South America’s “largest and most advanced” platinum group metals (PGMs) and nickel project, Pedra Branca in Brazil, is being sold to Canadian entity ValOre Metals for £4.1-million, London-listed Jangada Mines announced on Tuesday.
The company explained that while it continued to believe in the technical and economic prospects of Pedra Branca, there had been limited support in the UK financial markets for financing a PGMs project.
“The support that Jangada has experienced is diametrically opposite to both the independent experts' value of the underlying assets and the level of support given to projects with similar asset suites on other bourses,” the company said in a media statement.
Jangada’s board said Canada, where ValOre is listed on the TSX-V, should provide stronger support for the project. As part of the proposed transaction, which comprises cash and shares, ValOre would undertake an equity raise of at least C$3-million, which would be used to fund the project through its next stage of development.
Jangada would have an interest of about 33% in the share capital of TSX-V-listed ValOre and would appoint two nominees to ValOre’s board.
Last year, Jangada reduced Pedra Branca's total capital cost estimate by 32%, following the refinement and optimisation of the process flowsheet. The project’s total capital expenditure (capex) fell from an estimated $64.9-million in the preliminary economic assessment (PEA), to $43.9-million, of which the plant capex is $33.8-million ($54.2-million previously).
Meanwhile, Jangada would hold on to its Ptombeiras vanadium project, for which there was a strong appetite among UK and international investors. A recent drilling campaign has confirmed the presence of a high-grade deposit with the potential for significant resource delineation.
The Ptombeiras project would receive a significant cash injection with the sale of the PGMs project.
ValOre is a Vancouver based company with a portfolio of uranium and precious metal exploration projects in Canada.