22/09/2008 - 16:44

Centaurus to sell Brazil iron project

22/09/2008 - 16:44

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West Perth-based Centaurus Resources Ltd has decided to sell its interest in the Liberdade iron ore project in Brazil in favour of concentrating on its other major assets.

West Perth-based Centaurus Resources Ltd has decided to sell its interest in the Liberdade iron ore project in Brazil in favour of concentrating on its other major assets.

The company said its project partners have offered to buy out its 60 per cent interest either through an outright sale or ongoing production royalty.

Centaurus said given the amount of management time required to bring a project online and the likely mine gate nature of sales from the project, it has decided to sell.

The sale is subject to further investigation of the offers by Centaurus.

 

Below is the full announcement:

 

The Board of Centaurus (ASX Code: CUR) wishes to advise that since completing the initial resource calculation at the Liberdade Iron Ore Project, discussions have been held with the other shareholders of Mineração Marsil Ltda ("JV company" or "Marsil"), regarding the future development of the Liberdade operations, potential offtake partners, the appropriate engineering and design support for the Project and other requirements of the JV Company to bring the Project into production.

Centaurus has completed all of its obligations under the Liberdade Acquisition Agreement required to earn its 60% equity in the JV Company and as such it has now formally requested the other shareholder of Marsil to transfer to Centaurus the shares necessary to register the Company's 60% interest. Concurrently with the formal transfer of the 60% interest in the JV Company, Centaurus is required to pay a further USD $1 million.

As part of the ongoing joint venture discussions and the formal request for transfer of the 60% interest in Marsil, the founding shareholders of Marsil have offered to buy Centaurus out of the Project via an outright sale or ongoing production royalty. The Board needs to confirm a number of aspects of the offer from Marsil, but given the extensive management time required to bring a production asset on line in the current joint venture structure, the likely 'mine gate' nature of any sales from the Project and the focus on its other potentially much larger and 100% owned iron ore and manganese Projects, the Company has determined that its preferred option is to sell the Liberdade Iron Ore Project rather than bringing the project into production as previously contemplated.

A sale of Centaurus' interest in the Liberdade Iron Ore Project on the terms under consideration would provide a great opportunity to realise immediate value for the Project and allow the Company to focus management time and funding on its potentially much larger, 100% owned, iron ore and manganese projects. It will also provide funding to pursue other near term production opportunities that exist within the Iron Quadrangle of Brazil.

The Company will update the market as the negotiations with Marsil progress.

 

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