May 27 2015
Brazil Minerals, Inc. announced today that its Senior Geologist, J. Francescatto, and his team had successfully concluded the first phase of geological assessment in a dry area for diamonds and gold near a margin of the Jequitinhonha River in the State of Minas Gerais in Brazil. In total, six holes were drilled, each spaced by 50 meters, and with an average depth of 12.6 meters.
The distance between the two outermost holes was 250 meters. All six holes showed presence of varying depths of commercially-viable gravel containing diamonds and gold. In our geologist's opinion, there is continuity of this type of gravel layer within the entirety of the line drilled. In relative terms, this researched area is small compared to the total surface area of this mineral right, which measures 5.3 million square meters or 1,310 acres.
As noted above and in prior communications, we are performing focused and relatively inexpensive research to determine ideal locations for future mining pits. We own our own drilling equipment and have our own field team, which mitigates cost substantially. We own or control 11 mining concessions and 17 other mineral rights, all in Brazil. Although the primary objective of this effort is to find locations with the highest quality of diamondiferous gravel, it should be noted that gold essentially always occurs together with diamonds in these deposits. The relative concentrations between diamonds and gold vary widely depending on local geological characteristics.
Diamonds are mined worldwide in two ways. The first method is by exploration of kimberlites, the primary geological formations containing diamonds. By far, the best kimberlites in Brazil are located in the State of Rondônia. The second method of obtaining diamonds is from alluvial sources, diamondiferous gravel beds situated near rivers (note that current environmental laws in Brazil do not permit mining within 100 meters of the medium axis of a river bed). Alluvial placers are secondary sources of diamonds and orders of magnitude cheaper to mine than kimberlites. All of our current mineral rights are for the alluvial mining of diamonds. The best alluvial mines in Brazil are located in the State of Minas Gerais, where our current mineral rights for diamonds are located. The Jequitinhonha River borders many of our mineral rights, and is well known for its high quality, sought-after colorless gems. Other rivers in Minas Gerais produce a combination of color and colorless gems.
Historically, 97% of diamonds retrieved by BMIX in its properties are gem-type diamonds, and only 3% are industrial-type diamonds. We have sold our own polished diamonds to jewelry stores without the need to have them graded. For other buyers, we have certified and graded our polished diamonds at the Gemological Institute of America ("GIA"). All of our diamonds submitted to GIA have been certificated and returned graded.
While the results described today are strong, and have defined potential initial mining locales, we cannot make any assumptions about the extent to which similar results will be seen for the remainder of this large mineral area, or that substantial and prolonged revenues from diamonds or gold will be extracted from this area.