TIDMJAN
RNS Number : 0209V
Jangada Mines PLC
31 October 2017
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
31 October 2017
Jangada Mines plc ('Jangada' or the 'Company')
Completion of Scoping Study
at the Pedra Branca Platinum Group Metals Project
Jangada Mines plc, a natural resources company developing South
America's largest and most advanced platinum group metals ('PGM')
project, is pleased to announce the results of the recently
completed Scoping Study (the 'Study') for its Pedra Branca PGM
project in north-eastern Brazil (the 'Project'). The Study has
confirmed that the Project has the potential to become a robust
shallow open pit operation, with a low capital expenditure
requirement, yielding attractive financial returns and a very short
payback period.
Overview:
-- The Study concludes that the Project has the potential to
produce an Internal Rate of Return (IRR) of 80% and a payback
period of 1.3 years
-- The Study indicates, low capital expenditure requirement of
US$38.4m for the construction of the mining operation, processing
plant and the associated infrastructure
-- At a production rate of 1.1Mt per year, the operation will
have a potential life-of-mine ('LOM') of 13 years at a very low
1.07 strip ratio producing 34,000 ounces of PGM+Au per annum
-- A multi-commodity ore suite, mined at an average grade of
1.22 g/t PGM+Au with additional credits from nickel, copper, chrome
and cobalt, yields a NPV of US$158.4m at a 10% discount rate
-- A Mineral Inventory of 14.3Mt of run-of-mine ('ROM') ore has
been scheduled to sustain a shallow, open pit mine with a
conventional sulphide flotation plant producing a saleable
multi-element concentrate
-- Pedra Branca is already the largest and most advanced PGM
project in South America and currently has a JORC compliant
resource of approximately 1 million ounces of PGM+Au
Brian McMaster, Executive Chairman of Jangada said, "The results
of the Scoping Study are excellent and clearly demonstrate the
outstanding potential of this polymetallic project as a low cost,
shallow pit PGM operation with excellent financial returns. The
addition of the by-product credits for critical technology metals
including cobalt, nickel and copper has a significant positive
impact on the economics and underpins our belief that Pedra Branca
has the potential to be a 'free platinum' operation, where
by-product credits cover the costs of PGM production. We are also
seeing significant value addition through the envisaged chrome
concentrate production from the same ore zone.
"With these excellent results, we look forward to continuing to
develop Pedra Branca as the pre-eminent PGM asset in South America,
immediately advancing the project through the pre-feasibility
study. We are also continuing to investigate further optimisation
potential and value addition through our on-going metallurgical
test work. Our management team on the ground is working hard to
prepare the Project for final permitting as we continue toward our
goal of trial production in early 2018.
"We have made excellent progress since listing in June 2017 and
now expect to be entering a period of further positive news flow
over the near-medium term, which we hope will assist in the
re-rating of our Company."
Geology and Resource
The Pedra Branca Project is the largest and most advanced PGM
project in South America and currently has a JORC (2012) compliant
resource of approximately 1 million ounces of PGM+Au at a grade of
1.3 g/t, 109 Mlbs of Ni, 23 Mlbs of Cu, 6.4 Mlbs of Co and 670kt of
Cr(2) O(3) . The Project is located approximately 280 km from the
port city of Fortaleza in the northeast of Brazil and holds three
mining licenses and 43 exploration licenses over an area of
approximately 50,000 ha.
Previous operators have spent more than US$35 million on
exploration and development activities, which include 30,000 meters
of diamond core drilling, geophysical surveys and metallurgical
tests.
