Strong Financial Numbers For Brazillian Vanadium Project
Jangada Mines plc (AIM:JAN) has unveiled positive results from a Preliminary Economic Assessment (PEA) on its 100%-owned Pitombeiras Vanadium Project in Brazil.
The PEA 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.
It does not include the results of the current ongoing drilling programme nor additional beneficiation of the ore or recovery of Ti credits. The company said it expects to release a further PEA in late Q2, 2021 that will incorporate those additional factors.
Pitombeiras’ PEA delivers very robust project economics:
- US$106.5 million post-tax Net Present Value (NPV8%);
- 317.8% post-tax Internal Rate of Return (IRR);
- CAPEX totalling US$9.5m
- Payback time – 3 months
Executive Chairman, Brian McMaster, said further upside to economics expected to be delivered in a revised PEA including potential expanded mineral resources upon conclusion of ongoing drilling programme, which is anticipated to be Q2, 2021
The results of the PEA at current 5.5Mt of resources, as shown in the summary below, indicate an initial capital expenditure of US$9.5 million for a 1.1Mt (million tonne’) per year operation to deliver a NPV of US$106.5 million post-tax and 317.8% IRR.
Mr McMaster said 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.
“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,” Mr McMaster said.
“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.”