Meridian Delivers Strong Economics for Cabaçal’s PEA: After-Tax NPV5 of USD 573 million, 58.4% IRR & 10.6 Month Payback
6th Floor, 65 Gresham Street | London EC2V 7NQ | United Kingdom
Meridian Delivers Strong Economics for Cabaçal’s PEA: After-Tax NPV5 of USD 573 million, 58.4% IRR & 10.6 Month Payback
LONDON, United Kingdom, March 6, 2023 Meridian Mining UK S (TSX: MNO), (Frankfurt/Tradegate: 2MM) (OTCQB: MRRDF) (“Meridian” or the “Company”) is pleased to announce the positive results of the Preliminary Economic Assessment led by Ausenco Engineering Canada Inc. (“Ausenco”) for the Cabaçal gold-copper deposit in Brazil (“Cabaçal” or the “Project”). The PEA study confirms the economic potential of the project, positioning it as a promising growth opportunity for the company.
Cabaçal 2023 PEA Highlights: (All amounts are in United States Dollars unless otherwise stated)
- Base case after-tax NPV5 of $573M (CAD1 $778M) and 58.4% IRR using $1,650/oz gold,
$3.59/lb copper, and $21.35/oz silver (Table 1);
- Spot case after-tax NPV5 of $745M (CAD1 $1.01B) and 69.7% IRR using3 $1,841/oz gold,
$4.13/lb copper, and $21.35/oz silver;
- High-grade year 1 mill feed of 2.3 g/t gold and 0.29% copper which generates high after-
tax first year free cash flow of $204M, leading to capital repayment in 10.6 months;
- Average grade of 0.64 g/t gold and 0.31% copper over the life of mine - which
demonstrates the efficiency of the flowsheet in recovering the gold, copper and silver;
- Average annual gold equivalent production of 131,100 ounces at AISC of $670.70/oz
AuEq2 for years 1-5;Total LOM (22.3 years) production of 1.02M ounces gold, 353 Mlbs of copper and 1.76M ounces of silver;
- Pre-production CAPEX of $179.6M (CAD1 $244.1M);
- Low life-of-mine strip ratio of 2.1:1;
- After tax NPV5:CAPEX Ratio of 3.2:1; and
- Significant potential for future economic optimization and project upside remains through
engineering optimizations, increased throughput and additional resources that could be identified through the ongoing drill programs.
1 Exchange Rate USD/CAD of 1.35889.
2 See technical notes for gold equivalent equation.
3 Spot prices on London close on 1st March, 2023.
Meridian will host a Live Webcast to discuss the Cabaçal PEA Results on March 6, 2023 at 10:30am EST (7:30am PST). A presentation by management will be followed by Q&A.
Conference Call Webcast and Dial in Details:
Webcast URL with Audio: https://www.webcaster4.com/Webcast/Page/2958/47803 Telephone Numbers: US/Canada Free: 888-506-0062 ; International: 973-528-0011 ; Access Code: 624154
Dr. Adrian McArthur, Meridian’s CEO commented, "The PEA demonstrates Cabaçal's exceptional potential as a sustainable, low-cost open-pit mining operation capable of supplying both industrial and precious metals to the global market. The PEA study has shown exceptionally highmargin and meaningful returns, confirming both the quality of the asset and the expertise of our technical team. Within just two years of acquiring Cabaçal, we have produced our first economic study, outlining an after-tax NPV5 of $573m, which is a testament to our commitment to swift and effective progress.
"The PEA lays a solid foundation for expansion, as the Company anticipates that optimization studies will confirm the potential for superior economic returns by increasing annual throughput from 2.5Mt to ~4Mt after year four, while still using the same resource. What excites us even more is the potential for further growth, not only at Cabaçal, but also at our other satellite targets, including the nearby St Helena mine within trucking distance. This presents a genuine opportunity for us to advance Cabaçal, as outlined in our PEA, and to systematically develop a cornerstone asset in a significant new gold and copper camp over time."
"We are pleased to have a team of mining professionals already stationed in Brazil to advance Cabaçal through feasibility following the completion of the PEA. We extend our gratitude to Meridian's team, as well as Ausenco and GE21, for their role in delivering this report and contributing to the revival of the Cabaçal gold and copper mine."
