Crusader Resources dips on Juruena gold drilling update (CAS)

By James Moore


Crusader Resources (LSE:CAS) dropped 10.2pc to 2.2p today after updating investors on drilling progress made at three new prospects based on its prospective Juruena project in Brazil.

The business has been carrying out an exploration programme at Juruena since January this year with the hope of defining a substantial resource and economic reserve. Juruena, based in the highly prospective Alta Floresta belt, has a JORC mineral resource estimate of 261koz gold over three key prospects.

Today, the business reported significant gold intercepts at three new targets identified in line with the primary trend in Juruena called Daniel, Izau III, and Panelas, as well as several smaller intercepts. A chart containing details of these intercepts can be found here.

Marcus Engelbrecht, Managing Director of Crusader Resources, said: ‘I am delighted to be able to provide an update on the recent drilling campaign at Juruena, where we have generated positive results from three new prospects. Juruena is a very exciting project, located within the highly prospective Alta Floresta belt that is generating significant interest from major mining companies. We look forward to updating shareholders on further progress at Juruena as the project develops.’

When we spoke to Engelbrecht last month, he told us that Juruena could eventually turn out to be a ‘jewel in the crown’ for Crusader, telling us:

‘What is exciting for me is that every metre we drill has gold in it. We need to do some more drilling. In theory, we could go and right now put a cheap and dirty little underground operation there and probably pull out 20,000-30,000oz a year for a few years. But if we do that, we will contaminate the site, and it will be tough for us to focus on defining a major reserve. Dependant on our next raise, I am keen to get out there and do some drilling. There has been some interest from other companies to come in and look at this as well. We are open to other companies looking at it, and we will discuss those as they come.

The site sits alongside Borborema, Crusader’s most developed asset. Borborema is an operationally de-risked gold project in North-Eastern Brazil that has a JORC reserve of 1.61Moz gold at 1.18g/t and a 2.43Moz mineral resource estimate. The site has an overall NPV of $117.8m, with an internal rate of return of 31pc, based on all-in sustaining costs of $908/oz and a $1,300oz gold price. Borborema is currently in the pre-development stage but has been operationally de-risked through the completion of a pre-feasibility study and the approval of an environmental impact assessment.

Crusader is currently using part of the cash raised in its IPO to fund the completion of a bankable feasibility study (BFS) for the site by the end of this year. The BFS will include metallurgical testing and plant and mine optimisation and is being carried out for Borborema’s open pit, which is designed to produce 70,000oz gold per annum for up to 10 years. By Q3 2018, it also expects to have secured an installation licence that will be required to get Borborema to a decision-to-mine stage. Once Crusader has completed the BFS and got all of the relevant permits, it will focus on getting funding for a 2Mtpa capacity processing plant, which is expected to cost around $93.4m to build, taking between 12-18 months

Given that Borborema is still on track to be a consistent producer come year end, today’s weakness could provide an opportunity to buy Crusader if you are won over by Engelbrecht’s excitement for Juruena.


Author: Daniel Flynn

Disclosure: The author does not own shares in the company mentioned in this article


Author: James Moore

This article does not provide any financial advice and is not a recommendation to deal in any securities or product. Investments may fall in value and an investor may lose some or all of their investment. Past performance is not an indicator of future performance.

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