Brazilian Metals Group (BMG)

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BMG

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Brazilian Metals Group (BMG) is a Perth-based company listed on the Australian Securities Exchange. It is focussed on the Rio Pardo Iron Ore project in Brazil. Brazilian Metals Group was listed on the Australian Securities Exchange (ASX) on 12 May 2004.

Minas Norte Mineraçao Ltda (a wholly owned subsidiary) is a Brazilian registered company and holds a number of tenements at granted and application stages in the north of Minas Gerais state in southern Brazil. The Rio Pardo iron ore project covers 899.0 square kilometres in 62 tenements.

Extensive canga (surficial detrital iron deposits) outcrops have been mapped in the area overlying diamictite rock units. These are interpreted to be related to elevated hematite and magnetite accumulations in the diamictites. A number of areas have been identified within the tenements that warrant further exploration.

Northern Minas Gerais Iron Ore Province
The geology of Brazil’s land mass is not well known when compared with the large quantity and high quality of the geological studies of other countries with mining traditions, such as Canada, Australia and the United States. Despite this shortage of basic information, Brazil is known internationally for its diversity of geological environments, high volume of already identified mineral reserves and large variety of mineral products in its mineral provinces and districts.

The iron ore deposits in Rio do Peixe Bravo are located in northern Minas Gerais state in the regions of Rio Pardo de Minas, Porteirinha and Riacho dos Machados. This iron formation is 600 meters thick and is basically composed of diamictites and hematite quartzites. Stratigraphically these deposits are positioned in an intercalation of the Nova Aurora Formation of the Macaúba Group. There is a high probability of the existence of genetic and geochronologic equivalence between the deposits in Rio do Peixe Bravo and the abovementioned jaspilites in Urucum in the Corumbá region, given that both are Proterozoic and associated with glacial sediments of the Macaúbas Group.

The distribution of banded iron formations in the geological record is limited to an early period in the Earth's history. Radiometric dating reveals that banded iron formations were primarily deposited during the Archaean (2.5 Ga) through the Early Proterozoic (between 2.5 and 1.6 Ga) eras, their greatest development occurring between 2.6 and 1.8 Ga ago. After about 1.8 Ga ago, there was essentially no deposition of banded iron formations, except for a slight resurgence of deposition that occurred between 800 and 600 Ma ago. These younger deposits, including the Rapitan Iron.

Formation in north-western Canada, North Minas Gerais and Corumba in Brazil, have a distinctly different character in comparison with the older banded iron formations, suggesting that they formed under different environmental conditions. Since 600 Ma ago, no true banded iron formations have been deposited.

The formation of the younger banded iron formations requires a different mode of origin to the traditional banded iron formations since they have a different mineralogy and there is ample geological evidence for an oxidizing atmosphere at this time. The intimate association of these deposits with glacial sediments suggests a cause and effect. It has been proposed that extensive ice sheets covered much of the Earth's surface during this period in its history, essentially isolating the oceans from the atmosphere. Other evidence in the geological record also supports the notion of extensive glaciation. This could have led to stagnant reducing conditions and the progressive build-up of dissolved ferrous iron in the oceans. Subsequent melting of the ice sheets would have restored water circulation patterns and caused oxidation and precipitation of the iron from solution, producing haematite-rich deposits.

The Northern Minas Gerais iron ore province covers the Rio do Peixe Bravo type deposits which are Rapitan in nature and associated with diamictites and hematitic quartzites.

Iron and Manganese Mineralisation Style and Concept Model
There is a clear distinction between older Banded Iron Formation iron ore deposits and the younger Rapitan type deposits which has an important bearing on their exploration approach and beneficiation characteristics. The North Minas Gerais (Rio do Peixe Bravo) deposits are of the younger Rapitan type associated with glaciomarine sediments.
Banded iron-formations (or BIF) are finely bedded chemical sedimentary rocks composed of interlaminated quartz (chert) and iron-bearing minerals with an iron content of about 30 wt%. Four principal types of BIF are distinguished, all of which are restricted to well defined time intervals in the Precambrian. BIF are notably absent from the Phanerozoic geological record.