Pedra Branca Project
Grade Tonnage Table Pedra Branca Deposit - Total Mineral Resource
Block Model: 5m X 10m X 1m (2.5m X 5m X 0.5m)
Considered Equivalent Gold Cut-Off Grade: 0.30 g/t
----------------------------------------------------------------------------------------------------------------------------------------------------------
Zone Classification Cr2O3 Tonnes PGM Pd Pt Au Cu Ni Cr2O3(%) Co PGM Pd Pt Au (koz)
Level (kt) (g/t) (g/t) (g/t) (g/t) (%) (%) (ppm) (koz) (koz) (koz)
------------ ---------------- ------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Oxide Measured Type 2 27 1.008 0.636 0.361 0.011 0.051 0.225 6.238 131.3 0.89 0.56 0.32 0.01
------------ ---------------- ------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 1 311 1.235 0.806 0.399 0.030 0.043 0.251 0.635 137.9 52.04 33.96 16.81 1.26
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Indicated Type 2 204 2.498 1.547 0.901 0.050 0.038 0.204 7.886 123.4 16.40 10.16 5.92 0.33
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 3 630 1.479 0.887 0.554 0.038 0.044 0.228 0.608 130.1 172.62 103.53 64.60 4.49
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Inferred Type 2 208 1.940 1.069 0.836 0.036 0.033 0.220 7.527 121.9 13.00 7.16 5.60 0.24
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 3 427 1.919 1.137 0.763 0.019 0.041 0.199 0.875 124.7 211.42 125.28 84.08 2.05
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Sub 8 808 1.647 0.991 0.626 0.030 0.042 0.219 1.066 128.3 466.38 280.66 177.33 8.38
--------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Transition Measured Type 2 53 1.854 1.061 0.763 0.030 0.049 0.220 19.484 149.6 3.14 1.80 1.29 0.05
------------ ---------------- ------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 645 1.207 0.812 0.375 0.020 0.053 0.225 0.560 136.2 25.02 16.83 7.77 0.41
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Indicated Type 2 21 1.650 0.807 0.813 0.030 0.043 0.213 10.200 125.4 1.13 0.55 0.56 0.02
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 1 513 1.303 0.834 0.435 0.033 0.052 0.218 0.538 126.7 63.39 40.59 21.18 1.62
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Inferred Type 2 74 1.114 0.655 0.404 0.055 0.029 0.193 5.671 124.1 2.64 1.55 0.96 0.13
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 2 107 1.096 0.701 0.370 0.024 0.031 0.189 0.416 114.4 74.23 47.52 25.09 1.62
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Sub 4 414 1.195 0.767 0.401 0.027 0.042 0.205 0.842 122.4 169.56 108.85 56.85 3.86
--------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Sulphide Measured Type 2 14 1.170 0.708 0.439 0.023 0.040 0.242 11.740 142.2 0.54 0.33 0.20 0.01
------------ ---------------- ------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 935 1.486 0.977 0.487 0.022 0.049 0.267 0.916 144.2 44.66 29.36 14.64 0.66
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Indicated Type 2 2 0.805 0.597 0.199 0.009 0.046 0.243 8.061 142.4 0.04 0.03 0.01 0.00
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 2 567 0.999 0.566 0.394 0.039 0.045 0.223 0.494 128.2 82.48 46.68 32.55 3.25
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Inferred Type 2 61 1.582 0.805 0.665 0.111 0.061 0.221 5.092 137.8 3.13 1.59 1.31 0.22
---------------- -------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Type 1 6 314 0.896 0.468 0.357 0.071 0.051 0.203 0.635 125.9 181.86 95.05 72.49 14.31
------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Sub 9 893 0.983 0.544 0.381 0.058 0.049 0.214 0.670 128.3 312.70 173.04 121.21 18.45
--------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Grand Total 23 114 1.28 0.76 0.48 0.04 0.05 0.21 0.85 127.17 948.64 562.56 355.39 30.70
--------------------------------------- ------- ------ ------ ------ ------ ------ ------ --------- ------- ------- ------- ------- ---------
Pit Optimisation and Design
The Study envisages a conventional, shallow, truck and shovel
operation. Development of the optimal pits was based on the
definition of an economic function, legal and proprietary
restrictions and a determination of the nested optimal pits using
Geovia Whittle 4.7.1 software.
The determination of the geometry of the optimal pits was
executed through the generation of an optimal sequence of
pushbacks. To determine the evolution of the pits over time, an
annual production scale of 1.1Mtpa of Mill Feed was established,
based on Taylor rule. The optimal pit for the LOM was selected at
an Annual Discount Rate of 10% based on the stabilisation of
NPV.
