TIDMJAN
RNS Number : 6731R
Jangada Mines PLC
18 June 2018
Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector:
Mining
18 June 2018
Jangada Mines plc ('Jangada' or the 'Company')
Preliminary Economic Assessment Confirms Economic Potential
of
The Pedra Branca PGM Project
Jangada Mines plc, a natural resources company developing South
America's largest and most advanced platinum group metals ('PGM')
project, is very pleased to announce the results of the Preliminary
Economic Assessment ('PEA') for its Pedra Branca PGM project in
north-eastern Brazil (the 'Project'). The PEA confirmed the
findings of the 2017 Scoping Study (as announced on 31 October
2017) that the Project has the potential to become a robust, low
CAPEX and OPEX, shallow, open pit operation yielding attractive
financial returns and a very short payback period. To view a full
version of this announcement with images please use the following
link:
http://www.rns-pdf.londonstockexchange.com/rns/6731R_1-2018-6-18.pdf
Overview
-- Robust project economics with a net present value ('NPV') of
US$192 million, Internal Rate of Return ('IRR') of 67% and 1.6-year
payback
-- Potential life-of-mine ('LOM') of 13 years at a 1.2 strip
ratio from a Mineral Inventory of 27 million tonnes of run-of-mine
('ROM')
-- Multi-commodity ore suite mined at an average grade of 1.36
g/t PGM+Au with additional credits from nickel, copper and
cobalt
-- 100% increase in production scale to 2.2Mt per year following
recent 53% uplift in JORC resources
-- Estimated average annual production of 64,000 ounces of
PGM+Au, 2.2 Mlb of nickel, 1.2Mlb of copper, 44,000 lb of cobalt
and 30,000 t of chrome
-- Conventional sulphide flotation plant producing two
concentrates: a saleable multi-element sulphide concentrate and a
chrome concentrate
-- Low CAPEX requirement of US$64.4 million and low OPEX of US$17.31/t of ROM
-- Project located in a mining friendly jurisdiction with a
supportive regional government and good access to
infrastructure
-- Recent resource upgrade and positive metallurgical test
results positively impact Project economics
Brian McMaster, Executive Chairman of Jangada said, "Pedra
Branca is a truly exciting polymetallic project. With an estimated
NPV of US$192 million, an IRR of 67% and a payback of just 1.6
years, the PEA underlines the significant upside and economic
potential of the asset. The scope is for an average production of
64,000 ounces per annum of PGM+Au, with significant credits from
technology metals including 2.2 Mlbs of nickel, 1.2Mlbs of copper,
44,000 lb of cobalt and 30,000 t of chrome. Having a project
demonstrating such excellent potential for returns in an
established mining jurisdiction that has strong legislative
stability makes this an extremely compelling proposition."
Preliminary Economic Analysis
The Board elected to produce a PEA to update the market on the
Project's scope and economic potential given the improving Project
metrics generated from recently completed and ongoing work. This
work included adding 11Mt of mineable resource and 500,000 oz to
the PGM+Au JORC resource and a successful metallurgical test
programme, which demonstrated that the inclusion of magnetic
separation would significantly increase recoveries of PGM and yield
high gold and chrome grades in pre-concentrate.
The Board believes that a Pre-Feasibility Study ('PFS') would be
premature without due consideration for these newly discovered
aspects, which have not yet been incorporated into the current
designs and would result in an underrepresentation of the Project's
potential. The PEA, therefore, outlines the main factors relating
to the potential development of the Project and gives the Board
comfort to proceed expeditiously with further work.
Economic Evaluation
The PEA considered key input parameters in evaluating the
Project's potential financial returns. Considerations included mine
capital and operational expenditure, plant capital and operational
expenditure, metallurgical recoveries, commodity prices, taxes,
product payability and general resource modifying factors.
Estimated Key Economic Data
Mining inventory 27.01Mt of ROM
-------------------------------
Production rate 2.2 Mtpa / 61,000ozpa
-------------------------------
Average strip-ratio 1.2
-------------------------------
Average grade 1.36 g/t PGM+Au (2,4 g/t Pd
Eq)
-------------------------------
LOM 13 years
-------------------------------
NPV US$192 million (@ 7% discount)
-------------------------------
Mine CAPEX US$630,000
-------------------------------
Processing plant CAPEX US$54.2 million
-------------------------------
Additional provisions CAPEX US$9.6 million
& working capital
-------------------------------
Total CAPEX US$64.4 million (1)
-------------------------------
OPEX US$17.31/t of ROM (2)
-------------------------------
Table 1: Estimated key economic data
(1) - Based on similar operations and the Mining Capital Cost
Estimation Handbook (CAPCOST - CIM Especial Volume 47)
(2) - Based on GE21's database of projects with similar scale
and characteristics (average operating costs include mining:
US$6.61/t; processing: US$10.5/t; and general/admin:
US$0.20/lb)
Geology and Resource
The Pedra Branca Project is the largest and most advanced PGM
project in South America with a JORC compliant resource of
approximately 1.45 million ounces of PGM+Au at a grade of 1.36 g/t,
140 Mlb of Ni, 26 Mlb of Cu, and 9,7 Mlb of Co. The Project is
located 280 km from the port city of Fortaleza in the northeast of
Brazil and holds three mining licences and 43 exploration licenses
over and area of 50,000 ha. Previous operators have spent more than
US$35 million on exploration and development activities, which
include 30,000 metres of diamond core drilling, geophysical surveys
and metallurgical tests.
