Meridian Mining S.E. is a Toronto-listed exploration, development and mining company in Brazil that originally focused on a manganese project in a joint venture with fellow Canadian junior Cancana Resources Corp. The companies merged in 2016 and continued to run the Espigão manganese project, located in the state of Rondônia in north-western Brazil, which produced a high quality and highly sought-after product. “But along the way, we recognised the project had a bit more to offer,” says Meridian’s CEO and President Dr Adrian McArthur. “We commenced a programme of stream sediment sampling, mapping and soil surveys, and that gradually uncovered two very substantial gold in soil anomalies.” The company also realised that the manganese mineralisation was associated with a much broader set of metals, particularly rich in copper, with some of the concentrates running up to 1% copper. Additional styles of hydrothermal mineralisation were also detected, including iron oxide breccia systems. “We’ve recently reinvented the project with a focus on a higher value-adding proposition. We believe there is a polymetallic exploration opportunity.” In line with its new focus on discovering a high-grade copper-gold system, Meridian has placed the manganese operation on care and maintenance, while refocusing on copper-gold exploration and project development opportunities.
“Brazil is an underexplored environment. It has a good mining history and good mining laws, but some of these areas have only recently been opened up for economic activities. Mapping is at a very early stage and we recognised that there are several satellite projects around.
“One of those is Mirante da Serra, where we have a number of our own licences and an option agreement over an undeveloped manganese deposit. We also have licences in the Ariquemes district, which is a very large tin mining centre, but still underexplored,” Meridian’s CEO says.
Meridian has also recently signed an option agreement on the Cabaçal Copper‐Gold Project in the neighbouring state of Mato Grosso, which hosts a historical copper-gold mine with undeveloped extensions and is undertaking due diligence on this project.
McArthur has been with Meridian for around five years and is based in Brisbane, although he commutes to Brazil to work on-site for two to three months at a time. The experienced geologist started as the company’s exploration manager but has recently seen his role transition from chief geologist to CEO.
McArthur’s appointment was announced in July along with other corporate changes, including the retention of former CEO Gilbert Clarke as a company director and the retirement of Peter Weidmann, who represented the Private Equity fund Sentient Global Resource Fund IV L.P. on the Meridian board. The company’s chairman, Charles Riopel, is an accomplished senior executive with a strong business background and over 25 years of international investment experience in mining.
The company had previously received strong financial backing from the Fund’s managers Sentient Equity Partners, but the decision was made this year to reduce its shareholding to below 10% to provide opportunities for new investors.
“We have a new set of investors behind us, we have more liquidity and a broader shareholder base, and we’ve just started to initiate our programmes, carefully monitoring the COVID-19 situation,” McArthur proclaims.
Following a successful C$3.5 million capital raise in July, Meridian is initiating a geochemistry programme at the Espigão Copper-Gold Project, which is located within the Amazon Craton – a hotspot for copper and gold mineralisation in Brazil.
“We’ve accumulated a large dataset in previous years which contains a lot of geophysical information, not all of which has been fully processed. The plan is to start with the basics and g2o back to some promising areas that haven’t yet had the first pass soil and stream geochemistry.
As many areas are yet to have preliminary geochemical coverage, Meridian will start with a reconnaissance programme and develop ore vectors for targeting a zoned hydrothermal copper-gold system, with the ultimate goal of identifying and prioritising targets for drilling.
While McArthur is cognisant of the market’s desire to see drill results, he highlights the vast nature of this prospective project’s area – 55 km East-West and 30 km North-South – and underlines the importance of building a good targeting criteria to accurately define targets for drilling.
“For the remaining months of this year the focus is going to be on the geochemical programme, getting a good sweep on pathfinding elements and understanding more about the gold anomalies and the extension of those into adjoining licences, processing the geophysics and optimising that.
“We expect to learn a lot in the coming months and going into next year we will be ready with a set of prioritised targets identifying where the best bang for the buck will be on what is a very large hydrothermal system.”