Figure 1: Example of a conventional truck and shovel open pit
operation.
http://www.rns-pdf.londonstockexchange.com/rns/0209V_-2017-10-30.pdf
Mining Schedule and Fleet
The production scheduling was generated in GEOVIA Minesched(TM)
9.1.0 and the Mine Scheduling assumptions used were to minimize the
Strip Ratio in the early years at a production rate of 1.1Mtpa
based on Taylor rule.
The targets were sequenced in order to stabilize the grade as
follows:
-- Esbarro and Curiu:
-- Esbarro and Cedro:
-- Cedro and Trapia.
The main mine fleet consists of CAT 345 hydraulic excavators
equipped with a 2.5 m(3) bucket (or similar) and Scania G480 8x4 -
35 tonne capacity trucks (or similar). A fleet of ancillary
equipment is also available for mine maintenance and eventual plant
services.
Processing
GE21 used a basic conceptual circuit for the concentrate plant
of Pedra Branca project with material flow as follows:
1. ROM material crushed in-pit, loaded and transported to processing plant.
2. Crushed material fed to conventional ball mills at 1.1Mt per year.
3. Mill product to be size-classified by cyclone producing required flotation feed.
4. Ore subjected to standard sulphide flotation through a
rougher bank, a cleaner bank and scavengers.
5. Rougher tailings to spiral feed to produce chrome concentrate.
6. Sulphide concentrate filtering and thickening to produce final concentrate.
Figure 2: Conceptual flowsheet for the Pedra Branca PGM
project
http://www.rns-pdf.londonstockexchange.com/rns/0209V_1-2017-10-30.pdf
Economic Evaluation
The preliminary economic evaluation considered key input
parameters in evaluating the Project's potential financial returns.
Considerations included mine capital, plant capital and operational
expenditure, metallurgical recoveries, commodity prices, taxes,
product payability and general resource modifying factors.
The mine capital expenditure is related to a contractor mining
operation with consideration for site preparation, including mine
development, mine infrastructure (machine shops, roads, drainages,
waste dump preparation, etc.) and was estimated at US$400,000 based
on similar operations and the Mining Capital Cost Estimation
Handbook (CAPCOST - CIM Especial Volume 47). The mining operational
expenditure was estimated at US$4.18/t and was defined based on
GE21's database in accordance with projects of similar scale and
characteristics.
The plant capital expenditure was estimated at US$38 million as
detailed in the table below. The Plant OPEX was estimated at
US$10.5/t of ROM and it was defined based on GE21's database in
accordance with projects of similar scale and characteristics.
Pedra Branca Project
Plant and DAM CAPEX (M US$)
----------------------------------------------------------------------------------------------------
Item Weight Volume Unit Cost Cost
------------------------------------- --------------- ----------------- ----------------- ------
t m(3) US$/unit M US$
------------------------------------- --------------- ----------------- ----------------- ------
Mechanical Equipment 200 - - 15.22
------------------------------------- --------------- ----------------- ----------------- ------
Electrical Equipment - - - 3.04
------------------------------------- --------------- ----------------- ----------------- ------
Metal structure 200 - 5.00 1.00
------------------------------------- --------------- ----------------- ----------------- ------
Boilermaking 40 - 6.00 0.24
------------------------------------- --------------- ----------------- ----------------- ------
Pipe Manufacturing 60 - 7.00 0.42
------------------------------------- --------------- ----------------- ----------------- ------
Infrastructure - 100 6.00 0.60
------------------------------------- --------------- ----------------- ----------------- ------
Foundation and Water Box (concrete) - 100 1.50 0.15
------------------------------------- --------------- ----------------- ----------------- ------
Buildings (500m(2) ) - - 1.00 0.50
------------------------------------- --------------- ----------------- ----------------- ------
Electric materials - - 0.91
------------------------------------- --------------- ----------------- ----------------- ------
Pipe and Hydraulic Materials 60 - 10.00 0.60
------------------------------------- --------------- ----------------- ----------------- ------
Instrumentation - - 0.50
------------------------------------- --------------- ----------------- ----------------- ------
Equipment assembly 200 - 5.00 1.00
------------------------------------- --------------- ----------------- ----------------- ------
Assembly of Structure and Boiler 240 - 6.00 1.44
------------------------------------- --------------- ----------------- ----------------- ------
