Centaurus Metals (ASX: CTM) has released a maiden JORC Reserve of 49 million tonnes at 28.2% iron for the Jambreiro Iron Ore Project in Brazil, with a Bankable Feasibility Study (BFS) set to commence.
Strong results from the Pre-Feasibility Study at the project have led Centaurus to immediately approve the commencement of a BFS, which is scheduled to be completed by the end of the September quarter, 2012.
An Environmental Impact Assessment for the Jambreiro is well advanced, and is expected to be lodged with Brazil’s Environmental Approvals Department in February 2012.
With this latest milestone under its belt, Centaurus is on track to commission Jambreiro in the December 2013.
Jambreiro has an existing Resource of 116.5 million tonnes at an average grade of 26.8% iron, including near-surface friable and underlying compact mineralised components.
Initial discussions with potential customers indicate there will be solid demand for Centaurus’ high quality, low impurity iron product, particularly within Brazil’s domestic steel industry.
The Measured and Indicated components of the friable resource, comprising 52.1 million tonnes at 28% iron, were considered in establishing the Reserve, leaving Measured, Indicated and Inferred Resources of 64.6 million tonnes at 25.8% iron outside the Reserve.
Metallurgical testwork indicates an initial 17.1 million tonnes of high quality hematite concentrate grading 66.6% iron, 2.8% silicon and 0.7% aluminium can be produced from the Reserve.
The Reserve is sufficient for an 8.5 year operation at a production rate of 2 million tonnes per annum, generating revenues of $1.25 billion and earnings before interest, tax, depreciation and amortisation of $858 million.
Further reverse circulation drilling is planned to upgrade reserves for the first four years of planned mine life into the Proven category and provide samples for a pilot plant testwork program.
With a low life-of-mine strip ratio of 0.94:1 and the free dig nature of the friable ore, Centaurus will be able to keep capital costs low, allowing for greater profit margins.