
