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Caeté mining complex, Brazil

4th August 2017

By: Sheila Barradas

Creamer Media Research Coordinator & Senior Deputy Editor

     

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Name: Caeté mining complex.

Location: The Caeté mining complex is located in the state of Minas Gerais, Brazil, 50 km east of Belo Horizonte.

Holding and Controlling Company: The Caeté gold complex is operated by Mineraҫão Serras do Oeste, a wholly owned subsidiary of Jaguar Mining.

Brief Description: The Caeté mining complex comprises the underground Roça Grande mine and underground Pilar mine (located 40 km away), a processing plant, with separate tailings disposal areas for fine floatation tailings and carbon-in-pulp (CIP) tailings.

Brief History: Jaguar acquired the Santa Bárbara property from Vale in December 2003, which included the Pilar mineral concessions. In November 2005, Jaguar entered into a mutual exploration and option agreement with Vale that resulted in the final transfer of the Roça Grande concessions to Jaguar in December 2010 and August 2011.

Jaguar started exploration activities at Pilar in 2006 and initially contemplated building a sulphide plant on site; however, the acquisition of the Roça Grande concessions created an opportunity to develop an expanded project, with greater plant capacity to receive ore from several mineral properties, located near Roça Grande.

Jaguar completed a scoping study of the Caeté project, received the implementation licence and secured the power contract for the start‐up in 2007. A feasibility study was completed in 2008, and by the end of the third quarter, Jaguar initiated construction for the milling and treatment circuits. After a hiatus, owing to the 2008/9 global economic crisis, construction resumed and the Caeté plant was commissioned in June 2010. The first gold pour occurred in August 2010 and commercial production was declared in October 2010.

Products: Gold.

Geology/Mineralisation: The Roça Grande mine is located in the upper unit of the Nova Lima group. The dominant rock types found in the mine are a mixture of chemical-sedimentary and metavolcanoclastic associations.

These are represented by quartz sericite and chlorite schists with variable amounts of carbonate facies banded iron formations (BIFs), oxide-facie BIF, metacherts and graphitic schists. The iron formations, chert units and graphitic schist units are intimately interbedded with each other, forming an assemblage of chemical and clastic sedimentary units.

Two important BIF horizons are present at the Roça Grande mine, the North structure (Structure 1), which hosts the RG01 mineralised body, and the South structure (Structure 2), which hosts the RG02, RG03 and RG06 mineralised bodies.

Gold mineralisation at Roça Grande is most commonly associated with BIF horizons. In the RG01, RG02, RG03 and RG06 mineralised bodies, the gold mineralisation is developed roughly parallel to the primary bedding and is related to centimetre-scale bands of massive to disseminated pyrite and arsenopyrite. In many cases, better gold values are located along the hangingwall contact of the iron formation sequence and is hosted by carbonate-facies iron formation. The grades generally decrease towards the footwall where the iron formation becomes more silica-rich.

The Pilar deposit is hosted by the basal units of the Nova Lima group. The rocks in the region of the mine comprise volcanic or volcanogenic sedimentary rocks of the Santa Quitéria unit, Nova Lima group, metamorphosed at greenschist facies, along with their intrusive equivalents. To the west, these basal units are in fault contact with mica-quartz, chlorite-quartz and chlorite-sericite schists, and chemical and clastic sedimentary rocks of the Santa Quitéria unit. The chemical sedimentary rocks include chert and BIF.

To the east, the units are in fault contact with ultramafic rocks (talc-chlorite schist) overlain by acid volcanoclastic rock.

The mineralisation at the Pilar mine is hosted by several host-rock units, including the BIFs, along with mafic and quartz-sericite schist.

Gold mineralisation is associated with sulphide mineralization comprising arsenopyrite and pyrrhotite. Quartz veins and veinlets
can also be present; however, the presence of quartz is not a prerequisite for higher gold values. The sulphide minerals occur mostly as disseminations in the host rock, but semimassive to massive concentrations are seen locally over a few tens of centimetres. Quartz veins are typically less than 1 m in width.

Reserves: Total proven and probable reserves as at December 31, 2015, were estimated at 966 000 t grading at 4.56 g/t gold.

Resources: Total measured and indicated resources as at December 31, 2015, were estimated 4.46-million tonnes grading 4.08 g/t gold. Inferred resources were estimated at 2.97-million tonnes grading 4.29 g/t gold.

Mining Method: The Roça Grande uses mechanised cut-and-fill and the Pilar mine uses sublevel open stoping.

Major Infrastructure and Equipment: The Caeté mining complex includes a nominal 2 050 t/d processing plant with separate tailings disposal areas for fine flotation tailings and CIP tailings. The process plant treats ore produced from the Roça Grande and Pilar mines. Electrical power supply is provided by the national power grid. The process plant is located at the Roça Grande mine at an elevation of about 1 250 m above sea level.

An administration complex is located at the entrance to the plant site, which includes offices, conference rooms, cafeteria, maintenance shops, compressors (mine and mill), a dry, a first aid station, warehouse, backfill preparation, and a water treatment plant, which is located near the process plant. The assay laboratory and process testing laboratory are also located near the process plant.

The Roça Grande mine is accessed by an adit about 800 m to the south-west of the plant at an elevation of about 1 100 m above sea level. Trailers located at the mine adit provide local storage and office space. The explosives and blasting accessories warehouses are located 3.5 km away from the mine area, in compliance with the regulations set forth by the Brazilian Army.

The Pilar mine, located about 40 km from the Caeté complex, trucks its ore to the Caeté mill. The surface infrastructure at the Pilar mine is limited to shops, offices and cafeteria, as well as first aid and warehouse facilities. The mine is accessed by an adit that is located at an elevation of about 750 m above sea level.

Prospects: Considering the volatility in the gold price and continued strengthening of the Brazilian real since September 2015, Jaguar has initiated a cost-reduction programme to offset these external factors. At Roça Grande, mining shifts will be reduced from four to two shifts a day while maintaining the current production levels.

Pilar will focus on opportunities to adjust timing or reducing development and contractor costs, reviewing current and longer-term needs for development, while investigating lower cost mining methods.

Contact Person: VP investor relations Joanne C Jobin.

Contact Details:
Jaguar Mining
Tel +1 416 847 1854
Email ir@jaguarmining.com
Website https://www.jaguarmining.com

Edited by Creamer Media Reporter

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