Candonga project seeks sale or partner

0 Comment
 28 Apr 2015   Posted by admin


Centaurus Metals is seeking to sell or find a partner for its Candonga project

By Rachel Dally-Watkins

28 April, 2015

IN response to the significant fall in iron ore prices, Centaurus Metals has announced it is unable to pursue standalone development of its Candonga project in southeast Brazil, and would instead pursue opportunities to sell or seek a joint venture partner.

Centaurus reviewed the results of its 2014 feasibility study for the direct shipping ore project, confirming the technical and financial viability of the 300,000 tonne per annum project even with the significantly lower current iron ore prices.

The review resulted in a 47 per cent reduction in direct pre-capital cost to $1.9 million and a reduction of total CAPEX to $2.7 million, and Centaurus stated it was confident the project was capable of producing positive cash-flow, even at current prices.

However it stated the “extremely negative global market sentiment towards the iron ore sector has made it very challenging to finance the development of any new production capacity anywhere in the world, even for low CAPEX and niche market projects like Candonga”.

“The attractive economic fundamentals of the Candonga project, together with high grade, excellent quality product and proximity to market, make the asset highly desirable to local Brazilian groups who have an understanding of the strong domestic market for high grade, low impurity iron ore,” Centaurus stated.

The company stated it had already received non-committal, early stage interest from local parties for both outright sale and joint venture development.

Centaurus had also received an unsolicited expression of interest for its wholly-owned Jambreiro project – a larger, shovel-ready assets also in southeast Brazil, licences for production of 3 million tonnes per annum of iron ore. The company said it would assess this interest and other avenues available to realise value from the asset.