Centaurus in tax concessions deal

Shares in Centaurus Metals were higher after the company said it would gain tax concessions at its Jambreiro iron ore project from a framework agreement with a state government in Brazil.

The West Perth-based company announced today that it had entered into a memorandum of understanding with the State of Minas Gerais and other key state departments.

Centaurus said the agreement is expected to deliver important tax concessions that will result in significant capital and operating cost savings for Jambreiro, which was moving towards financing and development this year.

Shares in Centaurus climbed 4c to 35c at 1242 AWST.

Under the agreement, Centaurus has committed to “preferentially” source employees required for the project locally and use local suppliers and service providers.

The state government will use its “best efforts” to assist Centaurus in securing working capital and equipment finance from the State Development Bank, should the company choose this path.

“The development of Jambreiro will see Centaurus initially invest some $A136 million in the State of Minas Gerais, generating approximately 1,000 jobs during construction and 500 direct and indirect jobs during steady state operations, as well as creating significant opportunities for training and skills development for local residents,” managing director Darren Gordon said.