Centaurus acquires Brazilian iron ore project

THE BOURSE WHISPERER: Centaurus Metals has acquired a portfolio of tenements in south-eastern Brazil known as the Serra do Lontra project.

The company views the acquisition to be the initial basis of its strategy to export one to two million tonnes per annum of high-grade hematite to international markets by mid-2014.

The Serra do Lontra project is located 140 kilometres via sealed road from the major regional export port of Ilhéus, in the State of Bahia, Brazil.

It consists of 12 tenements; 1 being a granted Exploration Licence which the company has acquired and the other 11 being Exploration Licence Applications made by Centaurus.

Centaurus said it expected the Exploration Licence Applications should be granted within 6 months.

Under the terms of the acquisition, Centaurus will pay a total of US$3 million for the Granted Exploration Lease, with an initial payment having already been made concurrent with the transfer of title to the company.

Further payments are to be made over an 18 month period based on the progress of the exploration activities on the Granted Exploration Lease.

In establishing the Exploration Target of 30 to 50 million tonnes, Centaurus stressed it has only mapped the outcropping iron formation on the Granted Exploration Lease at this time, not the entire project.

This has occurred over a strike length of some 1.5 kilometres on the main target of Serra Pelada and over 0.5 kilometres on the secondary target of Boa Esperança with solid mineralisation widths of 40 to 55 metres.

Based on this initial geological mapping of the outcropping itabirite mineralisation, limited surface sampling and the comparison of the mineralisation to Centaurus’ existing itabirite projects in Brazil, the company has estimated the outcropping itabirite mineralisation will grade between 35% and 45% iron and beneficiate to a high grade (+64%) hematite product.

Centaurus will focus its initial exploration activities on the Granted Exploration Lease with a view to defining a JORC Resource which it can develop into a project capable of producing iron ore for international export markets.

Approvals work, both environmental and mining, will commence immediately.

“We are delighted to have secured Serra do Lontra as an initial project to commence implementation of our export strategy in Brazil,” Centaurus Metals managing director Darren Gordon said in a company announcement.

“Based on the field visits undertaken during due diligence, the geological mapping work completed to date, and the fact that there is significant outcropping mineralisation at Serra do Lontra, we are confident that our exploration work will confirm the Project’s Exploration Target to support an export business from Brazil.

“The high grade hematite produced in Brazil is highly sought after by international markets and the fact that Serra do Lontra is close enough to the coast to truck ore to open access port facilities will allow us to generate strong export market returns off a relatively low capital base.

“We look forward to commencing exploration activities including ground magnetic survey work in the next 4 weeks.”