Name and Location
Candonga direct shipping ore (DSO) project, Brazil.

Client
Centaurus Metals.

Project Description
Centaurus Metals has reported a 33% increase in the DSO resource at its Candonga project.

Following a recent drilling programme at Candonga, the project is now estimated to host a Joint Ore Reserves Committee-compliant DSO resource of 1.2-million tonnes, grading 63.2% iron, of which about one-million tonnes are classified as measured and indicated.

The plan is to develop a small-scale DSO mining operation that can supply a high-grade lump and coarse sinter product to the Brazilian domestic market to meet the high levels of demand for and the current undersupply of these product types.

The mining schedule is based on an average of 400 000 t/y of ore being mined to deliver the 300 000 t of saleable product.

Net Present Value/Internal Rate of Return
Not stated.

Value
The total preproduction capital costs for the project have been estimated at A$3.6-million.

The capital expenditure pertains to the acquisition of a new dry crushing and screening plant, some limited mine development works and other infrastructure requirements.

Duration
Production at Candonga will start in the second quarter of 2015 at a rate of 300 000 t/y under a trial mining licence, which was lodged in April 2014.

Latest Developments
Brazil's Department of Mines has approved a trial mining licence application for the Candonga DSO project.

The approval, which is subject to the receipt of an operating licence from the state environmental agency, represents the penultimate approval required before the issue of the formal trial mining licence.

MD Darren Gordon notes that the company is continuing to “tick the boxes” of its permitting and predevelopment programme, with the trial mining licence approval coming less than nine months after being lodged.

“Our focus will now be to finalise the environmental approval process to allow on-site development work to commence, while also accelerating the full mining lease application to underpin future expansion above 300 000 t/y,” states Gordon.

Centaurus is hoping to start production at Candonga in the second quarter of the year at a rate of 300 000 t/y. The operating licence and final trial mining approval is expected in July, facilitating the start of product sales.

Key Contracts and Suppliers
None stated.

On Budget and on Time?
Not stated.

Contact Details for Project Information
Centaurus Metals, tel +61 8 9420 4000, fax +61 8 9420 4040 or email office@centaurus.com.au.