PERTH (miningweekly.com) – Iron-ore developer Centaurus Metals has been granted three mining leases over the concession area making up its flagship Jambreiro iron-ore project, in Brazil.

The company said on Wednesday that the grant of the mining leases was a key strategic step for future mining operations in the area, allowing Centaurus to complete the funding process to develop Jambreiro.

While the grant of the mining leases was not a prerequisite for construction to begin, it would ensure that Centaurus was able to start operations and generate a positive cash flow once the construction process has been completed.

“While we already had the necessary approval required to start construction on site in the form of the previously granted installation licence, the grant of the mining leases represents the culmination of the approval process with the Mines Department and the Ministry of Mines and Energy, and marks a further key milestone in our development process,” said Centaurus MD Darren Gordon.

He noted that the grant of the mining leases would assist Centaurus with its funding process, which, in turn, would clear the way for the company to start the construction of the one-million-tonne-a-year project over the coming months.

In December, the company announced that it had revised the development plan for the Jambreiro project, opting for a staged development that would see production subsequently increased to two- to three-million tonnes a year.

The revised development strategy would result in a substantial reduction in pre-production capital, enabling Centaurus to start development with significantly less financing risk and in the shortest possible time fame.

Under the revised production base, development would start in April this year, with first production targeted for the first quarter of 2015.

The revised production plan would require an initial capital investment of some A$53-million, as opposed to the A$136-million original price tag.

“2014 is set to be a transformational year for Centaurus and it’s great to kick off the New Year with this very important piece of news. The grant of the mining leases clearly demonstrates that there are no approval-related impediments to starting operations at the project, and should further reduce the financing risk, putting us in a strong position as we enter what is shaping up as a very busy period for the company,” said Gordon.