Brazil Resources Inc. Reports on Company Outlook for 2015

VANCOUVER, Jan. 28, 2015 /PRNewswire/ - Brazil Resources Inc. (TSX.V: BRI; OTCQX: BRIZF) ("Brazil Resources" or the "Company") today issued a Letter to Shareholders regarding Company plans for the coming year. The full report from Chairman Amir Adnani follows.

Dear Fellow Shareholder,

On behalf of the board of directors and management of Brazil Resources, I am pleased to provide the following update and outlook for the Company early in 2015.

First and foremost we would like to thank all of our shareholders for their continued support of the Company and our long-term strategic plans. This support was most recently demonstrated by the $4.46 million private placement we completed to start the year, which was oversubscribed and at a premium to market prices including strong participation by management, our board and existing institutional shareholders.

Market Conditions and Growth Strategy

Since our initial public offering in 2011, our strategy has been to take advantage of the opportunities presented by challenging market conditions during the four-year bear market in the junior resource space and to grow our resource base through accretive acquisitions.

To that end, 2014 was a transition year for the Company following the acquisition of Brazilian Gold Corporation ("BGC"). This transaction significantly expanded our resource base with a 91% increase in the indicated category to 31.9 Mt grading 1.46 g/t for 1.5 Moz and with a 184% increase in the inferred category to 71.8 Mt grading 1.06 g/t for 2.4 Moz. Additionally, this acquisition gave BRI leverage to an exciting uranium exploration property, the Rea project, with potential to host high-grade uranium mineralization located in Canada's Western Athabasca Basin. Areva, one of the largest nuclear companies in the world, is our partner on this project.

The combination of the rise in the spot uranium price and the increasing momentum for discovery and exploration in Canada's Western Athabasca Basin provides us the opportunity to capitalize on our Rea project.  We are currently exploring ways to unlock the value of this asset for our shareholders, including potentially a spin-out of the asset, outright sale and other potential options.

The Company's aggressive growth strategy in 2015 remains unchanged from 2014. In carrying out our plans, we strive to remain fiscally disciplined and to only execute transactions that we believe present a significant value proposition. Our goal is to identify and complete transactions involving projects with relatively low carrying costs and that are at an advanced stage with defined resources and viability in current market conditions.

When we completed our initial public offering, our Company had one early exploration-stage project. Since then, we have taken advantage of market conditions and expanded our project and resource base to include, among others:

• Cachoeira Gold Project, Para State, Brazil – Acquired from Luna Gold Corp. in 2012. Since acquiring the project, we have completed an updated National Instrument 43-101 ("NI 43-101") technical report, which reported an indicated resource of 786,737 ounces of gold (17.4 million tonnes grading 1.40 g/t gold) and an inferred resource of 563,200 ounces of gold (15.6 million tonnes grading 1.12 g/t gold), using a 0.35 g/t gold cutoff. We have commenced environmental and mine permitting for the project, including preliminary engineering studies required for permitting purposes.
• Sao Jorge Gold Project, Para State, Brazil – Acquired as part of our acquisition of BGC in November 2013. In February 2014, we filed a NI 43-101 technical report for this project, which, estimated an indicated resource of 715,000 ounces of gold (14.42 million tonnes at 1.54 g/t gold) and an inferred resource of 1,035,200 ounces gold (28.19 million tonnes at 1.14 g/t gold), using a 0.3 g/t gold cutoff. This resource estimate is coincident with a geophysical anomaly with 50% of this anomaly untested. Exploration to date has focused on a small area (10% of the project area) surrounding the deposit with most of this large property (584 sq km) unexplored. We believe there is potential to expand the existing resource with additional drilling as well as to identify new areas of mineralization.

Since acquiring the project, a final report on the exploration concession overlying the deposit was submitted to the DNPM requesting that it be converted to a mining concession. Once the DNPM has approved the request, we plan to initiate the requisite baseline environmental studies and additional engineering studies in preparation for applying for the necessary permits to further progress the project. 

