Cabral Resources Limited announced that it has entered into an Option Agreement to acquire an exciting new hematite project in Bahia, Brazil. The area acquired lies within a region of known hematite and magnetite mineralization associated with an anomalous aeromagnetic signature.

Hematite enrichment with potential for direct shipping ore (DSO) production is known to occur locally. Of significance is the deep magnetic low in the northern tenement area, cross-cutting a NNW-SSE trending magnetic high associated with banded iron-formation.

Cabral believes this low holds potential for structurally-controlled hematite enrichment.
As with Cabral’s other tenure in this area, the new tenement lies close (<10km) to the new FIOL railway alignment and is 28km NNE from Cabral’s exploration base in Brumado.

The tenement is 257.64HA in area and lies close to another Cabral tenement where previous evidence of hard hematite was located during reconnaissance mapping. This acquisition is part of Cabral’s ongoing tenement acquisition and consolidation program in the region. It is anticipated that further ground will be acquired in the near future.

Under the terms of the Option Agreement, Cabral has paid a non-refundable deposit of R$300,000 (approximately A$181,000) to the local vendor for an exclusive 12 month option period to assess and explore the tenement area’s full potential.

At any time during the 12 month option period Cabral can elect to acquire the project for a cash exercise price of R$900,000 (approximately A$545,000). There are no other royalty or deferred payment arrangements associated with this transaction.

Cabral believes the aggregate purchase price of R$1,200,000 (A$726,000) represents a very attractive entry price for the high grade hematite ore potential within the project area – particularly given its close proximity to the East West Rail Line (or FIOL line) currently under construction.

With this transaction, Cabral has delivered upon its corporate objective of securing a high quality exploration prospect with DSO hematite potential. Whilst this project is a Greenfield one, it has the potential to generate early cash flows for Cabral.

Accordingly this project will be given significant priority in current exploration activity in terms of the Company’s focus and exploration program works.

Cabral is a Brazilian focused resources company seeking to become a significant iron ore producer in the State of Bahia. With experienced management and the ability to leverage off its quality relationships and global contact network, the company targets being a well placed producer by 2015.