Horizonte Minerals (LSE:HZM) was awarded a critical construction licence for its flagship ferronickel project in Brazil yesterday. The news helped shares in the nickel development company advance by as much as 8.9pc to 2.3p.

The construction licence, known locally as the Licença de Instalação (LI), applies to Horizonte’s 100pc-owned Araguaia ferronickel project. It was granted by SEMAS, the Brazilian Para State Environmental Agency. It gives Horizonte the permits required to construct a rotary kiln electric furnace processing plant at Araguaia. This means it is now fully permitted for construction to begin.

Horizonte called the news a ‘major de-risking step’ for Araguaia, with chief executive Jeremy Martin adding that it represents a ‘major milestone’ for the business.

‘Subject to funding, the company is now in a position to commence construction with the necessary environmental permits approved, including water abstraction permits issued in 2018 together with the newly issued LI,’ said Martin.

‘The LI allows development to commence on the RKEF process plant and associated infrastructure. The award of the LI has been delivered on time and on budget with the Horizonte team working closely with SEMAS, other State agencies and the local communities. Consistent with our objective to provide long-term sustainable value for our shareholders, employees and communities, we developed integrated solutions focused on environmental protection, water efficiency and socio-economic development.

Today’s approval follows the release of a feasibility study results for the asset in October. These were filed with the Para state government two months later.

The study confirmed Araguaia as a low-cost source of ferronickel for the stainless-steel industry. It gave the project an initial 28-year mine life, during which it will generate cash flows after taxation of $1.6bn.

Meanwhile, it has an estimated post-tax net present value (NPV) of $401m and an internal rate of return (IRR) of 20.1pc using a base case nickel price forecast of $14,000/t.  This NPV increases to $740m when using the consensus mid-term nickel price of $16,800/t.

Horizonte expects Araguaia to produce an average of 14,500 tonnes of nickel a year, housed within 52,000 tonnes of ferronickel. Against this, the development has a capital cost estimate of $443m. This includes $65.3m of contingencies.

Crucially, Horizonte has also designed the study to accommodate a second process line. This 'stage two expansion' could double Araguaia’s production capacity to 29,000 tonnes a year. Its introduction assumes a stage one production rate of 900kts a year for three years. After this period, Horizonte would reinvest free cash flows to extend the plant's capacity to 1.8Mts per year.

If this expansion takes place, then Araguaia will have a 26-year mine life and generate cash flows after tax of $2.6bn. Meanwhile, the asset’s NPV and IRR would hit $741m and 23.8pc respectively, using base case nickel prices.

Horizonte is also the owner of the Vermelho project in Brazil, which it describes as one of the largest, highest-grade undeveloped laterite nickel-cobalt resources globally. The site contains a measured and indicated resource of 167.8MMts, estimated to house 1.68MMts of nickel and 94,000ts of cobalt.

In yesterday’s update, Martin said the progress at Araguaia combined, the potential on offer at Vermelho, and the attractive nickel market backdrop combine to set Horizonte up well for the rest of the year:

‘The LI and FS results combined with the positive fundamentals around the nickel market positions Horizonte well for 2019, with the construction-ready Araguaia project to supply the ferronickel market and our second project, the Vermelho nickel-cobalt project, being advanced to supply the Electric Vehicle battery market. We look forward to updating the market over the coming months, at what is an exciting time for the Company.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Chesterfield Resources (LSE:CHF) bounced 6.3pc to 4.3p this morning after hiring a senior geologist as its chief operating officer. Michael Parker will take on the role at Chesterfield’s 100pc-owned copper exploration project in Cyprus.

Parker is a geologist with more than three decades of experience in both exploration and project development. He began his career in gold exploration across South Africa and Gabon. He then then joined First Quantum Minerals (FQM) in 1997 as an exploration geologist in Zambia and Zimbabwe.

He remained at FQM for 20 years, holding numerous senior country manager positions while playing a key part in major copper discoveries. These included the Frontier Mine, which contains 2.1Mt of copper, and the high-grade Lonshi, which boast 250,000ts of contained copper at an ore grade of 5pc. Parker modelled the resources and oversaw mine planning and operations at both mines.

