20/12/2013 - 11:58

Centaurus scales back Jambreiro project

20/12/2013 - 11:58

Bookmark

Save articles for future reference.

Centaurus Metals has scaled back development plans at its Jambreiro iron ore project in Brazil, announcing it will halve its initial production rate to one million tonnes per annum in a bid to keep the project on track.

Centaurus Metals has scaled back development plans at its Jambreiro iron ore project in Brazil, announcing it will halve its initial production rate to one million tonnes per annum in a bid to keep the project on track.

Centaurus said the new strategy would reduce the project's capital expenditure by 61 per cent to $53 million, allowing the company to press ahead with construction while finalising off-take arrangements which could ultimately boost longer-term production capacity to 2-3mtpa.

"The best result for our shareholders is to get into production as soon as we possibly can, so that we can benefit from the resilient conditions, strong demand and strong prices in the iron ore market," Centaurus managing director Darren Gordon said.

"While we have every confidence that we will ultimately finalise a suitable life-of-mine off-take deal that will support project expansions, we cannot keep holding up the development and financing of the project waiting until this occurs."

Centaurus said it remains in discussions with a leading Brazilian-based iron ore and steel group in regards to a potential off-take arrangement.

However the finalisation of the deal is reliant upon the re-commencement of construction of a new port development in south east Brazil, with construction unlikely to be completed until the port development is sold to international third parties.

Centaurus said it is pursuing potential rail and port alternatives to export ore from the Jambreiro project.

The company is targeting first production at Jambreiro for the first quarter of 2015, having earlier aimed to get the project up and running by the end of this year.

It recorded a $25.4 million net loss after tax for the half year ended June 30 after writing down the value of its non-core Brazilian assets by more than $15 million.

Its shares were steady at 17.5 cents at 11:55am WST.

STANDING BY BUSINESS. TRUSTED BY BUSINESS.

Subscription Options