Positive Preliminary Economic Assessment for its Pitombeiras Vanadium Project
To view the announcement with the illustrative images please use the following link: http://www.rns-pdf.londonstockexchange.com/rns/2303P_1-2021-2-16.pdf
Jangada Mines plc (“Jangada” or “the Company”‘), a natural resources company is pleased to announce the results of a Preliminary Economic Assessment (“PEA”) on its 100%-owned Pitombeiras Vanadium Project (“Pitombeiras” or “the Project”), Ceará State, Brazil. The PEA was prepared by GE21 Consultoria Mineral (“GE21”) and is compliant with National Instrument 43-101 (“NI 43-101”). It confirms that Pitombeiras has robust economics and excellent potential to become a profitable producer of Ferrovanadium concentrate (62%/65% Fe, plus V2O5 credit).
The PEA discussed herein, is based only on the initial resource estimate announced in August 2020 and at this stage of development, has focused only on evaluating a Direct Shipping Ore (“DSO”) operation for the sale of a saleable magnetite concentrate containing a minimum of 62% Fe and additional credit from 25% contained V2O5 in furnace slags.
This PEA does not include the results of the current ongoing drilling programme nor additional beneficiation of the ore or recovery of Ti credits. The Company expects to release a further PEA in late Q2, 2021 that will incorporate those additional factors.
Highlights:
· Pitombeiras’ PEA delivers very robust project economics:
o US$106.5 million post-tax Net Present Value (“NPV8%”);
o 317.8% post-tax Internal Rate of Return (“IRR”);
o CAPEX totalling US$9.5m
o Payback time – 3 months
· Further upside to economics expected to be delivered in arevised PEA including potential expanded mineral resources upon conclusion of ongoing drilling programme. Anticipated to be Q2, 2021;
· Results from ongoing new metallurgical tests through dry magnetic separation to provide the basis for product placement discussions with potential traders and off-takers;
· Simplicity of operations and processing route makes the project amenable to a fast-track approach to production and cash flow. First production anticipated for Q1, 2022;
The objective of this PEA was to demonstrate the very robust economics that the quality of the Pitombeiras ore could provide by benefiting from prevailing peak iron ore prices and additional vanadium credits. This PEA is based only on the existing resource estimation. Further upside is expected through the delineation of expanded total resources to be calculated upon conclusion of ongoing drilling programme. Jangada has also started discussions with potential traders and smelters for the placement of its product post ongoing metallurgical results and product certificates.
The results of the PEA at current 5.5Mt of resources, as shown in the summary below, indicate an initial capital expenditure (“CAPEX”) of US$9.5 million for a 1.1Mt (‘million tonnes’) per year operation to deliver a NPV of US$106.5 million post-tax and 317.8% IRR.
The Project can be developed with a small starter open pit operation utilising a contract mining fleet of hydraulic excavators, front-end loaders, 30 tonnes haul trucks, rotary drill rigs and ancillary equipment. The selected beneficiation process route is composed by crushing and screening, and dry magnetic concentration. Jangada anticipates first production can be achieved by Q1, 2022.
Brian McMaster, Executive Chairman of Jangada, said : “We are very pleased with the results of Pitombeiras’ PEA as it defines a project with very robust economics and remarkable potential for further growth, which we expect to demonstrate in the following months upon the conclusion of the current drilling programme and delivery of upgraded and expanded resources as we keep extending Pitombeiras North’s orebody footprint. This PEA is effectively a simplified monetisation strategy and Management thought it was useful to inform the market that in its most basic form, the project looks extremely robust. Also, notice that total resources considered in the PEA are based on only two out of eight known targets selected based on ground magnetic survey. Besides the expected resource expansion, we are also working on completing the new metallurgical tests through dry magnetic separation, the results of which will provide the basis for starting constructive discussions with potential traders and off-takers.
“We also see feasible opportunity to significantly reduce initial CAPEX, which along with increased resources and Life of Mine, will significantly impact an already robust Project NPV and IRR. In addition, we would like to highlight the simplicity of the operations and processing route, which makes the Project amenable to a fast-track approach to production and cash flow, very opportune at times when we see peak iron ore prices and recovering vanadium prospects. A revised PEA with the inclusion of the discussed upsides is expected to be delivered by end of Q2 2021.”
