Centaurus Metals has divested its Conquista Iron Ore Project in south‐east Brazil to privately‐owned Brazilian mining group, R3M Mineração.

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Image: Centaurus Metals sell Conquista iron ore project in Brazil. Photo courtesy of PinkBlue/FreeDigitalPhotos.net.

The transaction is consistent with the Company’s corporate focus on base metal exploration in the world‐class Carajás Mineral Province of northern Brazil.

Under the terms of the Agreement, R3M will pay R$500,000 (~A$185,000) to Centaurus in mid‐December 2018 and has also granted the Company a 12% production royalty on all future production from Conquista and a number of surrounding exploration tenements which are prospective for iron ore. As part of this arrangement, Centaurus will receive an upfront payment of R$1.5 million on the commencement of production from Conquista as an advance of the production royalty.

Centaurus’ Managing Director, Mr Darren Gordon, said the Company was pleased to be able to crystallise value from the sale of the Conquista Project to R3M, with the privately owned group being ideally placed to take the asset forward given the ownership group is already operating in the immediate region at the nearby Candonga DSO Project which was acquired from Centaurus in 2016.

“R3M understand the domestic iron ore and pig iron markets and see the potential to bring niche DSO assets into production relatively quickly,” he said. “Importantly for Centaurus, we will maintain exposure to the success of the project and its potential future cash flows via a strong production royalty.

“Assuming that Conquista ultimately reaches production levels similar to those seen at the neighbouring Candonga Project, and based on the current Conquista Project Exploration Target, the royalty has the potential to deliver significant value to us even with conservative assumptions on average mine gate sales prices over the next 5‐6 years.

“We will continue to drive the process of extracting value from our iron ore asset base – the next step in which would involve a transaction relating to our development‐ready Jambreiro Iron Ore Project, which we believe could generate very significant cash flows in the current iron ore market environment where significant premiums exist for high grade, low impurity ore.”

Source: Company Press Release