Algoma-type BIF is widespread in the Archean greenstone belts, prior to 2.75 Ga. Many examples are known from all Archean cratonic nuclei. Algoma-type BIF are relatively restricted and always in close association with mafic volcanic rocks.

Hamersley-Transvaal-type BIF is very large and laterally extensive iron-formations that are essentially restricted between 2.0 Ga and 2.75 Ga. They represent by far the largest BIF deposits known. They formed as finely laminated mud below wave base of the extensive shelf platforms that developed around the first large stable Cratons. Hamersley-Transvaal-type BIFs have no apparent link to penecontemporaneous volcanism. Type examples are found in the Hamersley Group (Australia) and in the Transvaal Supergroup of South Africa. Most economically important BIF-hosted ore deposits are restricted to this type of BIF.

Granular iron-formations are closely related to the previous type, but are slightly younger (1.8-2.1 Ga), of much smaller lateral extent and were deposited above wave base. They show much coarser banding than the Hamersley-Transvaal-type and are typically composed of closely packed granules and oolites of iron oxides or chert. Type examples are found in the Lake Superior region (North America).

Rapitan-type iron-formations are Neoproterozoic (0.8-0.6 Ga) iron-formations that are characterized by their distinct association with glaciomarine sediments. They are thought to have been deposited in the immediate aftermath of a so-called ‘Snowball Earth’ state which is a term used to describe the period when the Earth was entirely covered with an ice sheet. This created conditions underneath the ice sheet which were conducive to iron transportation and deposition from solution. Examples include the Rapitan Group (Canada), the Yudnamutara Subgroup (Australia), the Chuos Formation (Namibia), and the Jacadigo Group (Brazil).

Detrital Iron Deposits and Canga
Detrital Iron Deposits (DIDs) are found where weathering has eroded bedded iron deposits and deposited ore fragments in natural traps formed by topography, usually drainage channels or valleys. Some Detrital Iron Deposits are loose gravels while others are naturally cemented (hematite conglomerate). Both types are often found in the same deposit.

The quality of the iron ore in these deposits is dependant on the bedded iron ore deposit which was the source of the ore particles. Typically these deposits are valued for the high proportion of high quality lump contained within them, as lump sized particles have a greater tendency to be captured in the trap site.

When rock units break down under the weathering process they are often affected by circulating groundwater under appropriate conditions and may form hard indurated zones such as silcrete, calcrete, ferricrete and laterite. When the underlying rocks are iron rich, such as the diamictites present in the Northern Minas Gerais Macaúbas Group, higher grade parts often form canga deposits by the weathering and recementing process.

Canga deposits are considered to be detrital iron deposits which formed in situ over the iron enriched host rocks. Other forms of DIDs such as those in the Pilbara and other Banded iron formation provinces often form as talus slopes adjacent to the ore zones.

An examination of outcrops in the Jiboia area where iron ore resources have been defined by drilling clearly displays weathered rock and canga coexisting with specularite mineralisation at surface. The cangas are directly comparable to those discovered at Rio Pardo de Minas.

In the Rio Pardo area, cangas are interpreted to have formed over higher grade iron ore mineralised zones and are an important indicator of subsurface mineralisation.

The cangas are usually present close to the Tertiary peneplain weathering surface now occupied by eucalypt plantations. Several metres of soil and weathering products often cover the canga so its presence is often blind or observed high up on deeply eroded river valley slopes. Canga detritus and boulders are present on the lower levels of the slopes but the source is often near the ridge tops and the source iron rich diamictites are obscured.

There is a strong structural element to the distribution of canga deposits but it is unclear if this influenced the location of iron mineralisation or has only affected the pattern of erosion.

Rip Pardo Project
Minas Norte Mineracao Ltda (a wholly owned subsidiary) is a  Brazilian registered company and holds a number of tenements at grated and application stages in the north of Minas Gerais state in southern Brazil. The Rio Pardo iron ore project covers 899.0 square kilometres in 62 tenements.

