Belo Sun Mining Corp. [BSX-TSX] shares jumped 30% on Tuesday November 19 after the company issued a press release containing details of two court rulings that affect its flagship Volta Grande gold project in Brazil.
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-km road from the city of Altamira, a major regional centre with a population of 150,000.
On Tuesday, the company said the Agrarian State Judge of the Court of Altamiro has made available on its electronic system (the official publication in the legal gazette is expected shortly), an interlocutory decision that the Construction License related to the Volta Grande Project will remain suspended until certain conditions are fulfilled.
The conditions to be fulfilled by the company are as follows:
It must periodically update SEMAS (Secretaria de Estado de Meio Ambiente e Sustentabilidade/Secretariat of Environment and Sustainability of the State of Para) on the status of the relocation of certain families living in the area directly affected by the Volta Grande Project.
It must also update SEMAS on the negotiations with INCRA (National Institute of Colonization and Agrarian Reform) involving the overlap of a portion of INCRA urban development project area within the Volta Grande Project.
Separately, the State Court of Appeal of Para in Belem, ruled on Monday, November 18, 2019 by the 1st Panel of Judges to uphold the company’s license and authorize the start of construction under the condition that Belo Sun complies with the relocation of certain families living near the Volta Grande Project in accordance with the relocation plan terms as submitted by Belo Sun to SEMAS for its construction licence.
The company noted that this is a verbal ruling and the written version of the decision has yet to be released.
However, Belo Sun shares advanced on the news, rising 30.2% or $0.095 to 41 cents on active trading of almost 1.2 million shares. The shares are currently trading in a 52-week range of 22 cents and 72 cents.
“We are pleased with the rulings and the clarity provided by the courts,” said Belo Sun President and CEO Peter Tagliamonte. “We have been working with INCRA on resolving the land overlap and Belo Sun has been, and will continue to comply with all the conditions outlined in the court rulings,” he said.
Meanwhile, the company said it continues to work with Indigenous communities around the Volta Grande Project and is in the final stages of completing the Indigenous Study prepared following the protocols prescribed by FUNAI ( Fundacao Nacional do Indio), including primary data collection and consultations with the local Indigenous communities, as per the Brasilia Federal Court decision from December 6, 2017.