Can you give an overview of Lavras Gold and its assets in Brazil?

Amarillo Gold, our predecessor company, had two key assets - Mara Rosa, a shovel-ready open pit project of approximately 1 million oz in central Brazil, and the advanced exploration LDS project in southern Brazil. After Hochschild acquired Amarillo, Lavras Gold was spun off with the LDS project, US$10 million in cash and a 2.0% royalty on certain exploration properties surrounding the Mara Rosa project, which should be in production by mid-2024.

Since Lavras Gold went public in April 2022, we have completed about 15,000 m of our 16,000-m drill program at LDS, prioritizing and testing several new targets that have never been drilled. We have recently upsized the drilling budget and will continue drilling. LDS is 29 claims on approximately 22,000 hectares of exploration ground around a favorable intrusive hosted gold system (Lavras do Sul Intrusive Complex) with a diameter of about 12 km. In addition to our 0.5 million oz at the Butiá gold deposit, we completed an NI 43-101 report on a second gold deposit, Cerrito, which added another 0.5 million oz to our resource, bringing us to approximately 1 million oz of NI 43-101 compliant gold resources in at least 23 known gold showings on our property. Importantly, Butia and Cerrito remain open to expansion. We have also announced several new discoveries at the Zeca Souza, Matilde, the Matilde Extension, Vila Marieta, Galvao, and Fazenda do Posto targets.

Can you elaborate on Lavras’ most recent discoveries at LDS?

Our most recent discovery at Fazenda do Posto has gained attention because we drilled 340 m grading 1.09 g/t in bulk-tonnage style of mineralization. Fazenda do Posto also included some higher grade sub-intervals including 160 m grading 1.79 g/t including 27 m grading 2.07 g/t and 68 m grading 2.09 g/t.

We have also drilled 21 holes into Zeca Souza, located on the west side of the intrusive complex about 1.2 km north of Butia and Fazenda do Posto. We encountered gold in all 21 holes, generally starting at or near the surface, but several holes bottomed in gold mineralization and require follow-up work. When we find visible gold – which has happened in 24% of the holes we have drilled, we typically find bonanza gold grades such as 43.6 g/t gold over 4.0 meters at a vertical distance of about 27 meters, and 3.0 meters grading 28.2 g/t gold at a vertical distance of about 100 meters vertical. This zone associated with visible gold at exceptional gold grades, together with long intervals of elevated gold values relatively close, suggests there is a robust gold system at Zeca Souza.

What are the main challenges and opportunities for exploration companies in Brazil?

Brazil has a strong legal system, although bureaucratic hurdles can be problematic. In addition, permitting can be time consuming, and the National Mining Agency has yet to improve its efficiency. Despite these challenges, there is immense potential for the mining industry to expand in the country as it remains largely unexplored. However, the mining industry must educate the population about the advantages of mining for the nation with objective information.

What are Lavras’ strategic goals for the next two years?

Our strategic goals are to define an economic gold mine at our LDS project, and to demonstrate the significant upside potential that we believe exists on the property. In the near-term, we will focus on getting a better understanding of the scope and scale of our Fazenda do Posto discovery, as well as the relationship to Butiá. Moving forward, we will continue de-risking the project on both the geology and permitting sides, and converting some exploration concessions into mining concessions. We have several new targets to test and follow up on, and we will also focus on expanding gold resources at our most advanced project Butia.

We also aim to continue to foster strong relationships with our stakeholders. Having an office in the town of Lavras do Sul is certainly helpful from a community relations perspective. We have also established the Rota do Ouro, or Gold Trail, which is a route that highlights the historical importance of gold mining to the development of the region. Being one of the few mining companies in the region, Lavras Gold can demonstrate how to mine responsibly while bringing economic benefits to the area.