PERTH (miningweekly.com) – Brazil-focused Centaurus Metals will re-assess the development options at its Jambreiro iron-ore project, which is fully permitted and licensed for three-million tonnes a year of production.
Centaurus on Thursday said that it would update the Jambreiro feasibility study on the back of a number of changes and marked improvements in the iron-ore market, which includes higher prices for the premium 62% iron-ore, the lower availability of high-grade iron-ore in the Brazilian domestic market, and greater access to open-access ports, logistics and infrastructure compared with 2013, when the initial feasibility study was undertaken.
The initial feasibility study estimated that, at a production rate of one-million tonnes a year, Jambreiro would require a capital investment of A$53-million, delivering total revenues of A$750-million over an 18-year mine life.
However, Centaurus noted that since the start of December last year, the price of 62% iron products had increased by 25% in US dollar terms, and with the ongoing uncertainty regarding Brazilian iron-ore exports, the pricing level could be maintained well into 2019.
The ASX-listed company said that it has received a number of inquiries from potential partners expressing interest in the Jambreiro project, in order to secure an equity interest in the project by funding the capital required to develop it.
In order to assist the funding to rework the feasibility study, Centaurus has raised A$2.2-million through a share placement under which 400-million shares will be issued at a price of 5.5c each.
An additional 400-million attaching options will also be issued, with an exercise price of 1.2c each and an expiry date at the end of May 2021.
Centaurus MD Darren Gordon told shareholders that the Jambreiro project was ready for development, and given the current strong iron-ore market and a number of positive trends in market conditions, and the strategic environment for domestic iron-ore projects in Brazil, the company believed the timing was right to update the feasibility study and potentially fast-track Jambreiro towards production.
“Discussions with potential project partners are continuing and we believe the renewed positive market conditions will also allow these partnering discussions to be progressed in line with the feasibility study review. New opportunities, not available to the company in 2013, have also emerged to access logistics and infrastructure for export markets with these opportunities to now be investigated as part of the review work.”