PERTH (miningweekly.com) – Brazil-focused Centaurus Metals has divested its Conquista iron-ore project, to privately held Brazilian company R3M Mineracao.
Under the terms of the agreement, R3M will pay R$500 000, or around A$185 000, to Centaurus by mid-December, and will grant Centaurus a 12% royalty on all future production from Conquista and a number of surrounding exploration tenements that are prospective for iron-ore.
Centaurus MD Darren Gordon said on Friday that the company as pleased to crystallise value from its Conquista project, with R3M ideally placed to take the asset forward, given it is already operational in the immediate region at the nearby Candonga direct shipping (DSO) ore project.
“R3M understands the domestic iron-ore and pig iron markets and see the potential to bring niche DSO assets into production relatively quickly,” Gordon said.
“Importantly, for Centaurus, we will maintain exposure to the success of the project and its potential future cash flows via a strong production royalty.”
Gordon said that assuming the project ultimately reached production levels similar to those seen at Candonga, and based on the current exploration target, the project had the potential to deliver significant value even with conservative assumptions on average mine gate sales prices over the near future.
Conquista has an exploration target of between 3.5-million and 8-million tonnes of high grade DSO, grading between 64% and 67% iron, and a further 20-million to 40-million tonnes of itabirite mineralisation, grading 35% to 45% iron.
Outside of the Conquista project, Centaurus will retain full ownership of the larger Jambreiro iron-ore project, which is fully licensed for a production of three-million tonnes a year.
The company is currently looking at joint venture arrangements for the development of this project, in which Centaurus would be free-carried to production while continuing to focus its exploration efforts on base metals projects.