It is reported that things are hurrying along at Brazilian iron ore play Centaurus Metals, with a rush of recent news pointing to accelerated progress on the company's bid to replicate major shareholder Atlas Iron's success in Australia.
In recent months, Centaurus has not only ticked a number of boxes on development at its flagship Jambreiro deposit but released strong maiden drilling results from its Serro da Lontra project, the lynchpin of its export strategy.
The stream of news flow has added juice to Centaurus shares, aiding a recovery which has sent them one third higher to 64 cents over the past five weeks. Covering brokers, however, think the stock has a lot more in it.
Hartleys, which has the stock as a speculative buy, has a 12 month price target of USD 1.89 on Centaurus, while Ord Minnett ranks it a high risk buy with a USD 2.20 target, describing it as an outstanding iron ore development story.
The most significant recent milestone for Jambreiro was Centaurus's lodgment of the primary environmental approval documents with regional authorities. The company, whose bankable feasibility study is due for completion in September, is hoping to secure a licence in October 2011 in line with a timetable which would have Jambreiro producing by the end of 2013.
A resource update at the end of May 2012, which is expected to shunt a significant portion of Jambreiro's 114 million tonnes into the measured category, will provide further clarity. The resource is low grade at 36.8% but Centaurus believes it can be beneficiated to a high grade hematite product of between 63% and 67%.
It has supported by initial pilot plant testing of a 2.5 tonne sample during the March 2012 quarter which turned out a low impurity product grading 65.6%.
Testing of a 50 tonne sample will get underway next week, paving the way provided there are no hitches to Centaurus to enter negotiations on offtake agreements with Brazilian mills.
At Serro da Lontra, to the north east, the company is chasing up to 50 million tonnes and is aiming for a JORC resource by July 2012.
Source - WA News
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