Andradas is a volcano-sedimentary copper deposit in the vicinity of a major acid intrusion; the Caçapava Granitic Stock, which caused a strong metamorphic halo responsible for the formation of thick hornfels. The main copper deposit is outcropping at the discovery hill. The mineralization is confined to intensely fractured andesitic rocks intercalated with sediments, acid tuffs and minor iron formations. It is, mostly, an oxide copper deposit with the main ore zone over 1,000 meters long. The possible primary sulfide mineralization was never tested at depth.

High grade copper in gallery

Regional view of copper oxide ridge

History

Andradas was discovered in the early 1940s and was controlled by CBC (Companhia Brasileira do Cobre) for many years. The deposit has been studied by a Government Agency who was responsible for the completion of a number of trenches, 30 diamond drill holes, galleries and a pilot study designed to extract the copper from the oxide ore through leaching. The drilling campaign totaled 1,320m. Previous drilling programs totaled 1,200m. All boreholes drilled to-date are inclined and very shallow. Results of the drilling campaign and leaching pilot study were very favorable, resulting in an indicated reserve calculation of 3,300,000t @ 0.43% Cu. An additional 200,000t @ 0.7% Cu is inferred. This deposit has two higher grade zones of 560,000t @ 1% Cu and 22,000t @ 1.7% Cu.

Andradas is already a proven oxide copper deposit with a resource of 3.5 million tonnes outcropping on a hill flank. The top portion of the deposit alone has an in situ value of US$55 million (>14,200t of copper). The opportunity to establish a small leaching plant with low operating costs could generate a multi-million dollar positive cash-flow for the Company for several years; preliminary calculations show the deposit could generate a net cash-flow between $4-6 million per year over a five-year mine life.

Company Management believes there is greater upside potential to discover additional copper reserves in Andradas and the surrounding area. The area has not historically been covered by any geophysical method and only drilled to a maximum depth of 100 meters, which makes the discovery potential of extra primary sulfides and/or a massive sulfide deposit underneath the known oxide deposit prospective.

Majestic's staff has more than nine (9) years of experience in the Rio Grande Copper Province being in charge of the exploration programs of CVRD and CBC which historically resulted in several copper, lead and zinc discoveries in the region. Several other known mineral deposits in the region host commercial grade ore. Majestic anticipates securing additional mineral claims in the region in the near future.