In his country manager roles, Parker took on administrative management responsibility for up to 3,000 staff, including a large expat contingent. He also oversaw government and community relations, environmental management, and exploration permitting.

Chesterfield controls three project areas in Cyprus. These comprise seven granted prospecting permits and six applications for prospecting permits. According to the firm, these project areas cover abandoned mines, known prospects with exposed mineralisation, and other indicators of nearby massive sulphide systems. The company’s initial focus will be on advancing the Troodos West Project, where it has already identified numerous high-priority prospects.

Chesterfield’s executive chairman Martin French said: ‘Mike brings a tremendous amount of experience in exploration and management from his long career at First Quantum Minerals. Most importantly, he has experience in making large discoveries. Mike has already been working with Chesterfield over the past three months on a Project Management basis helping to expand our copper exploration programme in Cyprus.

‘During this time Mike has become very confident in our prospects, which has attracted him to take a permanent role. The Company has been encouraged by its early drilling results and so has made the decision to significantly enlarge its exploration programme in Cyprus. We will provide more details of this in the coming weeks.’ 

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Cora Gold (LSE:CORA) is primarily focussed is on two prolific gold regions in Mali and Senegal in West Africa. Today the company announces the appointment of Wardell Armstrong International (WAI) as independent consultants to undertake a preliminary metallurgical test work programme at the company's Sanankoro Gold Discovery in southern Mali. The test work programme will assess the amenability for cyanide leach extraction of gold from oxide mineralization at the discovery. Both cyanide-in-leach (CIL) and heap leach gold extraction technologies will be tested at WAI's laboratory facilities with results expected in Q2 2019.

In October, Cora announced that SRK Consulting had determined an initial Exploration Target of between 30 and 50 million tonnes of gold ore at a grade of between 1.0 and 1.3 g/t Au at Sanankoro. The company believe there is the potential to delineate 1-2 million ounces of gold to a depth of 100m.

The first round of drilling has indicated the possibility of significant further upside at depth and Cora is now looking to define the strike extent and depth potential of the higher grade zones that may exist.

It is also worth noting that Sanankoro is adjacent to the African Gold Group ‘Kobada Gold Project. The Kobada Project has a 1.2 Moz measured and indicated resource and occurs on a NE-SW orientated structure that runs parallel to the Sanankoro mineralisation.

Cross-Sections: Broad zones of mineralization along strike

Jonathan Forster, Cora Gold's CEO, commented, "We are pleased to appoint WAI as our independent consultants for this preliminary metallurgical test work programme which is intended to provide initial guidance on methodology for future potential gold extraction at Sanankoro.  This programme is running in parallel with a drill programme, already underway, that is aimed at outlining areas of higher grade that may present potential starter pits for any future mining project.  Indications from SRK's Exploration Target Report that there is significant potential for oxide mineralisation at Sanankoro has guided our exploration programme which is currently focused on the exciting oxide potential at Sanankoro.  We are delighted to kick off the year with an active work programme and I look forward to reporting the results of the metallurgical test work targeted for Q2 2019, as well as drill results as and when they become available."

 

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

The gold price has enjoyed a strong rise since its lows of $1161 in August, hitting $1299 on Friday. Having subsequently dipped to $1276, the precious metal, currently $1292, may again be climbing to test resistance.

 

The Relative Strength Index (RSI) signalled gold was overbought, with the price peaking out as the RSI met a trend line formed from the previous two RSI peaks. A trend line of RSI support also held strong as gold retraced to $1276 before bouncing. The resistance zone between $1296-$1308 should prove to be strong - the area has been subject to considerable consolidation during the summer of 2018, as well as it being a previous area of repeated support during the six months prior to that.

 

With the RSI again warming up, and significant resistance ahead, it seems likely a deeper retracement is on the cards. However, a distinctive Cup and Handle pattern has been forming since June. This notorious pattern often results in a break to the upside. If the pattern follows protocol, a ‘handle’ shape should appear to form with lower price action before a bigger move upwards should it break out of the pattern. It’s also worth noting that the 50 Day Moving Average (DMA) moved higher than the 200 DMA a week ago. This event, called a ‘Golden Cross’ is regarded as a bullish signal.