Piping Assembly 60 - 7.00 0.42
------------------------------------- --------------- ----------------- ----------------- ------
Electrical Assembly - - 0.91
------------------------------------- --------------- ----------------- ----------------- ------
Dam - - 1.10
------------------------------------- --------------- ----------------- ----------------- ------
Yard Storage - - 0.10
------------------------------------- --------------- ----------------- ----------------- ------
Project - - 0.85
------------------------------------- --------------- ----------------- ----------------- ------
Management - - 1.41
------------------------------------- --------------- ----------------- ----------------- ------
Contingencies - - 7.60
------------------------------------- --------------- ----------------- ----------------- ------
Total - US$ 38.02
-------------------------------------------------------------------------------------------- ------
Pedra Branca Project
Selling Prices and Taxes
------------------------------------
Metal Sell Price
------------------- ---------------
Pd 849 (US$/oz)
------------------- ---------------
Pt 1,214 (US$/oz)
------------------- ---------------
Au 1,280 (US$/oz)
------------------- ---------------
Co 60,500
(US$/t)
------------------- ---------------
Cr 2,480 (US$/t)
------------------- ---------------
Cu 6,779 (US$/t)
------------------- ---------------
Ni 11,840
(US$/t)
------------------- ---------------
Taxes
------------------------------------
CFEM 2.00%
------------------- ---------------
INCOME TAX 25%
------------------- ---------------
CSLL 9.00%
------------------- ---------------
Financial Parameters
------------------------------------
WACC 10.0% aa
------------------- ---------------
Royalties
------------------------------------
Surface Royalties 1.00%
------------------- ---------------
Payability
Pd 85%
------------------- ---------------
Pt 85%
------------------- ---------------
Au 85%
------------------- ---------------
Co 20%
------------------- ---------------
Cr 95%
------------------- ---------------
Cu 85%
------------------- ---------------
Ni 85%
------------------- ---------------
Economic Results
------------------------
CAPEX (US$
mi) 38.4
---------------- ------
NPV (US$ mi) 158.4
---------------- ------
IRR (%) 80.5
---------------- ------
NIV (US$ mi) 38.4
---------------- ------
NPV/NIV 4.1
---------------- ------
Pay Back(year) 1.3
---------------- ------
A Discounted Cash Flow ('DCF') scenario was developed to assess
the Project based on economic-financial parameters, on the results
of the mine scheduling and on the sustaining CAPEX and OPEX
estimate. The table above, entitled Economic Results, shows the
main economic and financial parameters used in the DCF.
The Study was executed at the Scoping Study level as it did not
define mineral reserves. It concluded from a Mineral Inventory of
14.3Mt of ROM which, at a potential production rate of 1.1Mtpa to
be mined at an average strip-ratio of 1.07 and at an average grade
of 1.22 ppm PGM+Au equivalent with associated Cobalt, Copper,
Nickel and Chromium credits, can potentially return a NPV of
US$179.8m at a discount rate of 8%, and US$158.4m at a discount
rate of 10%.
FORWARD LOOKING AND CAUTIONARY STATEMENTS
Some statements in this report regarding estimates or future
events are forward-looking statements. They include indications of,
and guidance on, future earnings, cash flow, costs and financial
performance. Forward-looking statements include, but are not
limited to, statements preceded by words such as "planned",
"expected", "projected" "estimated" "may", "scheduled", "intends",
"potential", "could" "nominal" "conceptual" and similar
expressions. Forward looking statements, opinions and estimates
included in this announcement are based on assumptions and
contingencies which are subject to change without notice, as are
statements about market and industry trends, which are based on
interpretations of current market conditions. Forward looking
statements are provided as a general guide only and should not be
relied on as a guarantee of future performance. Forward looking
statements may be affected by a range of variables that could cause
actual results to differ from estimated results.
In this report, the term "mining inventory" is used to report
that part of the Mineral Resource that has been considered in the
Scoping Study. The mining inventory does not meet the requirements
of an Ore Reserve as defined under the 2012 edition of the JORC
Code and should not be considered an Ore Reserve. There is no
certainty that all or any part of the mining inventory will be
converted into Ore Reserves.
