Jangada upbeat on latest economic assessment at Pitombeiras

(Sharecast News) - Natural resources company Jangada Mines announced the results of a preliminary economic assessment on its wholly-owned Pitombeiras Vanadium Project in Brazil's Ceará State on Tuesday, reporting that it delivered "very robust" project economics.
The AIM-traded firm said the project had a post-tax net present value of $106.5m, and a post-tax internal rate of return of 317.8%.

Capital expenditure would total $9.5m, the board said, with the project having a payback time of three months.

A further upside to economics was expected to be delivered in a revised preliminary economic assessment, the company said, including potential expanded mineral resources on the conclusion of its ongoing drilling programme, which was expected in the second quarter.

Results from ongoing new metallurgical tests through dry magnetic separation would provide the basis for product placement discussions with potential traders and off-takers.

Jangada said the "simplicity" of operations and the processing route made the project amenable to a fast-track approach to production and cash flow.

First production was expected in the first quarter of 2022.

"We are very pleased with the results of Pitombeiras' preliminary economic assessment 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," said executive chairman Brian McMaster.

"This preliminary economic assessment 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 assessment are based on only two out of eight known targets selected based on ground magnetic survey."

McMaster said that besides the expected resource expansion, the company was also working on completing the new metallurgical tests through dry magnetic separation, the results of which would provide the basis for starting constructive discussions with potential traders and off-takers.

"We also see a feasible opportunity to significantly reduce initial capital expenditure, which along with increased resources and life-of-mine, will significantly impact an already robust project net present value and internal rate of return.

"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 preliminary economic assessment with the inclusion of the discussed upsides is expected to be delivered by end of the second quarter of 2021."

At 1525 GMT, shares in Jangada Mines were up 28.1% at 10.76p.