 

At this moment in time it’s possible that the Cup section of the Cup and Handle pattern is still forming but the top of the pattern isn’t required to be completely horizontal – we will know soon enough if it fails to close higher.  A potential outcome that would fit all observations might be a retracement to the $1260 area which appears to be a logical level of support and still allows a typical Cup and Handle formation to complete – generally speaking the handle should not drop into the lower half of the cup and should ideally stay in the upper third. In the event price action moves positively into the resistance zone it will be worth keeping an eye on the RSI for further indications of exhaustion from buyers.

 

A lower dollar is generally positive for most commodity prices. The Dollar’s climb through 2018 will have contributed to the drop in the gold price, and its recent pullback has boosted golds reversal. In the last few days of 2018, the US Dollar Index indicated it had peaked – at least for now – falling out of a barish Rising Wedge pattern (shown in red). Although not always the case, this pattern often results in a strong move down, sometimes as much as the height of the pattern. Immediate levels of support can be found around 94.50 and 93.50.

 

 

The recent pullbacks across global markets, increased volatility, and a decreasing dollar will have contributed to gold’s recent bullish run, but if markets start to settle and confidence returns, the gold price rally may start to falter. A successful breach of the resistance zone at $1308 will likely require the winds of fear to continue blowing or the Dollar to give back more of the ground it made up last year.

Author: Stuart Langelaan

KEFI Minerals (LSE:KEFI) dipped 3.9pc to 1.44p after announcing a one-month delay at its flagship Tulu Kapi gold mine in Ethiopia.

The business had expected to receive government regulatory consents for the project by the end of December. This is a condition for local partner ANS Mining Share Company to release its first $9m tranche of investment into TKGM, the business in control of Tulu Kapi. As confirmed last October, this will be followed by another payment of between $21-29m later in 2019.

In today’s update, KEFI said the government has now provided numerous formal consents. However, it said there remain several that are still subject to ‘processing formalities’. As a result, the project partners have extended the deadline for receiving all permissions to the end of January.

KEFI said it believes this extension will have a ‘minimal impact’ on Tulu Kapi’s progression. Meanwhile, the company said its partners have reiterated their support for the project's development and financial plan. As well as KEFI and ANS, these associates include the Ethiopian Federal Government.

The business added that the partners have backed a focus on maintaining progress at Tulu Kapi while scheduling regular reviews. They believe this will ensure the project advances safely and securely.

KEFI has been progressing Tulu Kapi towards development since being granted a mining licence in April 2015. Estimates for output at the project include open-pit gold production of c.140,000oz per annum for seven years with an all-in sustaining cost of $800/oz. The project’s ore reserve estimate totals 15.4Mt at 2.1g/t gold, containing 1.1Moz.

In today’s update, the business said it has made further progress at the site over recent weeks. This has included drilling for infrastructure design and land clearing. Meanwhile, the first steps towards a community resettlement program are due to start later this month. An independent reviewer will assess these plans to ensure they meet Equator Principles and the needs of residents.

Finally, KEFI’s managing director Harry Anagnostaras-Adams said the business starts 2019 ‘heartened’ by the current gold price outlook. He is also enthusiastic about the continuing positive transformation of the Ethiopian political situation and level of support from major industry players.

‘We are confident that with this cautious and disciplined strategy, our well-qualified consortium provides an excellent platform to launch our Tulu Kapi Gold Project,’ he added.

When ValueTheMarkets.com spoke to Anagnostaras Adams in October last year, he said Tulu Kapi would enjoy a first-mover advantage in Ethiopia.

He said: ‘The gold sector in Ethiopia is conspicuous by its absence, given that its geology suggests it should be a prolific producer. With that in mind, once we reach production at Tulu Kapi, we will have a first-mover advantage. When we first got the project, it was nearly ready, and we have been working ever since to get it to the starting line. The first step was re-designing the mining and processing plans, which reduced the AISC to $800 from $1000. Then, we secured financing to get the equity requirement down to $50-60m. Last week’s funding gets us to the point where we have these funds and puts us on very steady footing moving forward.’

