TORONTO – Belo Sun Mining Corp. [BSX-TSX] shares jumped 57% on Wednesday after the company said the Supreme Court of Para State in Brazil has overturned a previous decision to suspend the construction and environmental licenses at its flagship Volta Grande gold project in Brazil.
The previous decision was that the construction and environmental licenses would be suspended until a more extensive socio-economic study of the indigenous peoples had been completed.
The decision to overturn the suspension was reached after the court found Belo Sun had already properly consulted and that there was no evidence of damage or harm to the indigenous people.
The State Supreme Court also ruled that the decision of the Agrarian Court causes damage to the company and stated that there should be no obstacles for Belo Sun to continue with the environmental licensing process while complying with the legal requirements determined by the applicable environmental and judicial authorities.
Belo Sun shares advanced on the news, rising 57% or $0.14 to 38.5 cents on active trading of 679,520 shares. The shares are currently trading in a 52-week range of 88 cents and 22cents.
Belo Sun Mining is a Canadian gold exploration and development company with a focus on properties in Brazil. The company owns and operates the Volta Grande gold project, which is located in the municipality of Senador Jose Porfirio in northern Brazil.
Belo Sun has described Volta Grande as the largest undeveloped gold deposit in Brazil. Containing mineral reserves of 3.8 million ounces of gold, the project is expected to produce 268,000 ounces of gold annually during its first decade of open pit operations. The all-in-sustaining cost is forecast to be US$779 per ounce. The capital expenditure is estimated to be US$298 million.
The mine site is accessible by an existing 60-kilometre road from the city of Altamira, a major regional centre with a population of 150,000.
“We are pleased with the ruling by the Supreme Court of Para State and this decision confirms our belief that Belo Sun properly consulted with all local communities, including the communities living along the Xingu River,’’ said Belo Sun President Peter Tagliamonte.
The feasibility study envisages open pit mining using a 100% owner-operated equipment fleet. The mine has been designed to deliver an initial 3.5 million tonnes per year (10,000 tonnes per day) of mill feed, expanding to full production of 7.0 million tonnes per year (20,000 tonnes per day) in year three.
During the mining operation, a stockpile will be maintained adjacent to the primary crushing plant in the event of weather-related mining interruptions. Waste rock will be hauled to dedicated waste management facilities near the open pits.