TSX-listed Cerrado Gold has extended the completion date of the bankable feasibility study (BFS) at its high-grade Mont Sorcier iron-ore and vanadium project, in Quebec, Canada, to review numerous optimisation and trade-off opportunities that have been identified as having the potential to materially enhance the overall value of this project.

The feasibility study was undertaken by Cerrado Gold subsidiary Voyager Metals, and identified several opportunities to further optimise the project economics and reduce both capital and operating costs, despite ongoing industry-wide inflation.

Cerrado also notes that numerous trade-offs are expected to be completed to evaluate and capture these improvements.

The company adds that the most significant opportunity to enhance the Mont Sorcier project has emerged from the ongoing mine planning process through a conversion of a modest amount of currently inferred resources to measured resources within the defined area to the east of the planned mine pit.

Further, Cerrado highlights that the material in this region is expected to be shallower and could materially reduce stripping and tailings management costs over the life-of-mine (LoM).

A small, targeted definition drill programme in the third quarter of this year will be undertaken to ensure resources that may be converted from inferred to measured are incorporated into the optimised mine plan.

The company also highlights that additional detailed review and trade-off studies will be undertaken with respect to overall capital and operating expenditure estimates, which are currently seeing a material impact from rising inflationary pressures in the iron-ore and green steel market.

Given these pressures, Cerrado will focus on LoM tailings dam construction and other project infrastructure needs to reduce the overall size and construction material required.

Additionally, the company notes that while the current metallurgical testwork supports the ability to produce 67% higher-grade concentrates desired by the green steel industry, the current price premium to the premium offered to 65% concentrate may not be sufficient to justify the additional capital and operating cost requirements to deliver the 67% product.

Currently, Cerrado notes, the 67% concentrates garner about a $20/t premium to the 65% Index as published by leading industry forecasters, subject to specific concentrate characteristics.

The lower price, the company adds, would be offset by a higher weight recovery in the concentrator plant to deliver higher levels of production with a simplified flow sheet, reducing capital and operating costs.

Overall, Cerrado views this step as a prudent investment to optimise the project for all stakeholders.

“We believe this is the right course of action and are confident that the opportunities identified will have a material impact on the value of the project.

“Furthermore, the optimisation programme is not expected to materially impact the overall project timeline, which is driven by the environmental- and social-impact assessment submission date, which we now expect will be submitted in the second quarter of 2027 as a result of these changes,” Cerrado CEO and chairperson Mark Brennan comments.