Name: Andorinhas mine.

Location: The Andorinhas mine is a mineral exploration and development project located in Pará state, in northern central Brazil.

Controlling Company: The Andorinhas mine is wholly owned and operated by Reinarda Mineração, a Brazilian company that is 100% owned by Troy Resources (Holdings), a British Virgin Islands incorporated holding company 100% owned by Australian company Troy Resources.

Brief History: Agincourt Resources do Brasil bought the Andorinhas tenement from ASX-listed company Consolidated Minerals in August 2005 and completed 6 000 m of drilling at Mamão and Lagoa Seca. Chip samples are taken from iron mineralisation. Troy acquired the Andorinhas mine from Agincourt in November 2006 and Troy subsidiary Reinarda applied for trial mining, environmental and exploration permits. In June 2007, mining started from the Lagoa Seca pit, after which the construction of the gold processing plant began. First gold was poured from the Mamão processing plant in March 2008.

Brief Description: The Andorinhas operation comprises the Mamão underground mine, with low-grade stockpiles from the previously mined Lagoa Seca openpit used to supplement about 21% of the processing during the year. As the mine is nearing the end of its life, and the orebody is becoming increasingly complex with depth, it is transitioning from predominantly mechanised cut-and-fill to hand-held shrinkage stoping, to reduce dilution and increase grade for the plant going forward.

Geology/Mineralisation: The mine lies within the Andorinhas greenstone belt. This is a typical volcano-sedimentary sequence, with a basal sequence of felsic-intermediate metavolcanics, interbedded with metasedimentary rocks and an upper mafic metavolcanic-domi- nated sequence that is metamorphosed to upper greenschist facies.

There are two gold-mineralised trends – the Mamão-Babaçu trend and the Lagoa Seca trend. The shear zones follow the regional east-northeast trend. The iron mineralisation is situated within the banded iron formations (BIF) that generally lie parallel to the Mamão-Babaçu trend to the south. These BIF ridges have been subjected to weathering, with BIF material being transported short distances to the south and deposited in sedimentary colluvium. Two iron colluvium deposits, the Abacaxi and Estrela deposits, have been delineated on the Andorinhas property.

Reserves: Total proved gold reserves as at June 30, 2013, were 107 000 t, grading 1.4 g/t of gold. Total probable reserves were 203 000 t, grading 5.2 g/t of gold.

Total iron-ore reserves as at June 30, 2013, were 2.81-million tonnes, grading 63.6% iron, 3.9% aluminium oxide, 3.2% silicon dioxide and 0.042% phosphorous.

Resources: Total measured resources of gold as at June 30, 2013, were 115 000 t, grading 1.6 g/t of gold. Total indicated resources were 884 000 t, grading 3.8 g/t of gold. Total inferred resources were 724 000 t, grading 3.3 g/t of gold.

Total iron-ore resources as at June 30, 2013, were 6.495-million tonnes, grading 50.8% iron, 7.9% aluminium oxide, 7.8% silicon dioxide and 0.06% phosphorous.

Products: Iron and gold.

Mining Method: Shrink stoping and cut-and-fill.

Major Infrastructure and Equipment: Access to the mine is through a 5 m × 5 m ramp decline system. The mine operates three drill jumbos – an Atlas Copco 104, 251 and twin boom 282 for primary development. Ore and waste are loaded using a fleet of load haul dumpers, including a Toro 301, an ST2G and a Caterpillar R1600G. The mine also runs two underground diamond drill rigs – a Boart Longyear LM75 and a Diamec U4.

Firefighting equipment and fully equipped rescue chambers are located at regular intervals and can be accessed by independent escape ways.

The processing plant operates a conventional ball mall and carbon- in-leach circuit, which processes an average of 700 t/d. Gravity gold is processed through a Knelson concentrator and an Acacia plant. Tailings are treated in an INCO detoxification circuit prior to disposal in a tailings dam.

Prospects: Andorinhas is nearing the end of its operational life, with closure expected in 2014. Permitting of new mine development continues to present problems in Brazil, as the new mining law is yet to be ratified in Congress. The complexity of the permitting process and continued delays at federal and state levels are delaying the approval of thousands of projects across the country. This impacts on Troy directly, as the company is awaiting approval to proceed with mining from the small, but high-grade Coruja openpit, and also to enable a local Brazilian company to develop and mine the iron-ore on the company’s property by a local Brazilian company. Permits for these projects are expected to be received this year.

Contact Person: CEO Paul Benson.

Contact Details:
Troy Resources
Tel +61 8 9481 1277
Fax +61 8 9321 8237
Email troy@troyres.com.au
Website http://www.troyres.com.au