Operational Highlights
• 1.1Mtpy production rate;
• Life of Mine (“LOM”): approx. 6 years based on initial resource;
• Total LOM Mineable Resources: 5.5Mt based on mineral resource estimate disclosed in August 2020;
• LOM average strip ratio: 0.64 t/t Waste/Ore;
• Processing by crushing and screening, and dry magnetic concentration, producing a marketable Ferrovanadium (“FeV”) concentrate;
• Total LOM production of 2,590,000 tonnes of 62% Fe and 25% V2O5contained in furnace slags
Financial Highlights
• US$106.5 million post-tax NPV (at a 8% discount rate);
• 317.8% post-tax IRR;
• US$136.3 million post-tax, undiscounted cash flow;
• US$271.3 million total gross revenue;
• Post-tax payback period of 3 months;
• US$9.5 million initial capital cost;
• US$1.98 per tonne mined average operating cost;
• US$4.62 per tonne processed average operating cost.
Note: The PEA is preliminary in nature. It includes inferred mineral resources, which are considered too speculative geologically to have the economic considerations applied to them that would enable their categorization as mineral reserves. There is no certainty that the PEA forecast will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
Pitombeiras Project Upside Potential
• Upon the conclusion of ongoing additional bench and laboratory scale dry magnetic separation tests, the Company expects to increase its level of confidence on V2O5 recoveries, allowing Jangada to engage on the next level of constructive discussions with traders and off-takers.
• No TiO2 (“titanium dioxide”) potential credits have been considered in the economics of the PEA.
• The ongoing drilling programme at Pitombeiras has demonstrated that the vanadiferous titanomagnetite (“VTM”) mineralisation at the Pitombeiras North target extends in both N-NE and N-NW directions and continues to be open along the strike (Figure 1).
• The total resources considered in the PEA are based on two out of eight known targets selected based on ground magnetic survey (Figure 2).
• The PEA will benefit with increased resource tonnage to be prepared upon conclusion of ongoing drilling programme.
Figure 1. Pitombeiras North Target Drilling Grid and Resource Area – See PDF
Figure 2. Selected Targets Based on Ground Magnetic Survey – See PDF
PEA
Project Location
The Pitombeiras Vanadium Project is located within the municipality of Tauá in Ceará State, Northeast Region of Brazil. The Project lies approximately 280km southwest of Fortaleza, the capital of Ceará State, Brazil. Primary ground access to the Project is through paved Federal Highway (BR-020), which connects Fortaleza town to Brasilia Federal District (the capital of Brazil). Departing southbound from Fortaleza, it takes about 4 hours to drive 290 km along the BR-020 highway. At this point, the access to the project is through a 5 km drive eastbound on unpaved gravel road until arrive the eastern boundary of the mineral property. Regular commercial flights are daily available to the International Airport of Fortaleza. The timing for the ground access departing from Fortaleza to the project area is about 4 ½ hours.
Geology
The local geology of the Project is characterised by the presence of mafic and ultramafic rocks ( meta-basalts, meta-gabbros, serpentinites and talc schists) with local intercalations of meta-trondhjemites as part of the Troia Unit, and also by medium to coarse-grained granite-orthogneisses, with a calcic-alkaline affinity with pegmatite injections and meta-ultramafic lenses belonging to Pedra Branca Unit.
The Pitombeiras vanadium mineralisation is associated with a large airborne magnetic anomaly identified by Anglo American Platinum Exploration in 2013. The geological features indicate that the vanadium mineralisation on Pitombeiras can be correlated with the Vanadiferous Titanomagnetite (“VTM”) type deposits found throughout the world, which are the principal source of vanadium.
The main economic aspects for VTM deposits include (i) the ore grade, (ii) the concentrate grade and (iii) the mass recovery.
Mineral Resources
The initial Mineral Resource Estimate (“MRE”) for Pitombeiras has been disclosed on Press Release dated August 19, 2020, which can be found via the following link:
https://www.rns-pdf.londonstockexchange.com/rns/4794W_1-2020-8-18.pdf
The MRE has been prepared in accordance with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Standards on Mineral Resources and Reserves: Definitions and Guidelines, May 10, 2014 (CIM, 2014), by Mauricio Prado, MSc. Geologist and Qualified Person, as defined by NI 43-101 guidelines, with effective date of 2 August 2020.
This initial MRE includes two exploration target areas, the Pitombeiras North and Goela targets, which are part of the eight ground magnetic priority anomalies identified with VTM signatures over a total area of 1,958 hectares.
A total of 24 diamond drill holes have been completed for a total of 1,705.95 metres, including 1,232.90 metres at the Pitombeiras North target and 301.95 metres at the Goela target. 20 drillholes intersected VTM mineralisation.
