Australia's Crusader to invest $400 mln in Brazil gold mine-paper

* Australian company has spent $15 million on project

* Project to be one of biggest gold mines in Brazil

RIO DE JANEIRO, May 22 (Reuters) - Australia’s Crusader Resources Ltd. plans to invest $400 million in a gold mining project in Brazil’s northeastern state of Rio Grande do Norte, the Valor Economico newspaper reported on Tuesday.

The mine in Currais Novos, Brazil, is expected to produce 5 tonnes (145,833 troy ounces) of gold a year for 10 years and become one of the biggest gold mines in Brazil, the newspaper said, citing Robert Smakman, the Sydney-based company’s global executive president.

The mine was purchased for $2.4 million in 2010 and Crusader has invested $15 million in the project to date, Valor said.

The expected extraction cost is $700 an ounce and the mine has an estimated gold content of 1.2 grams per tonne of rock, the newspaper said, citing Smakman.

Crusader bought the mine from a company that had purchased the property from Brazilian billionaire Eike Batista, the paper reported.

Crusader’s shares rose 5.43 percent to 68 Australian cents in trading in Sydney on Tuesday.

Gold fell for a second day, slipping 0.7 percent to $1,581.54 an ounce. (Reporting by Jeb Blount; Editing by Maureen Bavdek)