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 Jambreiro Project’s potential economics have continued to improve since the July 2019 PFS was completed, and in May 2020, Centaurus updated the key inputs to the Jambreiro project economics, including:
Consistent with the 2019 PFS, the results of the updated 1Mtpa PFS considered forecast production of 17.9Mt of high-grade low-impurity product at a rate of 1Mtpa over a period of 18 years using the same resource and reserve previously outlined.
Since May, potential project economics have continued to significantly improve with the increase in global iron ore prices to around US$160/tonne for a 62% Fe CFR China prices and the ongoing weakness in the Brazilian Real exchange rate to the US dollar.
Indicatively, given there has been no material changes in the conservative modifying factors used to estimate the Jambreiro Ore Reserve and that the capital or operating costs remain in line with the May 2020 Revised PFS, the post-tax NPV8 of the Project at current iron ore prices and current exchange rates would lift to over A$425 million with an IRR over 80%.
The Jambreiro Iron Ore Project retains significant value for the Company. The completion of a suitable domestic market off-take for Jambreiro product (65% Fe) remains a key to unlocking this value and to advance financing/partnering discussions for the Project. The Company is continuing to assess off-take/partnering options for the Project and discussions remain open in this regard.