Cleveland converts Brazilian MOU to binding Option Agreements

THE DRILL SERGEANT: Cleveland Mining Company (ASX: CDG) has converted the Memoranda of Understanding (MOU) held over three iron-ore projects in Brazil into binding Option Agreements.

Cleveland explained the Option Agreements allow the company’s recently-formed alliance with BC Iron (ASX: BCI) to acquire up to 80 per cent of the projects from private Brazilian company, Bahmex through earn-in agreements based on staged payments and key project milestones.

The transaction does not require upfront payments prior to drilling.

The Cleveland/BC Iron alliance looked at more than 50 South American iron-ore projects, ranging in stages from exploration to producing mines.

It ultimately selected three projects, comprised of 81 tenements that were packaged together by the vendor, Bahmex.

Cleveland said the projects were selected for further work based on criteria including: geology, community attitudes towards mining, and options for port and rail logistics.

The projects are located in the Brazilian states of Salvador da Bahia (the Caetite and Silvestre projects) and Minas Gerais (the Minas Novas project), covering 272 square kilometres and 1,064sqkm respectively.

 

Source: Company announcement

 

“Bahmex and mining consulting firm Coffey Mining have identified significant exploration potential for the Caetite concessions based on detailed geological mapping, airborne geophysical data interpretation, ground magnetometric surveys, as well as trenching, sampling, chemical analyses and concentration tests,” Cleveland Mining Company said in its ASX announcement.

Cleveland indicated its intentions to commence exploration fieldwork at the Caetite project, estimating two months of detailed mapping, sampling and logistics preparation will be undertaken prior to drilling.

First pass drilling will be carried out with the aim to confirm the depth extend of the highest priority targets, with up to 2000m to be drilled in each state.

The start of fieldwork at the Minas Novas project will be largely determined by timetables for Caetite.

Government aeromagnetic data covering most of the project will be correlated with work already completed by Bahmex.