Brazilian Metals Group (ASX: BMG) entered an agreement to acquire the near term Carrapato iron deposit in Brazil, which will complement the company’s existing large scale iron projects.
The acquisition is a step forward for Brazilian Metals in its strategy of picking smaller scale, high grade projects with near term production potential to complement the Northern Minas Gerais projects.
Carrapato is an extension of the 1.3 billion tonne Sarzedo Mine, which was recently sold to East China Mineral Exploration and Development Bureau for $1.2 million, and is immediately adjacent to Vale’s Corrego do Geijao Mine, which produced direct shipping iron ore at 66.6% iron.
An exploration target for Carrapato has been set at between 53 and 62 million tonnes, at grades of 35.2% to 41.1% iron. This includes a high grade zone at surface of 3.7 to 4.3 million tonnes at 51.1% to 59.7% iron.
The project’s proximity to domestic steel mills and rail infrastructure offers options for early development for the domestic or export markets.
Brazilian Metals will commence Pre Feasibility Studies at Carrapato immediately following due diligence, with the aim of achieving early production.
The company will pay US$38 million over four years in consideration for the acquisition.
Minas Gerais Resource
Late last year Brazilian Metals Group delivered a maiden iron JORC Resource of 459 million tonnes for the company’s operations in Minas Gerais.
The breakdown of the resource estimates which is based on 41 diamond holes for 6800 metres and 22 reverse circulation holes for 2500 metres is:
- 230 million tonnes at 19.0% iron in the Measured category;
- 166.5 million tonnes at 16.7% iron in the Indicated category; and
- 62 million tonnes at 17.5% iron in the Inferred category.
Following the delineation of the resource, Brazilian Metals commenced metallurgical test work on the diamond core and beneficiation characteristics.