It said the target was an alluvial plain on Rico Creek, which drained the giant Paracatu gold deposit owned by Kinross.

Kinross took full ownership of the long-life mine, also known as Morro do Ouro, in December 2004 and it produced 359,959 gold-equivalent ounces last year.

"Our multifactorial analysis had predicted a high probability for gold in this mineral right, and now drilling has confirmed it," Brazil Minerals CEO Marc Fogassa said.

The company said initial drilling had struck gold in multiple holes and gold particles were obtained and confirmed in pan concentrates in samples taken.

Brazil Minerals had a working capital deficit of US$1.45 million at the end of December and this week said it needed additional time to file its March quarterly report.

The company has two working recovery plants for diamonds and gold in Latin America and said its revenue increased almost 225% in 2017, year-on-year, to $43,253 due to higher processing volumes.

However it said mining was very limited in 2017 due to capital equipment being serviced, which had since been resolved.

Shares in the company, which were trading close to $0.03 a year ago, rose 38% or about one-tenth of a cent yesterday to $0.0029.