Table 1: Summary of Cabaçal PEA’s NPV5 and IRR sensitivities to metal prices
PEA RESULTS SUMMARY
Table 2: PEA production summary
| Item | |
| Plant Feed Mined Mt 55.6 Waste Mined Mt 118.1 Total Mined Mt 173.7 Strip Ratio Waste:Mineralized Material 2.1 Milled tonnes Mt 55.6 Mill Throughput Mt/annum 2.5 |
| Item | |
| Total gold production ounces 1,021,320 Total copper production tonnes 159,926 Total silver production ounces 1,758,923 Average metallurgical recovery - Gold % 89.7% Average metallurgical recovery - Copper % 92.4% Average metallurgical recovery - Silver % 75.2% |
| Item | Year 1-5 | LOM | |||
| Average annual gold production (AuEq) 000 Ounces Recovered Gold (AuEq) 000 Ounces Total Cash Cost USD/oz Sustaining capital USD/oz All in Sustaining Costs ("AISC") USD/oz | 131.1 655.3 644.3 26.4 670.7 | 81.2 1,811.2 804.4 61.8 864.2 |
Table 3: Project economics at base case and spot prices
| Item | Base Case | Spot Case | |||||
| Life of mine Years NPV5 USD million IRR % Payback Days Initial Capital Expenditure USD million Sustaining Capital Expenditure USD million | 22.3 572.5 58.4% 321 179.6 108.0 | 22.3 745.2 69.7% 279 179.6 108.0 | |||||
| Item | Average Year 1-5 | Total LOM | Average Year 1-5 | Total LOM | |||
| Revenue USD million Operating Costs USD million Free cash (After Tax) USD million | 208.6 2,882.1 67.7 1,181.2 107.3 939.8 | 234.9 3,254.1 67.7 1,181.2 128.7 1,216.4 |
Table 4: Cabaçal PEA model inputs
| Item | Base Case | Spot Case | |||
| Gold Price USD/oz Copper Price USD/lb Silver Price USD/oz Exchange Rate BRL:USD Corporate Tax Rate % Social Tax % SUDAM Tax Reduction % SUDAM Tax Reduction Years Gold Royalty Rate % Copper Royalty Rate % Silver Royalty Rate % | 1,650 3.59 21.35 | 1,841 4.13 21.35 | |||
| 5.3 25% 9% 75% 10.00 1.5% 2.0% 2.0% |
Figure 1: Cabaçal project annual and cumulative cash flow
Table 5: PEA capital cost breakdown
| Cabaçal Initial Capital Costs | Cabaçal Sustaining Capital Costs | ||
| Item USD | Item USD | ||
| Equipment & Packages 39.9 Materials 9.7 Construction And Erection 36.5 Other 32.1 Indirect Costs 31.4 Contingency 29.9 | Process 30.5 Indirect Costs 7.8 Owner Costs 3.9 Contingency 18.0 Mine Closure 23.4 | ||
| Total Initial Capital 179.6 | Total Sustaining Capital 83.6 |
Table 6: PEA operating cost breakdown
Cabacal Operating Costs Breakdown
| Item | USD/t milled | USD/oz |
|---|---|---|
| Mining Costs | 9.31 | 296.43 |
| Labour | 1.63 | 51.78 |
| Power | 2.07 | 65.80 |
| Reagents & Consumables | 2.61 | 82.96 |
| Maintenance | 0.97 | 30.72 |
| Water/sewage | 0.00 | 0.07 |
| Access maintenance | 0.06 | 1.96 |
| Laboratory | 0.38 | 12.13 |
| Dry stack | 2.12 | 67.33 |
| G&A | 2.11 | 67.06 |
| Total Operating Costs | 21.25 | 676.25 |
Figure 2: NPV5 Sensitivity to costs and metal prices.
Figure 3: IRR sensitivity to costs and metal prices.
Figure 4: Payback sensitivity to costs and metal prices.
STUDY CONTRIBUTORS
The PEA team was led by Ausenco, a global provider of consulting and engineering services for mining projects. Ausenco were supported by H&S Consultants Pty Ltd (resource estimation), GE21 Mineral Consultants Ltd (mine plan and schedule), SGS Lakefield Canada (metallurgy), Sete Soluções e Tecnologia Ambiental Ltda (environmental studies) and Hidrovia Hidrogeologia e Meio Ambiente Ltda (hydrological studies).