SCOPING STUDY PARAMETERS - CAUTIONARY STATEMENT
The Scoping Study referred to in this report is based on
low-level technical and economic assessments, and is insufficient
to support estimation of Ore Reserves or to provide assurance of an
economic development case at this stage, or to provide certainty
that the conclusions of the Scoping Study will be realized.
Metallurgical recovery parameters are scoping-level estimates only
and are based on historic metallurgical borehole and surface sample
bench-scale test work and assumptions from geologically similar ore
deposits.
Unless otherwise stated all cash flows are in US dollars, are
undiscounted and are not subject to inflation/escalation factors
and all years are calendar years. The Scoping Study financial
analysis excludes the cost of pre-feasibility and bankable
feasibility studies.
The Company has concluded it has a reasonable basis for
providing the forward-looking statements included in this
announcement. The detailed reasons for that conclusion are outlined
throughout this announcement and in particular in the disclaimer
entitled "Forward Looking and Cautionary Statements".
COMPETENT PERSON STATEMENT
GE21 is a specialized, independent mineral consulting company
that is headquartered in Belo Horizonte, Minas Gerais, Brazil. The
mineral resource estimate was developed by GE21 staff members, who
are accredited by the Australian Institute of Geoscientists ('AIG')
as "Competent Persons".
Mining Engineer Porfirio Cabaleiro Rodriguez acted as the chief
supervisor for this report. He is a mining engineer with 39 years'
experience in the field of mineral resource and reserve estimation.
He has vast experience with various commodities, which include
phosphate ore, iron ore, uranium, gold and nickel and rare earth
elements, among others. Mr. Rodriguez is a member of the Australian
Institute of Geoscientists ('MAIG').
Geologist Bernardo de Cerqueira Viana provided Mr. Rodriguez
with a peer review of this project was the principal competent
person responsible for the development of the resource part in this
report. Mr. Viana is a member of the MAIG and has more than 16
years' experience in mining projects, specifically in the areas of
geological modelling, mineral resource estimation and the economic
evaluation of projects.
Mr Rodriguez and Mr Viana have sufficient relevant experience to
the style of mineralization to qualify as a Competent Person as
defined in the JORC Code (2012). Mr Rodriguez and Mr Viana also
meet the requirements of a qualified person under the AIM Note for
Mining, Oil and Gas Companies.
This announcement contains inside information as defined in
Article 7 of the Market Abuse Regulation No 596/2014.
* ENDS *
For further information, please visit www.jangadamines.com or
contact:
Jangada Mines plc E: info@jangadamines.com
Strand Hanson Limited (Financial T: +44 (0)20 7409
& Nominated Adviser) 3494
James Spinney / Ritchie Balmer
/ Jack Botros
Beaufort Securities (Broker) T: +44 (0)20 7382
Jon Belliss 8300
St Brides Partners Ltd (Financial T: +44 (0)20 7236
PR) 1177
Isabel de Salis / Olivia
Vita
Notes to the Editors
Jangada Mines plc is focused on developing the Pedra Branca PGM
Project ('the Project'), one of the largest undeveloped PGM
projects outside of Africa, with the potential to supply a market
in long-term deficit. The Company is aiming to establish a low
cost, low capex open pit mine, with a target to produce 30,000
oz/annum by the end of 2018 from three existing mining licences
with mineralisation commencing at surface. The Project has a JORC
(2012) Compliant Resource of approximately 1 million ounces of
PGM+Au at a grade of 1.3 g/t, 109Mlbs of Ni, 23Mlbs of Cu, 6.4Mlbs
of Co and 670kt of Cr. Circa 52% of this is contained within
current mining licences and is considered a low development risk
due to previous exploration work totalling + US$35 million.
Additionally, the Company owns a further 44 exploration licences
spanning 55,000 hectares, which have significant upside potential
for PGM, nickel, copper, chrome, rhodium, gold, and vanadium. The
team has a wealth of experience, not only of the Project but of
mining in South America across a range of commodities.
This information is provided by RNS
The company news service from the London Stock Exchange
END
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