PERTH (miningweekly.com) – A prefeasibility study (PFS) into the Jambreiro iron-ore project, in Brazil, has estimated that the project would require a capital investment of A$59.8-million.
ASX-listed Centaurus Metals on Friday noted that the one-million-tonne-a-year operation is expected to have an initial mine life of 18 years, and would deliver high-grade, low-impurity sinter product.
The PFS estimated life-of-mine revenues of more than A$1-billion, and earnings before interest, taxes, depreciation and amortisation of A$533-million, with average annual operating cash flows anticipated at A$29.6-million.
The study estimated a post-tax net present value of A$114.9-million and an internal rate of return of 32%, based on a mine gate domestic iron-ore price of $41/t.
“The results of the 2019 PFS have confirmed that Jambreiro is a financially robust, long-life, development-ready project which is ideally placed to capitalise on the changed iron-ore market environment that has emerged both domestically in Brazil and internationally in the past six months,” said Centaurus MD Darren Gordon.
“The PFS clearly shows that Jambreiro is a quality project, with strong technical fundamentals and robust financial returns forecast from an initial 18-year mine life, based on the friable mineralisation only. The strong economics are underpinned by low operating cash costs, forecast at just A$29/t of final product, which reflect the low stripping ratio, the free-digging nature of the friable material, and the extent of natural liberation of the ore.”
Gordon on Friday said that while a detailed bankable feasibility study (BFS) would be required to advance all elements of the Jambreiro project to a stage that could support debt financing, the company expected a large portion of the capital and operating costs included in the PFS would be rolled forward into the BFS without much more work, given the high level of confidence Centaurus had in the process flowsheet, and the cost of key capital and operating inputs.
“In parallel, we are advancing product offtake discussions with both domestic consumers and international export traders. The recent change in the supply dynamic, both domestically and internationally, is driving a strong and sustained demand for the Jambreiro product, and we are aiming to have agreements in place in line with the delivery of a bankable feasibility study.”