CABAÇAL RESOURCE ESTIMATE1
Table 7: Cabaçal Mineral Resource (Effective Date August 21st, 2022, 0.3 g/t AuEq cut-off)
Estimates are based on the Technical Report titled, “Independent Technical Report, Mineral Resource Estimate for the Cabaçal VMS deposit, Cabaçal Project, State of Mato Grosso, Brazil”. The Mineral Resource estimate in the table above was prepared by specialist group, H&S Consultants Pty Ltd (“H&SC”) and announced by Meridian on September 26, 2022. A technical report was filed on the Company’s website and SEDAR within 45 days of this disclosure.
- Mineral Resources are not mineral reserves and do not have demonstrated economic viability; and
- Minor variations may occur during the addition of rounded numbers.
Significantly, the Mineral Resource is near-surface, and extends over 1.9km along strike with a prominent high-grade shallow gold zone in the Cabaçal Northwest Extension. Ongoing drilling on the margins of the Mineal Resource has intercepted significant zones of copper-gold mineralization. Further drill results are pending.
The Mineral Resource estimate included in the PEA is reported according to the classification criteria set out in the Canadian Institute of Mining, Metallurgy, and Petroleum Definition Standards for Mineral Resources and Reserves (“CIM Definition Standards”). These standards are internationally recognized and allow the reader to compare the Mineral Resource with that reported for similar projects.
The PEA is preliminary in nature. The PEA mine schedule and economic assessment includes numerous assumptions and is based on both Indicated and Inferred mineral resources. Inferred resources are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves, and there is no certainty that the project economic assessments described herein will be achieved or that the PEA results will be realized. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Additional exploration will be required to potentially upgrade the classification of the Inferred Mineral Resources to be considered in future project evaluation studies.
MINING
- 22.3-year shallow open pit mining operation proposed at with total feed inventory of 55.6 Mt;
- High-grade year 1 mill feed of 2.3 g/t gold and 0.3% copper with average grade of 0.64 g/t gold and 0.31% copper over the life of mine; and
- Low life-of-mine strip ratio of 2.1.
Cabaçal will be mined using the open pit method in 3 alternating shifts, operating 24 hours a day, 365 days a year. The mining movements were designed to produce enough ROM to feed a mineralized material processing plant with a nominal capacity of 2.5Mtpy and LOM of 22 years and 4 months.
The mining will operate with block model of 10x10x5m and slope angle in the hang wall of 48º and following the mineralized material slope in the foot wall.
Mining will be fully outsourced in the operations of mechanical blasting, loading and haulage. With a soft mineralized material - average WI of 11.8 - blasting will be carried out with a load ratio of 350g/t for
1 See Meridian news release September 26, 2022 https://meridianmining.co/press-releases/ mineralized material and 280g/t for waste. A dilution factor of 3% and mining recovery of 97% were considered. The transport distance from the mine to the ROM yard varies from 1.49Km in the pre-stripping to a maximum of 2.50Km in year 18. For the waste the transport distance will range from 1.02Km to 4.02Km in year 18.
The transport of the mineralized material and waste will be carried out by 42t trucks manufactured in Brazil, a fact that contributes to the reduction of CAPEX and OPEX costs. For work associated with these trucks, 8.1t hydraulic excavators were dimensioned, which means 4.7 passes per truck loaded with mineralized material and 5.1 passes per truck loaded with waste.
Trucks will transport the mineralized material for discharge directly into the crusher or to the ROM stockyard. When necessary to recover mineralized material from the ROM stockyard, a 13.7t wheel loader will be used. The waste will direct to the 3 projected waste dumps, each trip being directed to the pile closest to the pit region in mining activities at that time. From the 16th year onwards mining in the northwest extension of the pit will have been completed, thus permitting the return of waste material to this area and thereby reducing costs and environmental impacts.
The table below shows annually, since pre-stripping, the mining plan (0.3 g/t AuEq. Cut-off) and the mineralized material feeding plan in the beneficiation plant. A mining plan was adopted that allows the plant to be fed with mineralized material of high gold content equivalent in the first years of production, storing low-grade mineralized material (LG) to be fed later. This allowed the elaboration of a plan optimizing the economic model of the project. The mining strip ratio results in an average value of 2.12.
