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Brazilian Domestic Iron Ore Projects

Centaurus’ Domestic Iron & Steel Strategy is based on establishing low-cost iron ore mining operations in close proximity to existing infrastructure, delivering products which can readily be sold into the substantial domestic steel industry in Brazil.

The Domestic Strategy is underpinned by the Company’s extensive project portfolio in this region, which comprises 32 prospective iron ore tenements covering an area of 469 sq km. Centaurus’ total resource inventory in south-eastern Brazil currently stands at 216 million tonnes.

The bulk of production under the Domestic Strategy is expected to come from the Company’s flagship Jambreiro Project. Production from Jambreiro will initially commence at 1Mtpa of high-grade hematite, enabling Centaurus to establish itself as a long-term supply partner to the domestic Brazilian steel industry.

This will form the basis of a staged development strategy eventually targeting 2-3Mtpa of production from Jambreiro.

The Jambreiro Project is fully permitted, and ready to commence construction as soon as a suitable funding package has been secured.

The Company is also accelerating development of the nearby Candonga DSO Project, which represents a small-scale, low-cost production opportunity with the potential to provide early cash flow. Production from Candonga is expected to commence in early 2015 at a rate of 300,000 tonnes of Direct Shipping Ore (DSO) per annum.

The Canavial, Passabem and Itambé projects may also be brought into production at a later time to expand the production base into the domestic market.

Centaurus is aiming to become a supplier of choice to the domestic Brazilian steel industry by beneficiating the itabirite ores at its projects to produce a high-quality, consistent final product grading 65-66% Fe.

Itabirites are a major source of iron ore production in Brazil. Itabirite is a metamorphosed iron formation composed of iron oxides with abundant quartz. They typically comprise hematite with a lower run-of-mine (ROM) grade than other sources of hematite.

However, they are extremely well suited to low-cost beneficiation and can be upgraded to 65-66% Fe via simple and inexpensive beneficiation processes.