G Mining Ventures (TSX:GMIN,OTC Pink:GMINF) announced plans to acquire the CentroGold project, located in Brazil’s Gurupi Gold Belt, from mining giant BHP (ASX:BHP,LSE:BHP,NYSE:BHP).
There are no upfront costs involved in the acquisition — G Mining instead will give BHP a 1 percent net smelter return (NSR) royalty on the first 1 million ounces produced, and a 1.5 percent NSR royalty on output thereafter.
The company said on Monday (September 9) that the transaction will strengthen its portfolio as it aims to expand its presence in the region and continues to build its pipeline of gold projects in South America.
The land package G Mining is acquiring from BHP encompasses 47 tenements, with CentroGold included within that area. The tenements cover approximately 1,900 square kilometers in the Northern Brazil state of Maranhão.
The project holds an indicated gold resource of 1.7 million ounces, as well as 0.6 million ounces of gold in the inferred category. CentroGold also has a number of identified gold targets, including the Blanket, Contact and Chega Tudo open-pit deposits. They host 2.3 million ounces of JORC-compliant gold resources.
OZ Minerals, which was acquired by BHP last year, completed a prefeasibility study for Blanket and Contact in 2019, projecting an initial mine life of 10 years, with gold production ranging from 100,000 to 120,000 ounces annually.
The first two years were expected to yield between 190,000 and 210,000 ounces.
G Mining intends to further enhance CentroGold’s resource base and align the project with its broader corporate strategy, which includes updating the JORC-compliant gold resources to meet NI 43-101 standards. The company also plans to revisit the project’s geologic model and redesign it to fit current permitting requirements and market conditions.
President and CEO Louis-Pierre Gignac said the CentroGold acquisition aligns with the company’s goal of developing a multi-asset portfolio. Currently the firm’s main asset is its Brazil-based Tocantinzinho gold mine, where it started commercial production earlier this month. It is expected to produce an average of 174,700 ounces of gold annually.
“CentroGold boasts an attractive starting resource base on a large land package that covers ~1,900 km2 with significant exploration upside, located within a proven geological belt,” Gignac said in a press release.
Moving forward, in addition to work at CentroGold and Tocantinzinho, G Mining will also be looking to advance its Oko West gold project in Guyana toward a construction decision in the second half of 2025.
The company’s transaction with BHP is expected to close in Q1 of next year.
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.