Table 8: Cabaçal mining schedule
| Year | Mining Schedule | Low Grade Stockpile Balance | Plant Feed | |||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| ROM (Mt) | Au (g/t) | Cu (%) | Ag (g/t) | Waste (Mt) | Total Mov (Mt) | LG Stock (Mt) | Au (g/t) | Cu (%) | Ag (g/t) | Plant Feed (Mt) | Au (g/t) | Cu (%) | Ag (g/t) | |
| Pre-Stripping | 0,45 | 3,22 | 0,10 | 0,32 | 2,32 | 2,77 | 0,04 | 0,41 | 0,11 | 0,34 | ||||
| 1 | 2,32 | 1,87 | 0,32 | 1,23 | 5,90 | 8,22 | 0,27 | 0,17 | 0,22 | 0,67 | 2,50 | 2,30 | 0,29 | 1,13 |
| 2 | 4,85 | 0,67 | 0,32 | 1,03 | 9,86 | 14,72 | 2,63 | 0,16 | 0,24 | 0,71 | 2,50 | 1,16 | 0,40 | 1,33 |
| 3 | 2,55 | 1,07 | 0,38 | 1,41 | 12,30 | 14,85 | 2,68 | 0,16 | 0,24 | 0,71 | 2,50 | 1,09 | 0,39 | 1,43 |
| 4 | 2,68 | 0,76 | 0,41 | 1,65 | 11,89 | 14,56 | 2,86 | 0,16 | 0,23 | 0,71 | 2,50 | 0,81 | 0,43 | 1,72 |
| 5 | 2,51 | 0,57 | 0,42 | 1,73 | 10,15 | 12,66 | 2,87 | 0,16 | 0,23 | 0,71 | 2,50 | 0,57 | 0,42 | 1,74 |
| 6 | 2,43 | 0,99 | 0,45 | 1,75 | 4,59 | 7,03 | 2,81 | 0,16 | 0,23 | 0,71 | 2,50 | 0,96 | 0,44 | 1,71 |
| 7 | 2,43 | 0,60 | 0,31 | 1,27 | 4,59 | 7,03 | 2,74 | 0,16 | 0,23 | 0,71 | 2,50 | 0,59 | 0,31 | 1,25 |
| 8 | 2,44 | 0,47 | 0,25 | 0,97 | 4,61 | 7,05 | 2,67 | 0,16 | 0,23 | 0,71 | 2,51 | 0,47 | 0,25 | 0,97 |
| 9 | 2,41 | 0,41 | 0,20 | 0,92 | 4,55 | 6,96 | 2,61 | 0,16 | 0,23 | 0,71 | 2,48 | 0,41 | 0,21 | 0,92 |
| 10 | 2,43 | 0,42 | 0,24 | 1,09 | 4,59 | 7,03 | 2,54 | 0,16 | 0,23 | 0,71 | 2,50 | 0,42 | 0,24 | 1,08 |
| 11 | 2,20 | 0,61 | 0,29 | 1,18 | 4,99 | 7,19 | 2,24 | 0,16 | 0,23 | 0,71 | 2,50 | 0,56 | 0,29 | 1,14 |
| 12 | 2,21 | 0,82 | 0,31 | 1,37 | 5,00 | 7,21 | 1,95 | 0,16 | 0,23 | 0,71 | 2,50 | 0,74 | 0,30 | 1,32 |
| 13 | 2,20 | 0,66 | 0,24 | 1,01 | 4,99 | 7,19 | 1,66 | 0,16 | 0,23 | 0,71 | 2,50 | 0,60 | 0,24 | 0,98 |
| 14 | 2,20 | 0,64 | 0,15 | 0,62 | 4,99 | 7,19 | 1,36 | 0,16 | 0,23 | 0,71 | 2,50 | 0,58 | 0,15 | 0,61 |
| 15 | 2,20 | 0,52 | 0,15 | 0,69 | 4,99 | 7,19 | 1,07 | 0,16 | 0,23 | 0,71 | 2,50 | 0,48 | 0,15 | 0,68 |
| 16 | 2,32 | 0,21 | 0,26 | 1,29 | 2,60 | 4,92 | 0,89 | 0,16 | 0,23 | 0,71 | 2,50 | 0,20 | 0,26 | 1,24 |
| 17 | 2,32 | 0,46 | 0,30 | 1,36 | 2,59 | 4,91 | 0,71 | 0,16 | 0,23 | 0,71 | 2,50 | 0,44 | 0,30 | 1,31 |
| 18 | 2,32 | 0,52 | 0,30 | 1,19 | 2,59 | 4,91 | 0,53 | 0,16 | 0,23 | 0,71 | 2,50 | 0,49 | 0,29 | 1,15 |
| 19 | 2,32 | 0,30 | 0,38 | 1,71 | 2,59 | 4,91 | 0,35 | 0,16 | 0,23 | 0,71 | 2,50 | 0,29 | 0,37 | 1,64 |
| 20 | 2,32 | 0,46 | 0,53 | 2,53 | 2,60 | 4,92 | 0,18 | 0,16 | 0,23 | 0,71 | 2,50 | 0,44 | 0,51 | 2,41 |
| 21 | 2,43 | 0,32 | 0,34 | 1,53 | 2,13 | 4,56 | 0,12 | 0,16 | 0,23 | 0,71 | 2,49 | 0,32 | 0,34 | 1,51 |
| 22 | 2,43 | 0,24 | 0,26 | 1,31 | 2,13 | 4,56 | 0,06 | 0,16 | 0,23 | 0,71 | 2,49 | 0,23 | 0,27 | 1,31 |
| 23 | 0,61 | 0,19 | 0,39 | 2,25 | 0,53 | 1,14 | - | - | - | - | 0,67 | 0,18 | 0,35 | 2,05 |
| LOM | 55,59 | 0,64 | 0,31 | 1,31 | 118,08 | 173,68 | 55,59 | 0,64 | 0,31 | 1,31 |
