The Company’s 100%-owned Jambreiro Project, located in south-east Brazil, is a fully permitted, shovel‐ready development project that is licenced for 3Mtpa of production. It represents a strategic asset in the Brazilian domestic iron ore and steel sector, particularly with the premium pricing that exists in the market for high grade ore (+65% Fe).
Centaurus completed a positive Pre-Feasibility Study (PFS) on the Jambreiro Project in July 2019, which outlined a robust 1Mtpa start-up project capable of generating life-of-mine revenues of A$1.05 billion and EBITDA of A$533 million over its initial 18-year life.
The strong economics of the proposed A$59.8 million development – including a A$114.9 million post-tax NPV8 and IRR of 32% for a 1Mtpa operation – provide a strong foundation for the Company to further progress off-take arrangements and initiate more detailed debt finance discussions to facilitate a Final Investment Decision in early 2020.
The PFS has been based on the new JORC 2012 Proven and Probable Ore Reserves estimate of 43.3Mt grading 29.1% Fe, which was released separately to the market today. The Ore Reserve estimate focuses only on the friable component of the JORC 2012 Mineral Resource estimate (Measured, Indicated and Inferred) and utilises current operating costs and conservative revenue assumptions. 82% of the friable Measured and Indicated Mineral Resource has been converted into Ore Reserves.
The Ore Reserve delivers 17.9Mt of high-grade (65% Fe), low-impurity (4.3% SiO2, 0.8% Al2O3 & 0.01% P) sinter product to support the initial 18-year mine life once operations commence.
Underpinning the PFS results are low forecast mine gate cash operating costs of A$25.1, which when combined with government and landowner royalties, amount to a total mine gate cash cost (C1 + Royalties) of A$29.0/tonne.
With tailings management being such a strong focus point for all stakeholders in Brazil at the present time, the Company has proactively made the decision that it will dry stack all tailings from the operations of the Project. This approach has the benefit of facilitating an easier future expansion pathway for the Project (no tails dam capacity constraints) and minimising the potential impact of government and/or non-government organisation intervention as the Project advances towards production.
Based on the strong project economics, the Board has now approved the commencement of a BFS, which is being targeted for completion before the end of 2019. Importantly, the key environmental and mining approvals are all in place to facilitate the timely delivery of the Project.