Cabral Gold (CBR) - Short Cut to Revenue!

Cabral Gold Inc. is a mineral exploration company focused on gold and copper. The company is listed on the Toronto Stock Exchange (TSX-V: CBR) and the OTC Markets (OTCQX: CBGZF). The company's key assets include the Cuiú Cuiú Project in Northern Brazil, the Tapajos Region, and the Bom Jardim project.

We met with Alan Carter, President, CEO, and Director of Cabral Gold. Dr. Carter is a Co-founder at Peregrine Metals and Cuprum Resources. He currently serves as a Director and Chairman at both Fremont Gold and Altamira Gold. His educational credentials include a B.Sc. degree in Geology from the University of Nottingham, U.K., and a Ph.D. degree in gold geochemistry and structural geology from the University of Southampton, U.K. He also co-founded Magellan Minerals which was acquired by Anfield Gold in 2016. 

Company Overview

Cabral Gold is a publicly-traded company focused on advancing its flagship, district-scale Cuiú Cuiú Gold Project in Brazil. The company is looking to grow its existing resource through trenching, sampling and drilling. Cabral Gold was founded in 2014 and is headquartered in Vancouver, Canada. Magellan Brazil is a subsidiary of the company. 

Cabral Gold has a district-scale exploration project in Brazil called the Cuiú Cuiú Gold Project. The company has 2 defined gold deposits 2km apart. Within an 8km radius of these deposits, they have identified 43 advanced targets with varying levels of drilling. Currently, there are 5 rigs operating on-site to carry out drilling. The company recently raised $11.5M in financing making their drill program a fully-funded operation through mid-2022. 

A Neighboring Acquisition

The company's Cuiú Cuiú Project neighbors the Tocantinzinho deposit, a 2.3Moz resource. This full-permitted deposit was sold by Eldorado Gold to G Mining for $110M. G Mining is a Canadian company with a strong track record of bringing big mines into production and is working towards developing one of the world's largest gold mines in Brazil.

The Cuiú Cuiú Gold Project was extensively mined by Placer Gold in the 1980s. The district is controlled by Cabral Gold. The close proximity to the biggest gold projects in Brazil will benefit Cabral Gold in terms of improved infrastructure, a large power grid, and improved roads. 

Drill Operations

Cabral Gold has increased their drill rigs from 3 to 5 since mid-July. These rigs are utilized towards defining the high-grade zones. The company has identified a large number of high-grade veins and targets along with more than 90 drilling step-outs above 10g/t. 

The current resource that was published in 2018 does not reflect this high-grade material. Since the last resource update, the company has carried out 20,000m drilling and plans to drill an additional 25,000m or more within the next 12 months. 

The drilling operation has led to the discovery of unconsolidated mineralized material that features gold on the surface. The company has been able to identify 2 blankets of oxide material, the first one is already under expansion. 

The first oxide blanket was part of a 74-hole grid drill program. It contains shallow holes since the blanket is 50m in thickness. Cabral Gold has received consistent high-grade results ranging from 1.g-1.5g to 50m at 3.5g. The MG Gold deposit sits right beneath this blanket. This blanket features consistency in grades across holes with a high-grade core. This core features the underlying vertical deposit sitting between intrusive rocks. 

The second oxide blanket is located 5km away. The underlying resource is yet to be defined, however, it is speculated that this blanket will have a hard rock deposit sitting below similar to the first blanket. This blanket also features a high-grade core but differs in the consistency of sand, soil, and mud. 

The Cuiú Cuiú Gold Project is a district-scale opportunity with multiple deposits. Cabral Gold anticipates that the site contains 2 additional oxide blankets. This district operation is planned to have multiple deposits feeding into a central processing facility. It features a central mill along with open pits and underground deposits, paving way for a large-scale operation. 

Scoping Study and PEA Considerations

Cabral Gold has a current supply of 1Moz and based on the exploration findings, they anticipate that the actual supply is significantly larger. They plan to grow the resource in steps before opting for a PEA (Preliminary Economic Assessment), followed by a Scoping Study once there is a significant jump in the resource. This is backed by the fact that 2Moz supply was informally recovered by Placer Gold from sand and gravel. This leads to the speculation that the hard rock source will be significantly larger. 

The data from Eldorado's project next door indicated that during the Gold Rush, each ounce of Placer Gold produced had 10oz of underlying granite. The Tocantinzinho project produced 200,000oz during this period. They have a resource of 2.3Moz at a 1:11 ratio. 

Meanwhile, Cabral Gold's project has a 2Moz supply which is 10x more gold produced than the Gold Rush. A lot of streams that contained gold were mined for Placer. Cabral Gold currently has 17.9 km² Placer tailings in the streams. Drilling operations at these streams are yet to begin as the company is currently focused on hard rock sources. 

The presence of near-surface mineralization provides Cabral Gold with the optionality to enter near-term production. The company already has trial mining licenses in these areas. They plan to carry out metallurgical work on the unconsolidated material. 

It is important to note that the cost of mining and processing unconsolidated mud, sand, and soil is significantly cheaper than hard rock. This is because hard rock granite processing requires drilling, blasting, crushing, and grinding to isolate the material. 

The unconsolidated sand at these blankets does not feature deleterious elements such as arsenic, bismuth, or antimony. The company is focused on carrying out the metallurgical work at the site and within the course of the next 6-12 months, they will process the bulk samples and decide on entering near-term production. This will be preceded by a Scoping Study. 

Potential Scale of Operations

The oxide blankets on the surface are being largely drilled with 50m holes. The drilling operations at the first blanket are nearing conclusion. It spans across an area of 22 acres and is up to 50m thick in width. The company will get a better understanding of the number of oxide blankets present within the next 12 months. This will provide a scale for the size of the operations and will be followed by a PEA. 

The company will continue to drill the higher-grade zones simultaneously at the underlying deposit. Due to the nature of the deposits, Cabral Gold won't need blasting and drilling equipment to process the material. They currently have the ownership of the land along with surface rights, mineral rights, and trial mining licenses over the 2 oxide blankets. 

Cabral Gold is anticipating that once their PEA is in place, the construction of a mine and production will pan out at a rapid pace, contrary to most gold projects that take years to enter development. The CapEx (Capital Expenditure) and the processing for this project are significantly low, which helps in further exploration within the district and at the same time, boost overall profits.

To find out more, go to the Cabral Gold Website