Figure 5: The final pit shell of the Cabaçal mine.
METALLURGICAL TESTING
- Testwork supports production of a high-grade copper concentrate of 28.4% with payable gold and silver;
- High metallurgical recoveries of 87.39% for gold and 92.4% for copper;
- Circa 30 % of gold recovered via a gravimetric circuit;
- Copper flotation is effective;
- Rougher concentrate is reground to 40 microns prior to cleaning to enhance grades and recoveries; and
- Waste rock and mill tailings projected to be non-acid generating.
In 2022, Meridian selected samples from seven metallurgical drill holes to confirm historical Cabaçal process performance in a testwork program at SGS Lakefield, Canada. The holes provided samples from the four known main VMS systems at Cabaçal and most of the samples were within the expected head grade range for the deposit. A key feature of the Cabaçal mineralization is the low S:Cu ratio, which implies low pyrite/pyrrhotite content. The average feed would be expected to be ~ 1.5 S:Cu which confirms the historical mineralogy, suggesting that chalcopyrite is about 65% of the sulphides in the sulphide assemblage. Comminution tests were conducted. The average Bond Work Index was 11.2 which is considered to be relatively soft and not atypical for VMS deposits. The average Abrasion Index was 0.28 which suggests moderate abrasion. Samples were considered to be of medium to hard competency for SAG milling (average SMC A x b was 44.5). A three stage Gravity Recoverable Gold (“GRG”) test was conducted on the Master Composite sample. The final GRG number is 64.3, which is considered quite high and is an indication that this material is amenable to gravity gold recovery. It is anticipated that gold not recovered in the gravity circuit will be picked up in the downstream flotation circuit. Rougher conditions for flotation testwork used natural pH, potassium amyl xanthate (“PAX”) collector and Methyl Isobutyl Carbinol (“MIBC”) frother. Sulphur recovery was typically around 95% leaving a non-acid generating tailing, which was typically less than 0.1% in sulphur content. Mass pull for the Master Composite was around 5 to 6 percent by weight. The rougher flotation was conducted mostly in solids percent around 35%. The slope between recovery and concentrate grade is quite flat, which indicates that the Cabaçal mineralization could produce higher grade concentrates. A 24.8 % copper concentrate was produced with 94.4% copper recovery, 87.2% gold recovery (gravity + float) and 81.9% silver recovery (gravity + float). The recoveries achieved are in line with the historic metallurgy. A pyrite concentrate was produced from the cleaner tailings to remove the acid generating minerals. The concentrate assayed 44% of sulphur with notable levels of gold and silver which could have market potential.
