Centaurus secures Brazilian manganese
THE BOURSE WHISPERER: Brazil-focused iron ore exploration play Centaurus Metals has locked-in an exclusive option over a manganese project in the State of Minas Gerais, located in the south-east of the Latin-American country.
Centaurus said the deal places it in the position to further expand the company’s regional manganese exploration portfolio and to also develop a small-scale manganese project to complement its emerging iron ore operations.
The company has secured an option to acquire the Ribeirão manganese project, located 120 kilometres from Gerdau’s 4.5 million tonnes per annum Açominas steel facility, which is 200 kilometres from the export port of Sepetiba and 25 kilometres from the MRS railway line.
One important factor worth noting regarding these port and rail infrastructure features is that both are open access.
“Securing the strategically located Ribeirão manganese project, provides the opportunity to build our manganese portfolio in an area that will allow us to supply the domestic steel industry in Brazil,” Centaurus Metals managing director Darren Gordon said in the company’s announcement to the Australian Securities Exchange.
“With manganese being such a high value commodity, we have the opportunity to supply a customer base in Brazil that simply can’t source enough high quality product and in turn generate healthy returns from a relatively small project base.”
The Ribeirão project comprises three tenements, two with Final Reports approved and one Exploration Lease.
It covers an area of approximately seven square kilometres and was mined artisanally several decades ago from an historic open pit.
Centaurus indicated the project has an exploration target of one to two million tonnes grading 25-33 per cent manganese.
“Manganese, which is in high demand from the local Brazilian steel mills, is a logical and high margin addition to the Centaurus project portfolio in south-eastern Brazil,” the company said in its ASX announcement.
“As a frequently used additive (with few substitutes) in making certain steels, manganese complements Centaurus’ emerging domestic and export iron ore business.”
Under the terms of the Option Agreement, Centaurus will pay US$60,000 for an exclusive six-month option over the project.
During this time it will undertake exploration activities to assess the exploration target and its ability to host an economic manganese project for the nearby domestic steel industry.
Centaurus can exercise the option any time during the six-month period through the payment of an up-front purchase amount and a future Net Smelter Royalty on all manganese production over a specified final product tonnage threshold.
The company has already made a number of field visits for due diligence purposes, which have enabled it to map and sample outcropping manganese mineralisation.
Centaurus said the mineralised zone appears to extend for more than one kilometre outside of the old pit but the widths and grade of mineralisation need to be tested in this area.