After being halted in the morning, Belo Sun (BSX:TSX) which is developing the 7.2 million ounce Volta Grande gold  project in Brazil announced that the Federal Court of Appeal in Brasilia ruled that the company's preliminary licence is fully valid and in force.

Shares are up 14% on 905,000 shares traded since resuming after the news this morning.

This award overturns the decision made by the Federal Judge of First Level in Altamira which, in June, stated that Belo Sun's ability to receive its preliminary license was contingent upon the company completing an indigenous study and other conditions.

Belo Sun was originally granted their preliminary license in February but has struggled to convince investors that their mine can be successfully permitted.  Shares have fallen from highs of $1.80 in late 2012 to the mid teens.

Even with this ruling, the company still needs to apply for an installation license which will allow them to construct the mine.

We have a call into President and CEO Mark Eaton and will update this when we hear back from him.

In June, Sun Valley Gold bought 7 million shares of Belo Sun out of the market at $0.19 per share.  They are already up 30%.

Volta Grande is one of the highest grade undeveloped open-pit projects in the world (only surpassed by Torex's Morelos and Seabridge's Courageous Lake).

In February, the company updated the preliminary economic assessment (PEA) on the Volta Grande project, which outlined a staged approach to developing the project with the expectations that the smaller footprint would both be easier to finance and easier to permit.

Based on the PEA, over a 21 year mine-life, the project is estimated to process nearly 75,000tpd of material with 92.8% gold recovery producing over 167,000 ounces of gold annually at an operating cost of $727 per ounce (including royalties).

The average head-grade on a diluted basis is estimated to be 1.14g/t over the life of mine, but is significantly higher (1.66g/t gold) for the first six years of operation.

Even utilizing a staged approach, the project is still a big build with an estimated initial capex of $328 million and another $308 million in expansion and sustaining capital over the life of the mine.

BSX net asset value (NAV) per share via CIBC

BSX net asset value (NAV) per share via CIBC

Belo Sun had $10 million in cash as of March 31st and currently burns ~$1 million per month, leaving the company with an estimated $6 million today.

Belo Sun trades at a $65 million valuation based on the most recent price of $0.245 per share.

According to Jeff Killeen of CIBC World Markets, Belo Sun has a net asset value of $1.71 per share using a 5% discount rate and $1,300/oz gold (rising to $2.33, $2.96 and $3.58 per share using a $1,400, $1,500 and $1,600 gold price, respectively).

The company is rife with uncertainty surrounding their ability to permit Volta Grande, but as a result Belo Sun offers some of the best leverage in the gold space.

Read: Belo Sun Releases Court of Appeal Decision: Previous License is Fully Valid and in Force