• Boa Vista and Surubim Projects, Para State, Brazil – Acquired as part of the BGC transaction. In February 2014, we filed NI 43-101 technical reports, which estimated an inferred resource of 336,000 ounces of gold (8.47 million tonnes at 1.23 g/t gold), using a 0.5 g/t gold cutoff, for the Boa Vista Project and an inferred resource of 503,000 ounces of gold (19.44 million tonnes grading 0.81 g/t gold), using a 0.3 g/t gold cutoff, for the Surubim Project. Both projects have only had initial drilling completed and our geological team has identified additional zones for follow-up.
• Artulandia Project, Goias State, Brazil – A polymetallic discovery made by Brazil Resources' geological team. Twobase metal horizons with precious metal credits have been identified and measure at least  2,000 m by 250 m. Geological features are suggestive of a gold- and zinc-rich volcanogenic massive sulphide deposit. In 2011, we entered into an option agreement and currently own 100% interest in this project.

Uranium Opportunity

In addition to the above gold projects, as part of our acquisition of BGC, we acquired a 75% interest in the Rea uranium project, which covers approximately 88,400 hectares and is located in the western portion of the Athabasca Basin. The Athabasca Basin is one of the world's most prolific regions for high-grade uranium deposits, however, historically most of the exploration and discoveries have been confined to the eastern part of the basin. The recent discovery of the Patterson Lake deposit, the third largest deposit in the Basin, indicates potential of this underexplored western portion of the Basin. We believe our Rea project gives the Company a very unique exposure to uranium in addition to our gold focus. Areva is the Company's partner in the project, holding a 25% ownership interest.

The Rea uranium project surrounds Areva's Maybelle high-grade uranium deposit. Prior operators have expended over $10 million on exploration activities at the project. In 2014, we completed an initial NI 43-101 technical report on the project. The report identified a number of targets that have potential to host unconformity-type uranium mineralization, based on, among other things, results of airborne and ground geophysical surveys and the results of limited drilling to date. Since mid-2014, uranium prices have increased by approximately 35%. If this trend continues in 2015, highly prospective exploration projects such as the Rea project will benefit.

Executive Appointments in 2014

2014 also saw the Company make two key executive appointments. Garnet Dawson was appointed Chief Executive Officer and Paulo Pereira was appointed President of the Company. Mr. Dawson was formerly the Company's technical director and has extensive mineral exploration and development experience. He  previously served as BGC's VP-Exploration, where he and his team were responsible for the advancement of the Sao Jorge Project and for developing the Company's portfolio in Brazil.

Mr. Pereira has over 25 years of experience in exploration and development of mining projects in Brazil and Canada. Based in Brasilia, he most recently served as the Company's VP-Exploration and Country Manager for the past four years.

Our board of directors believes that these management appointments will assist the Company to progress our existing projects and to identify potentially accretive opportunities.

Private Placement

Finally, we recently completed a $4.46 million private placement, which was oversubscribed and included a large degree of participation by insiders and existing shareholders. The placement strengthens our balance sheet and positions us to take advantage of additional opportunities presented in 2015.

Going Forward

We expect 2015 to be another exciting year for our Company and its shareholders. We plan to continue our existing long-term strategy of identifying and executing accretive acquisitions of advanced gold projects. We believe that the continued depressed conditions in the mining markets will present more of these opportunities. With our experienced team and our strong balance sheet, we believe we are well positioned to capitalize on our strategy. We look forward to reporting further progress to you throughout 2015.

Thank you again for your confidence in management. We welcome your continued participation in the Company. Please call us at 1-855-630-1001, or email [email protected] with any questions or comments. Please visit www.brazilresources.com to keep current.

Yours truly,

Amir Adnani
Chairman
Brazil Resources Inc.

Technical Information

Paulo Pereira, the Company's President, has supervised the preparation of, and reviewed the, technical information contained in this document. Mr. Pereira holds a Bachelor degree in Geology from the Universidade do Amazonas in Brazil, is a qualified person as defined in NI 43-101 and is a member of the Association of Professional Geoscientists of Ontario.

