Jangada agrees to acquire Brazil's Molly Gold project

(Sharecast News) - Jangada Mines said on Monday that it has signed a letter of intent to secure an exclusive option to acquire 100% of the Molly Gold Project in the Tapajós region of Pará State, Brazil, as it looked to build a portfolio of high-grade gold assets in the country. Under the non-binding deal with BGold Mineração, Jangada said it would have the right to earn an option over the 6,656-hectare Molly project, which hosts an initial JORC 2004 inferred mineral resource of around 130,000 ounces of gold at an average grade of two grams per tonne.

The AIM-traded company said the project benefitted from more than 2,800 metres of historical drilling, which returned high-grade intercepts including 6.5 metres at 10.5 grams of gold per tonne and one metre at 200 grams per tonne, with mineralisation extending from near surface to depths of about 150 metres over a strike length of roughly 400 metres.

Jangada said geological, geophysical and mapping data indicate the defined resource represents only part of a much larger mineralised system, with the structure interpreted to continue for at least 500 metres to the west of current drilling.

The firm said it believed that it offered significant scope for resource expansion in a district that had seen historical alluvial gold production of up to 30 million ounces but remained underexplored for large-scale hard-rock deposits.

As part of the letter of intent, Jangada had committed to complete a minimum 2,000-metre diamond drilling programme within three months, after which it would have the exclusive right to enter into a definitive option agreement.

The proposed option structure included staged cash and share payments, further drilling commitments totalling up to 12,500 metres, and additional consideration linked to the definition of mineral resources, alongside a retained 2% net smelter royalty for the vendor.

"The Molly Project represents a high-grade, shallow gold project in a prime gold region that aligns strongly with our investment and development criteria," said chief executive Paulo Misk.

He added that the combination of an existing JORC resource, high-grade drill intercepts and clear expansion potential made Molly "an excellent addition to our portfolio".

Misk said the company intended to mobilise drilling contractors immediately to test extensions at the Molly 1 target, describing the planned programme as "low-cost, high impact".

"The deal structure importantly provides us with a stage-gated and highly cost-effective framework to gain control of a gold asset with fantastic potential," he added.

Jangada also said it expected first-phase drill results from its Paranaíta project later this month, which would be used to update that project's resource estimate.

Misk said the group's strategy was to build a multi-project gold company in Brazil.

"Our team's deep knowledge of Brazil continues to be instrumental in identifying projects that can be advanced rapidly and we are focussed on building a substantial, multi-project company, growing resource ounces and establishing a production profile that delivers long-term value for all stakeholders."

The company noted that the deal was a related-party transaction under the AIM rules, as Jangada director Luis Azevedo is the sole shareholder of BGold.

It said the board, excluding Azevedo, considered the terms to be fair and reasonable for shareholders.

At 1257 GMT, shares in Jangada Mines were up 24.14% at 1.8p.

Reporting by Josh White for Sharecast.com.