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Meridian takes up TSX-V listing as it prepares for two-pronged BMC exploration approach

29th November 2016

By: Henry Lazenby

Creamer Media Deputy Editor: North America

  

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VANCOUVER (miningweekly.com) – Amsterdam, Netherlands-based Meridian Mining has completed its acquisition of Canadian junior Cancana Resources, the companies announced Monday – a deal that is expected to streamline the ownership structure of Cancana and Meridian's joint venture (JV) exploration and development project Brazil Manganese Corp (BMC).

BMC is focusing its efforts on becoming a manganese producer in Brazil’s state of Rondônia, where it is producing manganese oxide under exploration licence.

“Meridian is employing a two-pronged strategy at BMC, where the primary objective is to advance a manganese exploration initiative in parallel with pilot production of high-grade manganese, while also expanding a multicommodity regional exploration programme,” Meridian president and CEO Anthony Julien told Mining Weekly Online in a recent interview.

During the period ended September 30, Cancana had entered a letter of intent and subsequently a definitive agreement with its JV partner Meridian Mining, whereby Meridian acquired all the issued and outstanding common shares of Cancana in exchange for shares of Meridian under a statutory plan of arrangement under the Business Corporations Act of British Columbia.

The BMC project is expected to benefit both from improved access to financing for its development and operational synergies because of the unified ownership pursuant to the arrangement,” Julien explained.

TSX-V LISTING
Meridian Mining on Monday took up a listing of its common shares on the TSX-Venture Exchange, trading under the symbol ‘MNO’.

Under the arrangement, Meridian has issued 17.97-million shares to Cancana shareholders, at an exchange ratio of 0.40 Meridian common shares for one common share of Cancana. As a result, there are 151.08-million common shares outstanding, of which 133.1-million, or about 88%, are owned by the Sentient Global Resources Fund IV Limited Partnership.

"Going forward, this better positions us to act on an array of pilot production and exploration initiatives for manganese, gold and tin in the prolific, but underexplored, region of Rondônia,” Julien stated.

At a grade of 51% manganese, Julien noted that BMC’s output is the highest-grade and purest product in the world, opening premium-priced niche market opportunities in the fertiliser, battery, welding and pigments markets, aside from the steelmaking industry that usurps the lion’s share of output.

PRODUCTION UPDATE
Julien stressed to Mining Weekly Online that the operating BMC subsidiary has been focused on streamlining the existing operation since 2015, with the latest results indicating strident success.

Production for the three-month period ended September 30, was 13 445 t of manganese product, a 52% increase compared with 6 976 t in the comparative quarter of 2015. Production for the year to September 30, was 21 176 t.

During the quarter BMC started mining from the Ademir-Califórnia prospect area. Of the total production, 6 453 t were produced at the Rio Madeira plant and 6 892 t were produced at the Jaburi plant. 

BMC also completed operational improvements and rehabilitation during the period. BMC continued investing in plant improvements, including revamping water recovering ponds, electrical reform of selected areas in the plants and replacement of water pipes at the Jaburi plant.

BMC also completed the environmental rehabilitation of all areas mined during 2015.

Both plants are currently fully operational heading into the 2016 dry season. The company is also installing a sample preparation facility at its stockyards in Espigão do’Oeste. This will reduce freight costs and turnaround time for its stockpile and exploration samples.

Meridian continues to evaluate future optimisation scenarios identified through the 2015 site audit conducted by Ausenco. Küttner Engineering has been engaged to construct a pilot plant at a cost of about C$4.1-million, as part of ongoing optimisation and efficiency trails because of these reviews. Julien expects the plant to be operational by April next year.

BMC had recently increased output by successfully commissioning a new dry screen.

"This is an important development, as our marketing team has identified opportunities for domestic and export sales contracts of up to 50 000 t for our high-quality manganese oxide product. The increased capacity coupled with progressive sales of our 2015 and 2016 inventory has allowed us to accelerate sales plans, ahead of further plant improvements scheduled to commence in the fourth quarter on the Jaburi plant,” Julien stated.

EXPLORATION OUTLOOK
BMC’s multicommodity team has continued its programme of stream and soil geochemistry, developing targets for gold and tin mineralisation on its licences.

Meridian VP of business development Mike Bennett noted that the BMC project area is located on the south-west margin of the Amazon craton, which hosts several Proterozoic gold and tin provinces.

“Activity continues to focus on testing for drainage anomalism, through a pan concentrate sampling programme, with progressive follow-up with soil geochemistry in two prioritised areas. Soil surveys are being conducted on a 400 m x 50 m reconnaissance grid, with infill of anomalous areas on a 100 m x 25 m pattern. The survey programme remains in progress in parallel with scout geological mapping to develop targets for trenching and drilling,” he explained.

Julien said next steps included ground geophysical programmes which are scheduled to restart in the current quarter, to optimise target selection for thickened vein zones for the manganese trenching and drilling programme.

The pan concentrate multicommodity programme will also continue to be expanded to define the full extent of anomalies, complemented by infill soil sampling to be conducted to enhance target definition in known gold anomalous areas for follow-up trenching, and eventual drilling.

Once the gold programme has advanced, the multicommodity team will refocus on the evaluation of the tin potential within its licences and regionally. The state of Rondônia had been a significant producer of tin. BMC will apply a similar geochemical approach to evaluate the granite stocks identified with a prospective tin signature from its initial reconnaissance programmes, Julien stated.

Edited by Creamer Media Reporter

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