Moving into Mato Grosso
The Cabaçal Cu‐Au deposit was discovered in 1983 by BP Minerals, which was later acquired by Rio Tinto. It operated as a selective high‐grade underground mine in the late 1980s to early 1990s, but the main envelope of stockwork, stringer and disseminated Cu‐Au sulphide mineralisation was never exploited. Meridian is currently commencing a due diligence process at the project.
The Cabaçal project presents an opportunity to leverage off an historical database, with over 70,000 metres of historical drilling. The deposit is considered to be deformed Cu‐Au rich end member of the Volcanic Hosted Massive Sulphide deposit style. Globally, such deposits have been major global hosts of base metals, gold and silver. Deposits tend to form as clusters within districts of about 40 km in diameter, that may once have contained dozens of periodically spaced mineral centres.
Validation drilling was previously conducted in 2015 on the undeveloped mineralised halo with impressive results. Subject to a positive due diligence, the next steps would be to conduct a systematic programme of validation drilling and support a NI 43-101 resource update and feasibility study in an open-pit operation.
Manganese at Mirante da Serra
Meridian is balancing its upcoming workload between Espigão and the nearby Mirante da Serra project – an undeveloped manganese discovery. The company has a regional exploration package and an option agreement covering an extensive system of sediment-hosted manganese system.
“At the core option agreement area, we are just waiting for the national mining agency (AMM) to complete an assessment of a technical report that was recently presented to them. Approval of the report will then be the trigger for initiating a resource delineation programme on the Mirante da Serra mineralisation.”
The first step for Meridian, subject to AMM approvals, is to initiate a pitting programme at Mirante da Serra. At the project there exists significant colluvial mineralisation at surface, which means that the surficial material can be evaluated by pitting and trenching, with shallow drilling on the underlying primary.
Instead, the company plans to screen the soil and put it through a gravity concentration circuit (if needed), to produce a concentrate with no chemicals. This examination of the colluvial layer represents the easiest pathway to production for Mirante da Serra, according to McArthur.
The following step at the project will involve a decision relating to a small-scale trial plant before getting into full production. “We’re looking at all those options, but at the moment the copper and gold market is doing very well.
“Manganese has softened a bit, so our priority is to focus on Espigão, where there is a high value-add proposition. Then we can gradually build up the Mirante da Serra project as those approvals come through in the coming year.”
Thinking globally, acting locally
Meridian is also working hard to build local environmental, social and corporate governance (ESG) programmes throughout the rural areas surrounding the projects in Rondônia. The company views ESG as an essential part of its licence to operate, especially in Brazil.
“We are very conscientious about the importance of good relationships with the landholders in our local regions. All the work we execute is done with the agreement and blessing of those landholders,” explains McArthur.
“All the work is done very carefully through a process of consultation. We inform them what the programmes are and when we get to the stage of extraction, we will run through very carefully what the programme will entail and how it will impact them.”
Meridian has an in-house lawyer who deals with contractual arrangements with landholders and there is also a dedicated environmental specialist that studies environmental impacts and manages recuperation of the land.
“We are quite proud of this as it’s critical for having good relations with landholders. We are active in formalising the mediation programmes from all phases of mining that are being executed and returning it to a productive state, whether it was an area of vegetation or pasture.”
Strong team, strong jurisdiction
After discussing the next exploration steps at Espigão and Mirante da Serra, McArthur summarises by highlighting the skilled and capable team that will drive the project’s forward from grassroots concepts through to feasibility and permitting.
“We try to set ourselves apart by demonstrating to the market that we have the necessary skills in-house. The management team has a track record of project execution and I do believe Brazil is a great frontier compared to many other areas I’ve worked over the years.
“I find it amazing that some of these areas simply haven’t had any form of geochemistry, geophysics or drilling before and so there are opportunities here that don’t exist in other economies. This is one of the reasons I’ve sat with this project for some time. I really believe in the potential of the country and the people that are part of this team.”