Cleveland Mining Company (ASX: CDG) is targeting the northern Brazilian state of Amapá in a current acquisition to be paid in cash, as the company considers the area is emerging as the world’s newest address for high‐quality iron ore.
The prospectivity of the area is simply highlighted by the projects surrounding the 1000 square kilometre greenfields tenement package.
In the area is Anglo American (LON: AAL) and Cliffs Natural Resources (NYSE: CLF), Brazilian megaminers Mineração e Metalicos S.A (MMX) and Vale (NYSE: VALE), and is located between Beadell Resources (ASX: BDR) Tucano and Tartaruga projects.
With these major players nearby, this helps the development of infrastructure in the short and medium term.
Current infrastructure in the area includes sealed roads 5 kilometres away, 25 kilometres from a railway, and around 100 kilometres from the port of Macapa.
The town of Ferreira Gomes is 20 kilometres away and a hydro‐electrical power facility is located on the tenement’s southern boundary.
Consideration comprises US$400,000 in cash and another US$1.6 million after 6 and 12 months respectively, following the cessional rights being transferred to Cleveland and environmental permits being published.
Cleveland will also pay the vendor $0.10 per tonne against an Indicated Resource as at the completion of a Definitive Feasibility Study.
A 9% royalty payment also applies quarterly against net profit after interest, and before corporate taxation.
David Mendelawitz, managing director, said “I have personally assessed iron ore projects globally for most of the past decade and am now encouraged that we may have found a location that fits the structural and economic requirements of an emerging iron ore company.
"Amapá is coastal, pro‐mining, subject to sound legislation and taxation, and is politically stable, whilst having good infrastructure and access to low cost, yet skilled labour – all in association with high‐grade iron ore.”