For further information regarding our Cachoeira, Sao Jorge, Boa Vista, Surubim (previously Rio Novo project) and Rea projects, please refer to the following respective reports: (i) independent technical report dated April 17, 2013 and amended and restated on October 2, 2013 titled "Technical Report and Resource Estimate on the Cachoeira Property, Para State Brazil", prepared by Greg Mosher of Tetra Tech, Inc.; (ii) independent technical reported by Porfiro Rodriguez and Leonardo de Moraes Soares of Coffey Mining with an effective date of November 22, 2013 and titled "Sao Jorge Project, Para State Brazil; (iii) independent technical report by Jim Cuttle, Gary Giroux and Michael Schmulian with an effective date of November 22, 2013 and titled "Technical Report, Boa Vista Gold Project and Resource Estimate on the VG1 Prospect, Tapajos Area, Para State, Northern Brazil"; (iv) independent technical report by Jim Cuttle and Gary Giroux with an effective date of November 22, 2013 and titled "Technical Report on the Rio Novo Gold Project and Resource Estimate on the Jau Prospect, Tapajos Area, Para State, Northern Brazil"; and (v) independent technical report prepared by Irvine Annesley and Roy Eccles with an effective date of September 12, 2014 and titled "Technical Report on the Rea Property, Northeastern Alberta," each of which is available under the Company's profile at www.sedar.com.  

About Brazil Resources Inc.

Brazil Resources Inc. is a public mineral exploration company with a focus on the acquisition and development of projects in emerging producing gold districts in Brazil, Paraguay and other parts of South America. Currently, Brazil Resources is advancing its Cachoeira and São Jorge Gold Projects located in the State of Pará, northeastern Brazil.

Cautionary Note

Investors are cautioned not to assume that any part or all of mineral deposits in the "indicated" and "Inferred" categories will ever be converted into mineral reserves with demonstrated economic viability or that inferred mineral resources will be converted to the measured and/or indicated categories through further drilling. In addition, the estimation of inferred resources involves far greater uncertainty as to their existence and economic viability than the estimation of other categories of resources. Under Canadian rules, estimates of Inferred Mineral Resources may not form the basis of feasibility or other economic studies.

Forward Looking Information

This document contains certain forward-looking information that reflect the current views and/or expectations of Brazil Resources with respect to its business and future events, including the potential to identify, execute and successfully integrate additional acquisitions, the Company's future exploration plans and the prospects of the Company's existing projects. Forward-looking statements and information are based on the then-current expectations, beliefs, assumptions, estimates and forecasts about the business and the markets in which Brazil Resources operates. Investors are cautioned that forward-looking statements and information involve risks and uncertainties, including: the inherent risks involved in the exploration and development of mineral properties, the uncertainties involved in interpreting drill results and other exploration data, the uncertainties respecting historical resource estimates, the potential for delays in exploration or development activities, the geology, grade and continuity of mineral deposits, the possibility that future exploration, development or mining results will not be consistent with Brazil Resources' expectations, accidents, equipment breakdowns, title and permitting matters, labour disputes or other unanticipated difficulties with or interruptions in operations, fluctuating metal prices, unanticipated costs and expenses, uncertainties relating to the availability and costs of financing needed in the future, commodity price fluctuations, regulatory restrictions, including environmental regulatory restrictions, or any failure to integrate acquired companies and projects into the Company's existing business as planned. These risks, as well as others, including those set forth in Brazil Resources' filings with Canadian securities regulators, could cause actual results and events to vary significantly. Accordingly, readers should not place undue reliance on forward-looking statements and information. There can be no assurance that forward-looking information, or the material factors or assumptions used to develop such forward looking information, will prove to be accurate. Brazil Resources does not undertake any obligations to release publicly any revisions for updating any voluntary forward-looking statements, except as required by applicable securities law.

Neither the TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in the policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this news release.

SOURCE Brazil Resources Inc.

Related Links

www.brazilresources.com