Lago Dourado Minerals Ltd. (Tsx.V:Ldm)

MIDASLETTER.COM TORONTO BEIJING LIMA LONDON JOHANNA NEW YORK ZURICH SYDNEY

LAGO DOURADO MINERALS LTD. At 70,924 hectares in total area, Juruena is (TSX.V:LDM) a huge project that has seen garimpeiros mining somewhere between 0.5 and 1 million ounces of gold from the top 30 metres across a 10 square kilometre area within the project area.

Shares Outstanding: ~ 60.6 million Warrants & Options: ~ 8.5 million The immediate area is sparsely populated Fully Diluted: ~ 69.1 million and is generally mining friendly.

Market Cap@$0.80: $48.48 million Access is via the small city of Alta Floresta, DISCLOSURE: We do not own shares at some 250 km east-southeast the property, this time. which is in turn accessible via scheduled air OUR STRATEGY: Accumulate to $1.50 service from elsewhere in Brazil. A gravel OUR EXIT: Sell 50% at $3.00, let the rest airstrip is present in the center of the ride with trailing stop-loss if shares lose Juruena property, so it is possible to fly there 25%or more combined in any 5 trading with a small plane; it is also possible to drive session in a row. to the property.

A great discovery is good business. A great The property straddles the 30 km wide, discovery with a great story is …well, good west-northwest trending Juruena/Teles Pires business with a good story. But everybody in Horst, which is dominated by volcanics of the Midas universe loves a good story. the Iriri Formation intruded by granites of the Hereʼs one: 1760 Ma Teles Pires Suite. The horst contains the Juruena-Teles Pires gold A garimpeiro (informal miner) had been province, from which 6.5 million ounces of eking out an existence for years digging for gold was produced between 1979 and 1997. gold near his house in Mato Grosso state, Deposits within the gold province are Brazil. One night, his wife had a dream, and typically porphyry to epithermal in style, told him to dig for gold on the other side of spatially related to granitoid intrusions. the road from where heʼd been digging for years. He did, and that year, he mined Consolidated Madison Holdings Ltd. 10,000 ounces from an open pit. Heʼs rich, conducted exploration activities at the and the open pit he created by hand is now property during the mid-1990s including the called the Jacaré open pit, and lies within in drilling of 91 holes for a total of more than the boundaries of Lago Dourado Minerals 15,000 metres Historic drill results include Ltd.ʼs Juruena project. (See the photo 21.8 metres at 21.0g/t, 36.0m at 2.7g/t and below). 3.7m at 131.3g/t.

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No further exploration work has been for license, for a total area of approximately conducted since the mid-1990s. Since the 77,753 ha. Most of the property consists of mid-2000s the exploration licences have cleared land being used for ranching been split in an interlocking fashion between activities, although parts are forested. Geomin (a private Brazilian consulting firm) Several small settlements occur on the and Talon Metals (TSX:TLO). Lago Dourado property; Lago Dourado has been using the has consolidated the land package such that town of Porto Espiradião, immediately west the project can now move forward by of the property, as a base of operations. The acquiring Talon´s exploration licences in July area can be accessed via main highways, 2010 (100%) and signing an option and a succession of lesser highways and agreement on Geomin´s licences (70%). ranchers' gravel roads are used to access the property. The company expects to In December, the company announced the commence drilling on Juaru by the end of discovery of a major gold-in-soil anomaly Q2 2011. extending more than 4 kilometres long and 700 metres wide. Of key significance is the fact that this project was assembled by Thomas Lago Dourado started a 12,000 metre drill Obradovich, who with more than 25 years program in December 2010 that will see experience in mining, co-founded Aurelian results coming out by the end of March if all Resources Inc. which discovered the Fruta goes well. Del Norte gold deposit in Ecuador and was subsequently acquired by Kinross for $1.2 Juaru Project billion. Mr. Obradovich acquired most of the The Jauru property is centered at Matachewan gold camp and through a approximately 58º30'W, 15º40ʼS in the reverse takeover of Young-Davidson Mines southwestern part of Mato Grosso, 80 km Ltd. upgraded and doubled the resource from the border with Bolivia. The property is which was subsequently acquired by comprised of 11 Exploration Licenses and Northgate Minerals in 2005.

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