Centaurus flags sale of Brazilian mine

Iron ore miner Centaurus Metals says it can no longer afford to develop its Candonga project in Brazil on its own, and will be seeking to either bring in a joint venture partner or sell the mine in order to survive in the tough economic climate.

The company also said it would be reducing its workforce by 45 per cent and moving its base of operations in Brazil to a smaller premises to save costs, following a review of its feasibility study on Candonga.

Management personnel have also agreed to take a portion of their salary in shares.

Centaurus said despite advancing the project to a development-ready stage, it was unable to pursue a standalone development of Candonga without access to the required funding.

“Accordingly, the company intends to pursue opportunities to extract value from the project via either an outright sale or joint venture proposition,” it said.

The high-grade and quality product at Candonga makes it highly desirable to local Brazilian groups, which have an understanding of the strong domestic market, Centaurus said.

“Non-committal early stage interest has already been received from local parties on both outright sale and joint development,” it said.

The company said it planned to survive in the area by mining for other commodities such as gold, copper, zinc and nickel.

“While Centaurus has no intention of abandoning its iron ore assets and remains determined to realise the maximum possible value from these projects for its shareholders, the board is cognisant of the need to create value for its shareholders by investing in commodities and assets capable of being funded and generating a meaningful return,” it said.

Centaurus owns a 437 square kilometre tenement area, which is says is prospective for several other commodities.

Shares in Centaurus were 8.3 per cent higher to 1.3 cents each at 10am.