Author: Daniel Flynn

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

On Wednesday SolGold (LSE:SOLG) updated the market with details of exploration activities from its 100% owned Porvenir Project in southern Ecuador. Over the past five years, Ecuador has been recognised globally as a frontrunner in emerging mining nations. SolGold is the largest and most active concession holder in the country and is aggressively exploring the length and breadth of a highly prospective and gold-rich section of the Andean Copper Belt. The Australian company has formed four 100% owned subsidiary companies in Ecuador; Carnegie Ridge Resources S.A., Green Rock Resources S.A., Cruz del Sol S.A. and Valle Rico Resources S.A. The subsidiaries currently hold 73 mineral concessions over approximately 3,200km2 in Ecuador.

To date exploration activity has identified 15 potential porphyry centres at SolGold’s flagship copper-gold deposit, the Cascabel Project. SolGold published its maiden Mineral Reserve Estimate for Alpala, the main target in the Cascabel concession in January 2018. Alpala has produced some of the greatest drill hole intercepts in porphyry copper-gold exploration history.  Over 145,000m of diamond drilling has been completed on the project and SolGold currently produces around 10,000m of core every month.

The plan is to apply the exploration blueprint developed at Cascabel to the Porvenir Project in southern Ecuador and elsewhere.

Location plan showing the Porvenir project in southern Ecuador

The company reports the discovery of ‘exciting’ new porphyry copper-gold mineralisation at Target 15, located on the Porvenir 2 concession. A broad zone of north east trending porphyry mineralisation approximately 1km wide and hosting numerous porphyry centres currently defined over 6 km long and open ended has been defined. This includes a 800m-wide mineralised corridor more than 1200m long recognised at Target 15 consistent with exposure of a vertically extensive, well-preserved porphyry copper-gold system.

Rock saw channel sampling copper and gold results from La Cacharposa creek in Target 15 at Porvenir

SolGold CEO, Nick Mather commented, "The result at Porvenir especially at Target 15, indicates the effort SolGold puts into its first mover advantage secured in 2014 across Ecuador. SolGold's team of geoscientists led by Dr. Steve Garwin, porphyry expert, recognised several targets with the right geochemical, geological and geophysical signature and SolGold has so far secured 11 of them. SolGold is committed to leading the development of a sustainable copper-gold mining industry in Ecuador. The high grades and strong gold endowment at Alpala and Porvenir provides SolGold with a unique opportunity to develop this Company without resorting to dilutive and erosive joint ventures. 

SolGold has identified and secured the best of an entire copper-gold province, the size and metallogenic signature of northern Chile. That's a unique approach that can't be replicated. We are confident that Alpala and now Porvenir Target 15 are the first projects in a long, large and rich string of them. We have the cash, the expertise and the focus to deliver"

 

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

 

 

 

On Friday, Goldstone Resources (LSE:GRL) announced it had entered into a loan agreement with major shareholder, Paracale Gold. The loan of $1.224m will accrue interest of 6.0% per annum and is to be repaid in full by 2nd June 2022. Goldstone will draw down $324k immediately with three further tranches of $300k available over the next nine months.

Paracale Gold’s existing 40,352,377 warrants will be cancelled and replaced with the same number , exercisable at 1.2p at any time time until 2nd June 2022.

The loan will provide Goldstone with funds to continue advancing its Akrokeri-Homase project in the Ashanti region of south-western Ghana. The project lies 8 km along strike from the Obuasi Gold Mine, one of the world’s major gold mines with a total historical and current resource in excess of 70M ounces.

Two previously producing assets in the world class Ashanti Belt are included in the project; the high-grade Akrokeri underground mine and Homase open-pit mine. Goldstone is aiming to deliver gold production from both mines by mid-2020.

The Akrokeri mine previously produced 75,000 ounces of gold at a recovered average grade of approximately 24g/t Au, while historical recovery from the Homase open-pit mine totals 52,000 oz Au at an average grade of 2.5g/t. 

Goldstone reported in December that shallow workings are currently being mapped as they are made safe at the Akrokeri mine while a pilot heap leach project is underway at the Homase open-pit mine.

