PERTH (miningweekly.com) – Australia-based developer Centaurus on Tuesday announced that it would explore opportunities to diversify its asset base in Brazil, while also hunting for joint venture partners or outright buyers for its Candonga direct shipping ore (DSO) or Jambreiro iron-ore projects.

The ASX-listed company told shareholders that while Centaurus remained confident that the Candonga project was capable of generating positive cash-flows, even in the current iron-ore price environment, the miner had been unable to secure the necessary funding to develop the new production capacity.

“This means that, despite the significant progress that has been achieved in advancing the project to a development-ready stage, the company is unable to pursue a standalone development of Candonga at this point in time without the required project development funding being available,” MD Darren Gordon said in a statement.

As a result, the company was looking to extract value from the project through either an outright sale or a joint development.

As part of its efforts to combat the decline of the iron-ore price, Centaurus conducted a review of the 2014 Candonga prefeasibility study, and lowered the expected capital cost from A$3.6-million to A$2.4-million.

The review also increased the life-of-mine revenues from A$36.5-million to A$36.8-million, while the earnings before interest, taxes, depreciation and amortisation over the expected three-year mine life decreased from A$23.1-million to A$20.9-million.

The feasibility study and review were based on a 300 000 t/y DSO operation with a three-year mine life.

Meanwhile, Centaurus reported on Tuesday that the Jambreiro project could also be divested or be subjected to a JV agreement.

The proposed three-million-tonne-a-year project was considered a strategic asset, and Centaurus said that the company had recently received an unsolicited expression of interest in the project, which it was currently assessing.

Furthermore, the iron-ore company noted that it would explore opportunities to diversify its asset base in Brazil to extend further than the iron-ore sector, given the uncertain medium- and long-term outlook for the price of iron-ore.

“While the company has no intention of abandoning its iron-ore assets and remains determined to realise the maximum possible value from these projects for its shareholders, the board is cognizant of the need to create value for its shareholders by investing in commodities and assets capable of being funded and generating a meaningful return within a reasonable time horizon,” Gordon said.

The company currently holds some 437 km² of tenement in Brazil, which included areas prospective for other commodities apart from iron. Centaurus said that it was also aware of a number of project opportunities in the state of Minas Gerais, which could provide diversification and growth opportunities outside of iron-ore.

In addition to its diversification and divestment/JV strategy, Centaurus would also implement a number of additional cost reduction measures, including a 45% reduction in its overall staffing levels, moving to a smaller premises in Brazil to reduce rent to one-third, and salary cuts for key management personnel.

The latest cost cutting measures followed on from the company’s board being reduced from six directors to four, in December last year, and nonexecutive director and nonexecutive chairperson remunerations being cut by one-third.

Gordon had also reduced his remuneration by 10%.