International Gold Resources, Inc. Update on its Brazil Business
International Gold Resources Inc. provided an update on its Brazilian business activities, Cupixi license status, and corporate strategy.
In August 2008, IGR announced that it had filed an amendment to the Company’s application for approval of its Cupixi mineral license with the Brazilian National Department of Mineral Production (DNPM) that included a complete geologic report addressing the DNPM’s initial comments to the Company’s 2007 license filing. Following the submission, the Company’s President and Chief Executive Officer, Robert L. Dumont spent approximately six weeks in Macapa, Brazil working with the Company’s Brazilian legal counsel TozziniFreire Advogados (“Tozzini”), a Sao Paulo-based law firm with expertise in mining applications and licenses in an effort to secure the issuance of the Cupixi license. Despite the filing of the amended license application and the significant efforts of Company management, the DNPM as of yet has not issued the license.
At the same time, the global economic downturn has caused the Company to re-evaluate its corporate and Brazilian strategies.
Mr. Dumont commented, “We have seen a dramatic reduction in base metal, steel and steel input commodity prices as well as available capital for base and ferro metal exploration-stage projects over the past year. We do not think it is prudent at this time to continue to expend significant sums of money on the Cupixi project or other Brazilian mineral assets in the current economic environment. Therefore, we have significantly downsized our Brazilian organization and spend rate in an effort to preserve our limited cash. Our Chairman, David H. Francisco, intends to return to Brazil in mid January as part of our continued effort to seek Brazilian financial partners as well as explore other options to protect and preserve a longer-term option on the Cupixi manganese project in the event that market conditions improve.”
Although the Company is re-evaluating the priority of its Cupixi project, the Company continues to advance a strategy for its existing non-Brazilian gold assets as well as look for new opportunities in gold.
Company Chairman, David H. Francisco said, “While the market has changed for base and ferro metals from a year ago, we are still very bullish on gold and believe that long-term fundamentals support higher gold prices. We continue to hold our Yukon options and are in discussions with potential partners to fund additional work on those properties in 2009. We are also looking at new potential opportunities in gold that we hope to be able to communicate in more detail with investors soon.”