Emma Priestley, CEO of GoldStone, commented:

"Paracale Gold shares the Company's vision for the development of the Akrokeri-Homase Project in Ghana.  In what remains a challenging market for the natural resource sector, we are pleased to have secured the necessary funding to continue the advancement of AKHM and we welcome and value the continued support of our major shareholder, Paracale Gold as we seek to bring AKHM into production by mid 2020."

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Goldstone Resources (LSE:GRL) provided an update on Friday regarding developments at its Akrokeri-Homase Gold Project in south-western Ghana. The Project includes two previously producing assets in the world-class Ashanti Belt, the high-grade Akrokeri underground mine and Homase open-pit mine. Goldstone is aiming to deliver gold production from both mines by mid-2020.

The Akrokeri mine previously produced 75,000 ounces of gold at a recovered average grade of approximately 24g/t Au, while historical recovery from the Homase open-pit mine totals 52,000 oz Au at an average grade of 2.5g/t.

The project lies 8 km along strike from the Obuasi Gold Mine, one of the world’s major gold mines with a total historical and current resource in excess of 70M ounces.

Work continues to make the shallow workings safe at the Akrokeri mine, and those that have been accessed are being mapped. At the North Shaft, where Level 1 the process of clearing out old rails, wood and debris is underway to form safe access to continue working in the shaft for the reopening of the mine to access the workings down to 400 feet.

A pilot heap leach project is underway at the Homase open-pit mine. Heap leaching is a process involves a series of chemical processes, through which the mineral ores are piled into the form of a heap, and a leach solution is spread over the ore surface to leach metal from the heap. The process can take several weeks or months and Goldstone reports after the first 40 days of its pilot, recoveries are 67.5% using 2.5 tonnes of material from Homase South.

The University of Mines and Technology (UMaT) in Tarkwa, Ghana, estimates that the leach cycle will be 65 days with recoveries of up to 80%. The oxide zone within Homase South is demonstrating suitability to the low-capex leaching treatment.

A planned Scoping Study will also look at the Homase North Resource Zone within the Homase Trend and the Environmental Baseline Study has also been expanded to include the potential Homase North pit.

Emma Priestley, CEO of GoldStone, commented:

"Our strategy of advancing development at both Akrokeri and Homase is centred on achieving production at multiple mining operations in as short time as practicable.  Akrokeri has the distinct advantage of demonstrating exceptionally high-grade material, including intercepts of 1.0 metre at 51.01 g/t Au, and established mining infrastructure, whilst Homase offers the potential benefit of being amenable to low capital heap leach treatment.  When looking at the assets in unison, I am confident that GoldStone has a clear pathway to production in mid-2020, utilising the significant support and expertise of our strategic shareholders and team who have a proven track record in building gold mines."

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

On Tuesday, Rockfire Resources (LSE:ROCK) announced it had identified ‘outstanding past drilling results’ in a review of historical drilling at the Native Bee prospect within the Kookaburra exploration license. Rockfire confirmed it had acquired the license in August increasing the company’s acreage in Queensland, Australia.

The Kookaburra license surrounds Rockfire’s Lighthouse tenement in the Charters Towers district and the explorer says it is targeting a medium- to large-scale, near surface gold resource. Rockfire is securing a significant ground-holding in a district that has produced more than 20 million ounces of gold and continues to produce from three operating, multi-million-ounce gold mines.

The Native Bee prospect lies on a discrete 500m-wide magnetic high anomaly and Rockfire's technical team have identified high-temperature fluid pathways. Since elements have different temperatures of precipitation, an elemental heat map can be generated. The heat map below reveals previously unidentified exploration target zones.

Chief Executive Officer of Rockfire, David Price considers the exploration potential at Native Bee to be ‘very high’ and said: 

"Our strategy of systematic appraisal of each of our numerous prospects has identified Native Bee as a high-priority exploration target within the Kookaburra licence. Pegging the Kookaburra tenement has proved to be a prudent, strategic move and is providing Rockfire with material growth opportunity. It is surprising that this prospect has been sitting dormant and unexplored for over 25 years".

The prospect was primarily explored by Dalrymple Resources between 1988 – 1990. Forty-four RAB and RC holes were drilled returning best intervals of 8m @ 2.18 g/t Au, including 3m @ 5.13 g/t Au from 26m vertical depth, and 16m @ 2.14 g/t Au, from 35m vertical depth.