Extensive canga (surficial detrital iron deposits) outcrops have been mapped in the area overlying diamictite rock units. These are interpreted to be related to elevated hematite and magnetite accumulations in the diamictites. A number of areas have been identified within the tenements that warrant further exploration.

The Rio Pardo de Minas tenement block straddles the northern parts of the known mineralized area in the Northern Minas Gerais iron ore province. Field examination has demonstrated the presence of iron ore and manganese mineralization within the block, with a number of major targets identified to date.

The project area is situated in the extreme north of Minas Gerais, in the municipality of Rio Pardo de Minas and is traversed by Peixe Bravo and Alto Vacaria rivers, at coordinates: Lat 16º 10’ 00” S and Long 43º 50’ 00” W.

Based on initially available data, Macaúbas Iron Formation was found to cover an area totalling approximately 210 km2. At present, as further systematic geological research is carried out by Minas Gerais state agencies (CODEMIG), as well as by private companies owning interests in the region, the boundaries of Macaúbas Iron Formation have been successively extended both to the north and to the south forming the eastern flank of the Serra do Espinhaco range.

The geological structure in mid-eastern Brazil is largely derived from the Brazilian orogenesis which created a network of fold belts separated by cratons. The São Francisco Craton stretches over an area of approximately 680,000 Km2, comprising areas of the states of Minas Gerais, Bahia and Goiás. Overall, the Craton is surrounded by a network of ‘Braziliana’ fold belts or strips, known as Brasília, Araçuaí, Rio Preto, Riacho do Pontal and Sergipana belts.

These belts, also known as “Moving Belts”, are fold and thrust structures derived from the inversion of rift-type basins, infilled by gravity-induced, glaciation-influenced sedimentation. In the southeastern portion of the Craton, sediments crop out on the Jequitaí Formation (glacial diamictites) and, in the Araçuaí fold belt, deformed metasediments crop out on the Macaúbas Group, which is associated with the iron formations in northern Minas Gerais.

Fold belts adjacent to the São Francisco Craton represent inverted sedimentary basins that underwent tectonic – metamorphic – orogenetic processes. In a general manner, local metamorphism is of low to medium degree and allows for stratigraphic reconstructions that make it possible to recognize sedimentary processes and environments involved.

The Macaúbas Group, a major stratigraphic unit in the Araçuaí Belt, which was deposited under glacial influence, is composed of metadiamictites, quartzites, phyllites and quartz schists. Local metadiamictites were initially interpreted, during the 1950s and 1960s, as being tillites. Depositional processes only recently have been better understood, with the various types of diamictites now being interpreted as related to glaciomarine sedimentation processes. Also in a general manner, these metadiamictites are related to quartzites and metapellites making up sedimentary continental rift-type and convergent basins near Neoproterozoic magmatic arcs.

Concordantly deposited on a basement made up of quartzitic rocks of the Espinhaço Supergroup, the Macaúbas Group reaches a few kilometers in thickness and is essentially composed of metadiamictites, with a significant vertical and lateral gradation into pure and/or hematitic quartzites.

The Macaúbas Group has been subdivided into two distinct lithostratigraphic units, known as Rio Peixe Bravo Formation (basal unit) and Nova Aurora Formation. A member was separated from the latter, referred to as Riacho Poções Member, to which local hematite rocks are associated.

The Riacho Poções Member is intercalated into the Nova Aurora Formation, part of the Macaúbas Group, and is approximately 600m thick. It consists mostly of grayish diamictites that grade into hematitic, often magnetitic diamictites. Banded quartzites and hematitic, quartz phyllites occur amidst diamictites. Diamictites contain as much as 60% Fe throughout the entire formation. Structured cangas (detrital iron deposits – DID) are associated with the Iron Formation outcrops.

Hematitic quartzites are banded rocks, with quartz bearing beds (50-60% SiO2), rich in sericite, apatite, opaques, chlorite and zircon, alternating with hematite beds (35-40% Fe), with magnetite and martite, and ilmenite lamellae. Sedimentary structures are obliterated by recrystallization and metamorphic foliation. The sequence is folded and rocks have at least two schistosities.