The Pedra Branca Project mineralisation is hosted in ultramafic
bodies originated from one large layered intrusion. The ultramafic
bodies can be subdivided into two distinct rock packages that occur
separated by a relatively thick chromitite marker horizon (reefs),
this subdivision is likely to be a primary magmatic feature that is
related to the PGM emplacement. The PGM mineralisation is
associated disseminated chromite and base metal sulphides within
the host rock packages.
One rock package is characterised by massive black dunite and
the other by heterogeneous peridotites. The massive dunite is
generally course grained and is homogenous with minor regions
grading into olivine rich peridotites. Locally, it can have thin
tremolised units commonly associated with disseminated chromite and
chromitites. The peridotite dominated rock package is characterized
by mixed pegmatodial, equigranular olivine crystals and cyclic
layering. The cyclic units consist of thin chromitite layers
followed by equigranular dunite and olivine peridotites grading
into pegmatodial peridotites.
Design and Pit Optimisation
The PEA envisages a conventional, shallow, truck and shovel
operation, operated by a mining contractor. A pit optimisation
analysis was conducted to determine the most profitable open pit
design, given the Project's mineral resource and set of economic
and metallurgical parameters; in this case it was based on the
definition of an economic function, legal and proprietary
restrictions, and a determination of the nested optimal pit using
Geovia Whittle 4.7.1 software.
The determination of the geometry of the optimal pit was
executed through the generation of an optimal sequence of
pushbacks. To determine the evolution of pits over time, an annual
production scale of 2.2Mtpa of Mill Feed was established, based on
Taylor rule. The optimal pit for the LOM was selected at an Annual
Discount Rate of 7% based on the stabilisation of NPV.
Mining Schedule and Fleet
The production scheduling was generated in GEOVIA Minesched(TM)
9.1.0 and the Mine Scheduling assumptions used were:
-- Production rate of 2.2 Mtpa
-- Minimising the Strip Ratio in the early years
The mining targets were sequenced to stabilise the grade as
follows:
-- Esbarro and Curiu
-- Esbarro and Cedro
-- Cedro and Trapia
-- Trapia and Santo Amaro
The main mine fleet would consist 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 would also be available for mine maintenance
and eventual plant services.
Processing
GE21 used a basic conceptual circuit for the concentrate plant
of the 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 2.2Mtpa
3. Mill product to be size-classified by cyclone, producing required flotation feed
4. Feed 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
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/mineral inventory" is used to
report that part of the Mineral Resource that has been considered
in the assessment. 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 PEA 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 assessment will be realized.
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 preliminary 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
GE21 is a specialist, independent mineral consulting company
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 significant 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.
Dr Ana Maria Tonani Pereira has an undergraduate degree in
Chemical Engineering with a Master's degree and a Ph.D. in Mining,
Metallurgy and Mineral Technology, Ana has 15 years' experience in
many ore beneficiation projects routes development for iron, gold,
silver, copper and PGM ores. She was the process specialist
responsible for conceptual, basic and detailed engineering projects
development, working for Vale and Ferrous Resources. She was the
process metallurgist responsible for many ore asset evaluations and
business risk analysis support for Ausenco, ECM, Miner and Hatch
amongst others. Dr Tonani is a certified Metallurgist Chartered
Professional by AUSIMM since 2012 and member #308899 since
2011.
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 & Nominated T: +44 (0)20 7409 3494
Adviser)
James Spinney / Ritchie Balmer / Jack Botros
Brandon Hill (Broker) T: +44 (0)20 3463 5000
Jonathan Evans/Oliver Stansfield
St Brides Partners Ltd (Financial PR) T: +44 (0)20 7236 1177
Isabel de Salis/Gaby Jenner
Notes
Jangada Mines plc is developing the Pedra Branca PGM 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 from
three existing mining licences with mineralisation commencing at
surface. The Project has a JORC compliant resource of approximately
1.45 million ounces of PGM+Au at a grade of 1.3 g/t, 140 Mlbs of
Ni, 26 Mlbs of Cu, and 9,7 Mlbs of Co. Previous operators have
spent more than US$35 million on exploration and development
activities, which include 30,000 metres of diamond core drilling,
geophysical surveys and metallurgical tests. Additionally, the
Company owns a further 43 exploration licences spanning 50,000
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 news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
END
MSCFPMFTMBBBMJP
(END) Dow Jones Newswires
June 18, 2018 02:17 ET (06:17 GMT)
Jangada Mines (LSE:JAN)
Historical Stock Chart
From Jun 2024 to Jul 2024
Jangada Mines (LSE:JAN)
Historical Stock Chart
From Jul 2023 to Jul 2024