THE BOURSE WHISPERER: Brazilian Metals Group has entered into an agreement with Larf Consultoria e Administracao Ltda to acquire 100 per cent of the Carrapato iron deposit, situated in the Quadrilátero Ferrífero (Iron Quadrilateral) close to Belo Horizonte, Minas Gerais State, Brazil.
“This acquisition is a significant step in the company’s strategy to complement its existing large scale iron projects in Northern Minas Gerais with smaller scale, high grade projects with near term production potential,” Brazilian Metals Group said in its announcement to the ASX.
“The company is also reviewing some other opportunities in the region that meet these criteria.”
Location of Carrapato tenement, Itaminas Sarzedo Mine to the east;
Vale’s Corrego do Feijao mine to the south. The tenement is about 1000
metres wide east-west. Source: Company announcement
The Carrapato project adjoins, and is an extension of, the Sarzedo mine currently operated by Itaminas.
The Sarzedo mine has a reported resource of 1.3 billion tonnes and was recently sold to Chinese state-backed East China Mineral Exploration and Development Bureau (ECE), for $1.2 billion.
The project is in a good neighbourhood located immediately adjacent to the Corrego do Feijao mine of international mining house Vale.
The Corrego do Feijao mine produced direct ship iron ore at a grade of 66.6 per cent iron.
Continuity of the mineralisation from the Sarzedo and Corrego do Feijao mines into the Carrapato project area has been confirmed and a significant iron ore deposit has also been delineated.
Brazilian Metals indicated the project’s proximity to domestic steel mills and rail infrastructure will enhance its future domestic or export options for early development of a significant iron ore operation.
The company has established an Exploration Target of 53 to 62 million tonnes at 35.2 per cent to 41.1 per cent iron including a high grade zone at surface of 3.7 to 4.3 million tonnes at 51.1 per cent to 59.7 per cent iron.
Following due diligence the company plans immediate pre-feasibility studies leading to an application for a Special Mining Permit and early production.