Colossus Minerals Inc (COLUF)

[Cherise]

Good afternoon. Newbie here, and wanted to share some DD on Mining tax in Para state, Brazil.

Although Vale is promising billions in infrastructure development in the Para state area, they will be hit this month with an extra taxation "for increasing need of official record-keeping by the Brazilian Gov't", I couldn't find any mention of increased taxes on Colossus. What I did find in my DD is a very good read:

Colossus Minerals (TSX.CSI) stunned the mining world last year with its successful acquisition of Serra Pelada, one the most dramatic and fought-for mines ever to emerge in Brazil. And with drills turning right now, there’s no better time to take a hard look at this newly listed company.

A report published in Economic Geology in 2002 cites an internal report by Companhia Vale do Rio Doce that says, “The remaining reserve of Serra Pelada is currently estimated at 3.7 Mt @ 15.20 grams per tonne gold, 4.09 grams per tonne of palladium, and 1.89 grams per tonne of Platinum. Two of the authors of the report were employees of CVRD at the time of its publication.

At today’s prices, that implies a contained metal value of over $2 Billion. But this information is not compliant with National Instrument 43-101.

Latin America’s biggest gold rush started in 1979 with the discovery of Serra Pelada, which brought over 70,000 “garimpeiros” (artisinal miners) to the site 90 km southeast of the town of Marabá in Pará State, Brazil. An estimated 2 million ounces of gold were recovered by this virtual army of hand miners, who carried sacks of muck and rock up steep trails and ladders for processing at the lip of the pit, which eventually measured 400 meters by 300 meters. Unknown quantities of platinum and palladium were also recovered from the operation.

To understand the historical significance and sheer human effort that went into this pit during this period, a viewing of this video (produced by 60 Minutes Australia) is a must:
60 Minutes Classic: Treasure of Serra Pelada (click on the link in the article).

Garimpeiro activity slowed in the late 80’s after flooding and continuous collapses of the pit wall rendered recovery of ore impractical.

Brazilian-based mining giant Vale (formerly CVRD), (NYSE:RIO) who held the rights to the mineral concessions underlying Serra Pelada until 2007, conducted a drill program across 200 holes, with the best intercept an astonishing 4,709 grams per tonne gold, 204 grams per tonne platinum, and 1,117 grams per tonne palladium over 43 meters.

That’s ore with a total value in excess of $162,000 per tonne, and constitutes one of the highest grade gold intercepts in history.

Within this drill hole is a 15 meter intersection of 7,800 grams per tonne gold, 460 grams per tonne platinum, and 2,700 grams per tonne palladium, comprising ore with a value of just under $300,000 per tonne. This puts Serra Pelada firmly in the running as potentially one of the richest mineral deposits in the world, if not the richest.

VALE’s exploration confirms gold, platinum and palladium mineralization continuing under the pit for more than 450 meters, and to depths of 150 to 300 meters.



* this excerpt is from 2009, from: http://www.gold-speculator.com/resourcexinvestor/7094-colossus-minerals-colossal-opportunity.html



At the time of this posting, the RSI is still below 30 (Oversold) at 28.05.



Carpe Diem! Always DYODD.

Cherise