Centaurus Metals has agreed to acquire Vale’s Jaguar nickel project and, separately, has reported the results of a prefeasibility study of the Jambreiro iron ore project, both in Brazil.
Centaurus has been granted a binding call option by Vale allowing it to acquire 100% of the Jaguar nickel project in Pará state, Brazil, through a transaction that includes an asset swap arrangement, with Vale acquiring Centaurus’s copper-gold Salobo West project, also in Pará, 12 kilometers (km) west of Vale’s Salobo copper-gold mine.
Jaguar has a non-JORC compliant resource of 40.4 million metric tons (mt) at a grade of 0.78% nickel for a total of 315,000 mt of contained nickel, based on more than 55,000 meters (m) of diamond drilling.
Historical preliminary metallurgical test work has demonstrated that conventional flotation produces a high-grade 23%-plus nickel concentrate at 64% recovery from Jaguar mineralization. The project also has exploration upside.
The Jaguar project is located 35 km north of the regional center of Tucumã and has access to a 230-kVA substation 15 km southeast of the project at Vale’s Onça-Puma nickel plant. Consideration for the transaction includes an upfront cash payment of $250,000, the transfer of Centaurus’s Salobo West tenements to Vale, two deferred consideration payments totaling $6.75 million, and a production royalty of 0.75%. The majority of the deferred consideration will be tied to first commercial production.
Vale will have the right to purchase 100% of production from Jaguar under a future off-take agreement.
“Nickel sulphide deposits like Jaguar are extremely rare globally and for Centaurus to be able to successfully acquire such an outstanding asset is a great result for the company and our shareholders,” Centaurus Managing Director Darren Gordon said. “We have developed a strong working relationship with Vale through the negotiation process and to be able to secure this opportunity from them is testament to Vale’s strong belief in the mutual benefits that can be realized under their recently rolled out ‘mini-mines’ model for base metals and Centaurus’ strong credentials in Brazil and the Carajás.”
Prior to announcing the Vale transaction, Centaurus reported completion of a positive prefeasibility study (PFS) of its 100% owned Jambreiro iron ore project in Minas Gerais state, Brazil. The PFS describes a 1-million-mt/y project with an initial 18-year mine life. Likely customers are the integrated steel mills of Brazil’s Steel Valley region, 150 km south of the project.
The project will produce a 65%-iron sinter feed product for potential customer sites in Ipatinga, João Monlevade, Barão de Cocais, and Itabira.
Preproduction capital to develop the project, including contingency, is estimated at A$59.8 million, with a 22-month capital payback. Mine-gate cash operating costs are estimated at A$29/mt of sinter feed product.
A bankable feasibility study is under way, with a goal of supporting a final investment decision in early 2020.
The Jambreiro orebodies allow for low strip ratios and shorter haulage routes for the first five years, which has a positive impact on both operating and deferred capital costs. The ore and waste are predominantly free-dig from surface over the life of the current mine design, with blasting only expected for 5% of the total material movement for the project. Pit exit ramps have been designed to allow easy access to the ROM-pad area, primary crusher, and main waste storage areas while maintaining a minimum haulage distance.
The mine will be operated by a local mining contractor using 40-mt off-road trucks.
The proposed Jambreiro process flowsheet allows the plant operator to produce different products tailored to individual customers. By changing the blends of jig and magnetic separation products, the operator will be able to increase iron grade and change grain size distribution specs to meet customer demands.
Centaurus Metals is an Australian company headquartered in West Perth, Western Australia.