Price comments: "Historical drilling at Native bee has intersected potentially economic gold grades and widths close to surface. This fits nicely with Rockfire's deliberate strategy of accumulation of near-surface gold resources within trucking distance of operational gold processing facilities. Native Bee lies 29km from the operating Pajingo Gold Mine processing facility".

Rockfire has been granted the Kookaburra exploration license, which covers 232 sq. km, for five years and is planning to commence follow up work in early 2019.

Price said: "Rockfire will continue to appraise and rank each of its prospects in conjunction with on-going ground fieldwork. The Company intends to follow up these past significant results with detailed geological and structural mapping. In addition to the mapping, a gradient array IP geophysical and ground magnetic survey will be scheduled for the 2019 field season. Geophysics is expected to highlight the continuity of the sulphide-enriched zones at depth, in order to pinpoint accurate targets for drilling." 

Author: Stuart Langelaan

The Author does not hold any position in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance

Jangada Mines (LSE:JAN) announces a significant improvement to the economics of its Pedra Branca project through the addition of a JORC compliant nickel and copper sulphide resource. The new resource will be included in the Bankable Feasibility Study (BFS), slated for delivery in H1 2019, and is expected to substantially improve already favourable economics.

The company announced it had identified the mineralization in October. The new nickel resource conveniently sits below the existing target PGM resource and planned open-pit mine. Since the nickel can be processed and recovered using the same plant as the PGMs there will be minimal additional CAPEX required making extraction economical.

Its estimated the new resource consists of around 8.2 million tonnes of mineral which the company believes could be worth an additional $110m project revenue at today’s spot price. Jangada also highlights that there is a strong chance the resource can be increased further as it is open at depth and along strike.

Brain McMaster told MiningMaven:

“Today’s news is highly positive for Jangada. The inclusion of our maiden nickel resource significantly improves Pedra Branca's economics, for what should be a minimal increase in the cap-ex requirement. The reason for this is that the nickel sulphide body is close to the existing PGM resource and will get processed by the same plant, so no additional plant will be required.”

This is a great way for us to end 2018 and marks what I expect will be the beginning of a period of increased news flow, as we advance towards completing the Bankable Feasibility Study in the spring.”


Pedra Branca covers around 48,000 hectares and Jangada estimates the project will produce around 64,000 ounces of PGM+Au per annum.

At today’s platinum price of $787, forecast production would generate a rough ballpark figure for revenues of $50.368m. That’s a conservative calculation since Spot palladium and gold are priced significantly higher at $1250, and $1240 respectively.

In November Jangada announced a 32% reduction in total capital expenditure required, estimating costs for year one of $81.482m. This suggests an impressive payback time on initial investment of just 1.62 years.

Today’s JORC resource addition further enhances project economics at Pedra Branca, while fundamentals for nickel and copper continue to look strong due to decreasing supply and increased demand from new battery technologies.

Brian McMaster, Chairman of Jangada, said: “Our ongoing work has enabled us to further understand the dynamics, scale and potential of the ore-body; the Project’s main economic drivers are palladium, platinum and nickel and the associated by-products are essentially cream on the top. “The planned processing route allows us to process and recover all metals in one concentrate from the one plant, meaning that the economics of Pedra Branca have improved substantially. We expect to demonstrate this in the upcoming BFS. Clearly, the current NPV of US$192 million against the Company’s current circa £6 million market cap demonstrates a disparity between asset and valuation; we expect this gap to close substantially as we continue to de-risk the Project.”

Author: Stuart Langelaan

The Author currently holds a position or positions in the stock(s) and/or financial instrument(s) mentioned in the piece.
The Author has not been paid to produce this piece by the company or companies mentioned above.
Catalyst Information Services Ltd, the owner of MiningMaven.com, has not been paid for the production of this piece by the company or companies mentioned above.
MiningMaven.com and Catalyst Information Services Ltd are not responsible for its content or accuracy and do not share the views of the author.  News and research are not recommendations to deal, and investments may fall in value so that you could lose some or all of your investment. Past performance is not an indicator of future performance