BGC Now Has a Total Indicated Resource of 541,000 Ounces Grading 1.2 G/T Gold and Inferred Resource of 1,497,000 Ounces Grading 0.8 G/T Gold at a 0.3 G/T Cut-Off on Three Projects in Brazil

VANCOUVER, British Columbia -- (Business Wire)

Brazilian Gold Corporation (TSXV: BGC) is pleased to report the updated NI43-101 compliant mineral resource for the São Jorge gold deposit that includes 14,230,000 t grading 1.18 g/t gold (541,000 oz) in the indicated category and 27,810,000 t grading 0.68 g/t gold (611,000 oz) in the inferred category at a 0.3 g/t cut-off. The estimate incorporates an additional 14,393 m (38 holes) of diamond drilling completed by Brazilian Gold in 2011 as compared to the previous estimate that was based on 22,762 m (110 holes) of diamond drilling completed by the previous operators. The mineral resource estimate was completed by Coffey Mining (Coffey) of Toronto, Ontario and is documented in an independent NI43-101 Technical Report that will be posted on our website and SEDAR within 45 days of this News Release.

The wholly owned São Jorge property (585 km²) is well situated with respect to infrastructure that includes hydro-electric power, a paved highway 3 km due east of the deposit, and a skilled workforce in the nearby town of Novo Progresso located 70 km to the south.

Highlights

• Indicated ounces have increased by 43% (partly reflecting an 18% increase in indicated grade) when compared to the previous resource estimate in the 2011 Preliminary Economic Assessment (PEA) by Coffey both of which were reported at a 0.3 g/t gold cut-off.
• At a 0.5 g/t gold cut-off grade, the indicated gold grade increases to 1.40 g/t gold (Table 1) with a total of 465,000 contained ounces.
• Inferred ounces have increased 9.5% (partly reflecting a 35% increase in tonnage) when compared to the 2011 PEA.
• Selective mining of internal waste in the deposit and diverting this tonnage to a surface stockpile may result in an increase in the head grade delivered to the process plant.
• Potential robust operating margin suggested by the insitu metal value of US$67/tonne (indicated resource grade of 1.18 g/t and gold price of $1,765/oz) and the 2011 PEA operating cost of US$16.36/tonne; (note mineral resources that are not mineral reserves do not have demonstrated economic viability).
• An untested 1.5 km long resistivity +/- chargeability anomaly southeast of the São Jorge deposit is similar to the geophysical signature over the deposit suggesting potential to find additional zones of gold mineralization to the southeast; potential to find new gold deposits on the largely unexplored São Jorge property is considered excellent.
  
  To view IP map, please visit the following link:
  http://www.braziliangold.ca/email/20120919-1/Sao-Jorge-IP-Interpretation.jpg
• Strong mineral inventory growth on our three most advance stage projects—São Jorge, Surubim (Jau) and Boa Vista (VG1); see Tables 2 and 3.

Ian Stalker, CEO of Brazilian Gold, commented, “We are delighted with the results of the updated independent resource estimate on the São Jorge deposit. The increase in tonnage and grade of the indicated resource suggests that significantly more ounces will fall within the pit shell as compared to the 2011 PEA, as well as the increase in the inferred ounces that will fall into the same mining inventory.

“In addition, as identified by the recent drilling and more detailed geological interpretation of the deposit, there is potential to increase the overall deposit grade by selectively mining the low grade internal waste and diverting it to a surface stockpile instead of sending it through the process plant.

“The updated resource numbers along with recently completed metallurgy, power studies, environmental assessments, as well as the depreciation of the Brazilian 'Real' will be incorporated in an updated PEA, which should result in substantially better economics than the previous more than acceptable PEA results, and will make the decision to move to production more compelling.

“Finally, with the recently identified geophysical anomaly located directly southeast of the deposit and extending for greater than 1.5 km, the potential to find additional zones of gold mineralization makes us even more confident about the future development of our São Jorge Project in Brazil.”

