trended down, dropping 26% on the year. The mine, which consists of three underground mines (Mina III, Mina Nova, and Mina Palmeiras) as well as an open-pit section, had produced 3.4Moz as of mid-2012 and produced 133,166oz in 2011. According to AngloGold’s midyear projections, the firm had expected higher production—a total of 540,000oz from its Brazil operations. Instead it extracted 486,000oz.

In May 2012, AngloGold initiated a takeover of Serra Grande, worth $220 million, from

Brazilian producers saw stagnant production in 2012, after a spike in gold prices led to a production bonanza in 2011. Brazil is now depending on newly producing mines to hold up annual production results as output drops.

It seems explorers aren’t the only firms struggling in the current gold space. Producers are also looking for answers. Brazil’s production numbers in 2012 underscore a hostile market, as year-end results revealed waning production and rising costs across the country. Cash costs per ounce inflated markedly, increasing an average of 16% from 2011 to 2012 across Brazil’s five largest mines, according to Mining Leaders research. That spike led to a $499 increase in cost-per-ounce production at the five operations, where soaring extraction costs have stifled new development. Gold production stagnated at Brazil’s 11 largest mines, showing 0% growth on the year, and falling slightly from 1.547Moz to 1.53Moz.

Brazil’s lackluster results can largely be laid on falling production at Jaguar Mining’s Paciência and Turmalina mines. The two projects’ output fell 75% and 38%, respectively, due to long-term shutdowns starting in May 2012. In a press release, Jaguar attributed the delays to maintenance and the implementation of new mining methods: “2012 was a challenging year for Jaguar and these results reflect the magnitude of the challenges,” said Jaguar President and CEO David Petroff after the release.

Of Brazil’s top 11 producing mines, five saw falling production, and two showed no noteworthy increase.* Production at AngloGold Ashanti’s Serra Grande mine also

* Mining Leaders assumed 2012 production at Sossego to be equal to 2011 figures, as current results had not yet been released at time of publication.

Kinross, who also had a trying year. Kinross sold the remaining 50% of the project following a $2.5 billion write-down in February that saw its share price drop nearly $2.00 in two weeks. The buyout mirrored a global flood of divestiture deals in 2012, as major companies continue to shed assets and remain solvent. Kinross then weathered a significant drop in its production results across all operations, which fell 6% in the first quarter of 2012 compared to the year prior.

Costs on the rise

Meanwhile, cash costs per ounce at Serra Grande, Brazil’s fifth largest mine, increased 6% to $816 in 2012, making it Brazil’s second most expensive operation to run. AngloGold’s flagship AGA Mineração project saw the largest increase in cash costs per ounce, rising 33% from 2011 to $696. Kinross’s Paracatu mine, Brazil’s largest, was the costliest at $881

BRAZIL EXPLORATION BRIEFING1Vol 2 • April 2013/mining.leaders @miningleaders

2012 Brazilian Gold Production

B&A Mineraçao’s Acquisition of Rio Verde

Q&A: John Blake, Luna Gold

Exploration News

BRAZIL EXPLORATION BRIEFING Vol 2 • April 2013

HIGHS & LOWS

Cash costs per ounce inflated markedly, increasing an average of

16% from 2011 to 2012 across Brazil’s five largest mines

Yamana’s Jacobina project produced 116,000oz in 2012

BRAZIL EXPLORATION BRIEFINGVol 2 • April 2013

/mining.leaders @miningleaders

IN FIGURES

60% Kenai Resources

12% Horizonte Min.

33% Lago Dourado

40% Serabi Gold

42% INV Metal

TOP 5 MOVERS BRAZIL GOLD INDEX

The Brazil Gold Index measures the average market capitalization of 13 Brazil-focused gold juniors (AGC, ORA, BSX, BGC, BRI, CPN, CSI, JAG, LDM, LGC, MNM, CDG and CAS).

8

Ticker Shares Share Price (C$) Prev Month (C$) % Change Market Cap (C$m) Cash (C$m) Moz EV/oz

Canada TSX & TSX-V

Amarillo Gold AGC 69,938,085 $0.680 $0.750 -9 $ 47.6 $0.00 1.85 $25.71

Amerix Precious Metals APM 82,454,934 $0.035 $0.040 -13 $ 2.9

Aura Minerals ORA 228,358,334 $0.330 $0.360 -8 $ 75.4 2.60 $28.98

Belo Sun BSX 265,910,000 $1.140 $1.150 -1 $ 303.1 6.90 $43.93

Brazilian Gold BGC 103,230,000 $0.190 $0.210 -10 $ 19.6 2.60 $7.54

Brazil Resources BRI 41,330,000 $1.100 $1.060 4 $ 45.5 $7.20 0.67 $78.60

Carpathian Gold CPN 555,419,911 $0.280 $0.300 -7 $ 155.5 9.00 $17.28

Colussus Minerals CSI 106,953,401 $3.110 $3.060 2 $ 332.6

Cosigo Resources CSG 73,175,423 $0.100 $0.110 -9 $ 7.3

Eagle Mountain Gold Z 37,583,526 $0.345 $0.360 -4 $ 13.0 0.98 $13.23

Horizonte Minerals HZM 360,046,170 $0.165 $0.190 12 $ 59.4

INV Metal INV 491,735,340 $0.035 $0.060 -42 $ 17.2

Jaguar Mining JAG 85,080,567 $0.590 $0.600 -2 $ 50.2 8.29 $6.06

Kenai Resources KAI 105,906,734 $0.040 $0.025 60 $ 4.2 0.10 $42.36

Lago Dourado LDM 94,279,828 $0.100 $0.150 -33 $ 9.4

Lara Exploration LRA 30,593,021 $1.230 $1.150 7 $ 37.6

Luna Gold LGC 105,008,566 $3.250 $3.760 -14 $ 341.3 3.90 $87.51

Magellan Minerals MNM 117,223,226 $0.150 $0.170 -12 $ 17.6 2.40 $7.33

Rio Novo Gold RN 113,670,000 $0.190 $0.230 -17 $ 21.6 2.66 $8.12

Sandstorm Gold SSL 88,698,702 $9.620 $9.600 0 $ 853.3 1.01 $844.83

Serabi Gold SBI 361,268,529 $0.100 $0.120 -40 $ 36.1 0.67 $53.92

TriStar Gold TSG 57,664,803 $0.340 $0.350 -3 $ 19.6

Australia ASX

Cleveland Mining CDG 200,280,000 $0.225 $0.235 -4 $ 45.1

Crusader Resources CAS 126,650,000 $0.300 $0.330 -9 $ 38.0 2.43 $15.64

Minera Gold MIZ 466,920,000 $0.030 $0.045 -33 $ 14.0 0.10 $140.08

Paringa Resources PNL 61,000,008 $0.180 $0.200 -10 $ 11.0

Orinoco Gold OGX 62,000,000 $0.140 $0.150 -7 $ 8.7

OTC

Gold Hills Mining GHML 16,620,000 $2.040 $ 33.9

Aurora Gold ARXG 114,140,000 $0.030 $0.035 -14 $ 3.4 0.13 $26.34

Santa Fe Gold SFEG 117,600,000 $0.260 $0.260 0 $ 30.6

NYSE

Eldorado Gold EGO 714,534,000 $9.530 $10.210 -7 $ 6,809.5 25.70 $264.96