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A prefeasibility study on Belo Sun Mining’s (TSXV:BSX) Volta Grande project in Brazil is not sitting well with investors.

A prefeasibility study on Belo Sun Mining’s (TSX:BSX) Volta Grande project in Brazil is not sitting well with investors.

Belo Sun’s stock dropped 37 percent Tuesday on triple normal trading volumes, reported Mining.com, before recovering 14 percent of its value to 68 cents a share.

The study says the project will cost $750 million to build and would produce 313,000 ounces of gold annually over a minelife of 10 years. Cash costs are $711 an ounce, with annual operating costs pegged at $19.6 million.

Volta Grande is the largest gold mine currently being developed in Brazil, at 2.6 million ounces recoverable gold.

Mining.com states that the project has attracted intense scrutiny from federal authorities during the permitting process, considering it would be built near lands settled by indigenous people and a hydroelectric project currently under construction:

“In September last year – after reports about a federal investigation into the project that found inconsistencies in the environmental assessment –  Belo Sun withdrew and then quickly re-instated a $50 million financing deal provoking bewilderment from investors.”

Belo Sun expects to release a feasibility study before the end of the year.

Securities Disclosure: I, Andrew Topf, do not hold equities in any companies mentioned in this article. 

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