In genetic terms, the presence of diamictites with their matrix replaced with iron and banded quartzites suggests that the environment in which the Riacho Poções Member originally developed was a basin in which clastic and exhalative chemical sedimentation occurred. The replacement of diamictite matrix with hematite suggests that exhalation of diamictite matrix with hematite and further suggests that exhalation of ferruginous fluids continued after chemical and clastic sedimentation and, probably, after diagenesis.

Surficial cangas are quite common in the area of occurrence of the rocks of Riacho Pocoes Member. They are no more than 20 m thick and are typical of chemical interaction with iron rich groundwaters.
The Rapitan style glaciomarine sedimentary sequences of the Rio Pardo area host significant manganese deposits which form a viable target within the tenement area.

Prospectivity and Target Areas
The Rio Pardo tenements display extensive development of canga deposits which are interpreted to represent weathered equivalents of underlying iron rich rocks. Preliminary exploration has been carried out on most of the areas with a view to identifying areas for followup examination.
The chemical analysis for Bamboo Prospect showed higher Fe content than Taquara. Rock chip samples collected from the area are included in the following table.

Carbon Hill and Adjacent Areas
The tenement holders identified around 400m strike of manganese mineralisation in the area. The manganese was a combination of colluvium and good outcrop to the south trending north northeast. This area will potentially have Fe in addition but no outcrop is evident in the eucalypt plantation. Rock chip samples from the outcrops returned 25.6% and 24.68% Mn.

Bamboo
This strong canga outcrop is immediately south of Carbon Hill and extends into an area under application.  Rock chip samples of the canga returned 30.96%, 30.1% and 48.57% Fe.

Pit Bull
The area has extensive canga development outcropping in a horseshoe shaped valley and extends over an aggregate of several kilometres. Specular hematite was noted on fracture surfaces. No rock chip results are available but the presence of specularite is a strong indication of high Fe values.

Reindeer
The Reindeer Prospect was identified during the first field visit. It is exposed in a road cutting. Friable hematite in diamictite is present in the roadside. This cutting is >80m wide (The Hangingwall contact was not identified) although the strike length is unknown. This is the priority target due to the friable Hematite mineralisation identified and width shown. Rock chip sample from the side of the road returned 31.18%, 15.45% and 24.19% Fe.

Monte Alegre
The Monte Alegre Prospect trends east – west and is the northern extension of the Baixinha Prospect. This Canga mineralisation outcrops on both parallel hills for around 2km and is between 20 to 50m wide. The Canga is overlying a quartzite rock at one point although this may be a footwall/hangingwall to a hidden diamictite. Rock chip samples from the canga returned 34.56%, 35.44%, 33.34% and 28.63% Fe.

Recent scout RAB drilling by Lefroy confirmed the surface indications iron ore with a 1000 metre, 22 hole program. 18 of the 22 holes returned significant assays in the range 10%Fe to 25%Fe.
400m strike length of manganese mineralisation has been located in the Carbon Hill area. Rock chip sample from the outcrops returned 25.6% and 24.68% Mn.  At Bamboo, strong canga outcrop has been located immediately south of Carbon Hill Rock chip samples of the canga returned 30.96%, 30.1% and 48.57% Fe. RAB drilling numerous samples in the 10% to 25% Fe range

The Reindeer Prospect is exposed in a road cutting with friable hematite in diamictite. This cutting is over 80m wide. Rock chip sample from the side of the road returned 31.18%, 15.45% and 24.19% Fe. The Monte Alegre Prospect trends east – west and is the northern extension of the Baixinha Prospect. This Canga mineralisation outcrops on both parallel hills for around 2km and is between 20 to 50m wide. Rock chip sample from the canga returned 34.56%, 35.44%, 33.34% and 28.63% Fe.

The Pitbull area has extensive canga development outcropping in a horseshoe shaped valley and extends over an aggregate of several kilometres. Specular hematite was noted on fracture surfaces. No rock chip results are available but the presence of specularite is a strong indication of high Fe values.

Previous Company Name: Lefroy Resources Limited