Aguia Resources drilling returns high grade phosphate at Três Estradas South in Brazil
Aguia Resources’ (ASX: AGR) initial auger drilling at the Três Estradas South Project in Brazil have returned strong phosphate intersections with a peak of 16 metres at 14.4% P2O5 from surface.
Notably, the results confirm that mineralised carbonatite host rocks extend for about 1,400 metres southwest from the existing Três Estradas Resource of 29 million tonnes at 4.3% P2O5.
Três Estradas shows similarities to the carbonatite style hosted phosphate deposits mined by Vale within Brazil, including the Cajati operations that have Reserves of 85.1Mt at 5.45% P2O5.
Further assays are pending and a delineation drilling program to significantly expand the current resource estimate is at the planning stage.
“We are extremely pleased with the initial results from Três Estradas South and in particular the shallow auger holes that have outlined the potential for extensions to the phosphate mineralisation previously defined in the JORC-compliant resource to the north,” managing director Simon Taylor said.
“This scout drilling covers a wide area and will greatly assist our detailed resource delineation drilling programs that will be designed to significantly expand the current JORC resource.
“Together with the recent Joca Tavares discovery we believe the projects located in Rio Grande do Sul have the potential to form a solid basis for future project development opportunities including a potential early start up and cash flow.”
The company’s projects in the region are located close to existing infrastructure, primary agriculture customers and fertiliser blenders.
Next Steps
Finalisation and further assays from the auger drilling program will be used in designing a delineation drilling program to significantly expand the current resource.
Through successful programs of resource expansion and further beneficiation test work the company will then embark on a Scoping Study.
Auger Drilling
The company has to date drilled 121 shallow scout auger drillholes on 100 metre spaced lines to test the southern extension of the Três Estradas phosphate project in Brazil’s Rio Grande do Sul state.
These have been logged and samples from a selection of holes that have successfully intersected carbonatite host rock and zones of adjacent amphibolite have been submitted for assay.
Notable results include:
- 16 metres grading 14.4% P2O5 from surface including 6 metres at 20.1% P2O5;
- 10 metres at 12.6% P2O5 from surface including 6 metres at 15.2% P2O5;
- 15 metres at 13% P2O5 from surface including 2 metres at 21.4% P2O5; and
- 15 metres at 10.4% P2O5 from surface
Notably, all of these holes ended in mineralisation, indicating that the phosphate mineralisation remains open to depth.
Rio Grande do Sul
Both the Três Estradas and Joca Tavares projects in Rio Grande do Sul represent significant new phosphate discoveries with characteristics similar to existing producers in Brazil.
Importantly, the grade and mineralogy is similar to that of other operating mines globally including Yara’s Siilinjärvi mine in Finland and Vale’s Cajati mine in Brazil, both of which produce a high quality concentrate from phosphate within carbonatite host rocks.
The three southern States of Rio Grande do Sul, Santa Catarina and Paraná currently consume over 1 million tonnes P2O51 or almost 30% of Brazilian consumption, however there are currently no producing phosphate mines in the region.
This grants the company’s projects, which cover a 860 square kilometre area, a logistical advantage to supply the region compared with phosphate mined in Minas Gerais and Goias and imports.
More broadly, Brazil is the world’s fourth largest consumer of fertiliser but produces just 4% of the world’s fertiliser.
Analysis
With drilling indicating a southwestern extension to its Três Estradas Project, Aguia Resources is well on the road towards expanding its existing Resources by a considerable volume.
Further assays are pending from Três Estradas South providing news flow with further beneficiation test work planned, then a Scoping Study beckons.
Aguia's projects are in proximity to existing infrastructure and customers, which are likely to provide further impetus for a rapid development.
Further increases in the company’s shares are likely as more drill results are released.
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