The São Jorge resource estimate is based on 22,762 m (110 holes) of diamond drilling completed by the previous operators and 14,393 m (38 holes) of diamond drilling completed by Brazilian Gold since acquiring the project in late 2010. Gold assays (19,590) were composited at 1 m lengths and interpolated into the block model using multiple indicator kriging. A three dimensional solid model of the primary and oxide mineralization was constructed to constrain the resource estimate. The block model is comprised of individual blocks measuring 5 m by 5 m by 5 m. The mineral resource estimate (oxide and primary mineralization) at various cut-off grades is shown in Table 1; the oxide resource comprises a small part (9 %) of this overall resource. A Preliminary Economic Assessment (PEA) on the São Jorge deposit was completed in June 2011, which indicates an economic open pit cut-off grade of 0.3 g/t gold using a gold price of US$1,300 and economic parameters as outlined in the report.

Table 1: São Jorge indicate and inferred mineral resource (oxide and sulphide)* at various cut-off grades.

*According to National Instrument 43-101 and CIM (2005) an ‘Inferred Mineral Resource’ is that part of a Mineral Resource for which quantity and grade or quality can be estimated on the basis of geological evidence and limited sampling and reasonably assumed, but not verified geological and grade continuity. The estimate is based on limited information and sampling gathered through appropriate techniques from locations such as outcrops, trenches, workings and drill holes. Due to the uncertainty that may be attached to Inferred Mineral Resources, it cannot be assumed that all or any part of an Inferred Mineral Resource will be upgraded to an Indicated or Measured Mineral Resource as a result of continued exploration. Confidence in the estimate is insufficient to allow the meaningful application of technical and economic parameters or to enable an evaluation of economic viability worthy of public disclosure.

The São Jorge deposit is approximately 1,400 m long by up to 200 m wide and has been intersected in drill holes to 350 m depth; the deposit strikes northwest and has a sub-vertical dip. The deposit is hosted in quartz monzogranite and mineralization appears to be spatially associated with a number of discontinuous shear and fracture zones. Alteration minerals included chlorite, epidote, sericite, silica and sulphides that occur along fractures or where the fracture density is high as pervasive alteration. The predominant sulphide is pyrite with minor amounts of chalcopyrite. Gold mineralization is commonly associated with silica-sericite-sulphide alteration and higher gold values are generally associated with higher pyrite content and the presence of chalcopyrite.

Porfirio Cabaleiro, B.Sc., (Mining Engineer), MAIG and Hebert Oliveira, B.Sc. (Geology), MAIG, are the Qualified Persons for the NI43-101 Report on the Resource Estimate of the São Jorge gold deposit and have reviewed and approved the contents of this press release as far as it relates to their work.

Garnet Dawson, M.Sc., P.Geo. (British Columbia), Vice President, Exploration for the Company and a Qualified Person, as defined by National Instrument 43-101, has reviewed and approved the technical disclosure contained in this News Release.

About Brazilian Gold Corporation

Brazilian Gold has a resource inventory of 541,000 ounces of gold grading 1.18 g/t gold in the indicated category and 1,497,000 ounces of gold grading 0.79 g/t gold in the inferred category at a 0.3 g/t cut-off that is hosted in three deposits (Table 2).

Table 2: Brazilian Gold 2012 global resource at a 0.3 g/t gold cut-off.

At a 0.5 g/t cut-off, the resource inventory is 465,000 ounces grading 1.40 g/t gold in the indicated category and 1,212,000 ounces grading 0.97 g/t gold in the inferred category (Table 3).

Table 3: Brazilian Gold 2012 global resource at a 0.5 g/t gold cut-off.

Brazilian Gold is a Canadian-based public company with a focus on the acquisition, exploration and development of mineral properties in northern Brazil. The Company has title to one of the largest land packages (3,753 km²) in the Tapajós and adjacent Alta Floresta gold provinces. The land package contains green fields to more advance stage projects including the Company’s flagship São Jorge project. Rapid improvements to regional infrastructure continue to provide underlying support to Brazilian Gold’s activities in northern Brazil.

Some statements in this news release contain forward-looking information, including without limitation statements as to planned expenditures and exploration programs. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such factors include without limitation the completion of planned expenditures, the ability to complete exploration programs on schedule and the success of exploration programs.

Neither 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 the accuracy of this news release.

Contacts:

Brazilian Gold Corporation
Ian (John) Stalker, CEO and Director
Joanne Yan, President and Director
+1-604 602-8188
Investor Relations
or
Investor Relations
Renmark Financial Communications Inc.
Peter Mahzari: pmahzari@renmarkfinancial.com
Laurence Lachance: llachance@renmarkfinancial.com
Tel: +1-514-939-3989 or +1-416-644-2020
www.renmarkfinancial.com

Source: Brazilian Gold Corporation