A gravity circuit recovers the free gold which is converted to a doré product for sale. The sulphide minerals including copper, in the form of chalcopyrite, and associated gold and silver will be recovered by rougher flotation. The rougher concentrate is reground to 40 microns to separate the gangue material and lime is added to suppress the pyrite. The rougher and cleaner tails are expected to be low in sulphides, therefore non-acid generating and are combined for disposal together in a dry stacked facility. The pyrite float will either be sold or separately stored.
MINERAL PROCESSING
- 2.5Mtpa mill capacity designed with conventional flowsheet;
- P80 grind size of 200 micron and moderate to soft rock hardness requires only a SAG mill and 1 stage crushing.
Based on the SGS testwork results, Ausenco designed a new process plant to process 2.5Mtpa of run-ofmine (ROM) feed from the Cabaçal open pit. The process comprises crushing and grinding to reduce the RoM material to a characteristic grind (P80) of 200 microns (µ). Cleaning then occurs in a Jameson cell followed by a single stage cleaner flotation cell. The Process flowsheet is illustrated in Figure 6.
Figure 6: Cabaçal Process flowsheet diagram
Figure 7: Cabaçal process plant layout
ACCESS AND INFRASTRUCTURE
Infrastructure associated with the historic Cabaçal Mine has been removed from site, aside from some old buildings which are being converted to field offices and core processing / storage facilities. The PEA therefore assumes that the new Cabaçal mine is effectively a greenfields project.
Cabaçal is well supported by existing public infrastructure. It is located in the State of Mato Grosso, Brazil. It is accessed by sealed roads approximately 320 km west-north-west of the state capital Cuiabá, then a 30km all-weather gravel road from the Company’s administrative base in the town of São José dos Quatro Marcos.
The region is currently supplied by a high-voltage 34.5kV power line. Several hydroelectric power stations operate in the region. A potential route for the construction of an electric line of sufficient capacity for the Cabaçal project from the Araputanga substation to the Project area has been identified, extending over 21 km.
Subject to permitting, water is potentially available from the nearby Cabaçal river. The process facility aims to recover and re-use as much process water as possible. All rainwater that comes in contact with mining operations is planned to be collected and either used on site or treated to required standards then released.
Mine services and labour are readily available, primarily from nearby towns.
The Cabaçal site plan is shown in Figure 8. The major project facilities include the open pit mines, tailings management facility (TMF), waste rock facilities, mine services and access roads. Site selection took into consideration the following factors:
- Locate the process plant on competent flat ground and in an area with minimal potential to be mineralized;
- Locate the process plant and other facilities at a safe distance from the mine pit and blasting operations; and
- Locate the process plant and waste storage facilities to minimise transport distances.
Figure 8: Cabaçal mine site layout
Several areas have been identified to store waste rock from the mine. Three waste rock storage facilities (WRSF) have been identified in the PEA. The tailings will be filtered to produce a dry cake that will be trucked from the filter plant and stacked in two DSTFs. The DSTFs have been design to international standards for the PEA. Initial studies indicate that waste rock and tailings are potentially non-acid generating. Detailed waste material characterisation studies are planned for optimization of the longterm storage facility design for construction, safe operation and eventual closure.
ENVIRONMENTAL, PERMITTING & STAKEHOLDER ENGAGEMENT
Meridian commenced baseline environmental and social impact data collection in January 2022. Meridian has engaged the Sete Soluções e Tecnologia Ambiental Ltda to undertake environmental studies, Hidrovia Hidrogeologia e Meio Ambiente Ltda has been engaged to undertake hydrogeological studies and Totem Consultoria em Arqueologia Ltda has been engaged to perform archaeological studies of the Cabaçal project area. These studies are ongoing and expected to be completed this year to enable the permitting application process to commence later this year.
Meridian also undertakes its own stakeholder engagement processes which commenced on acquiring the Cabaçal project in 2021. The Cabaçal project is located within farming land, with no artisanal mining activity. Aside from local farmhouses, there are no settlements or population clusters within the project's active area. The nearest indigenous land is located 80km distant from Cabaçal to the northwest (Terra Indígena Figueiras). The project is located more than 25 km away from areas classified as Quilombolas (settlements first established by escaped slaves in Brazil, whose descendants have recognized land rights).