International iron ore company, Centaurus Metals Ltd, announced Friday that it has acquired a portfolio of tenements in south-eastern Brazil known as the Serra do Lontra Project. The acquisition is the initial basis of Centaurus’ strategy to export 1-2Mtpa of high-grade hematite to international markets by mid-2014.

The Serra do Lontra Project is found in the State of Bahia, Brazil and consists of 12 tenements, 1 being a granted Exploration License which the Company has acquired and 11 being Exploration License Applications made by Centaurus. The Exploration Licence Applications should be granted within 6 months.

Under the terms of the acquisition, Centaurus will pay a total of US$3 million for the Granted Exploration Lease, with an initial payment having already been made concurrent with the transfer of title to the Company. Further payments are to be made over an 18 month period based on the progress of the exploration activities on the Granted Exploration Lease.

In establishing the Exploration Target of 30 to 50 million tons, Centaurus has mapped the outcropping iron formation on the Granted Exploration Lease only (not the entire Project) over a strike length of some 1.5 kilometers on the main target (Serra Pelada) and over 0.5 kilometers on the secondary target (Boa Esperança) with solid mineralization widths of 40 to 55 meters.

Centaurus will focus its initial exploration activities on the Granted Exploration Lease with a view to defining a JORC Resource which can be developed into a project capable of producing iron ore for international export markets. Approvals work, both environmental and mining, will commence immediately.

The expected low capital expenditure to develop the Project, and the ability to access existing infrastructure, means that Centaurus will be able to apply the same principles being proven in the execution of the Company’s domestic projects.

Commenting on the acquisition, Centaurus’ Managing Director, Mr Darren Gordon, said the move to secure Serra do Lontra as an initial project to commence implementation of the company’s export strategy in Brazil is vital.

The high grade hematite produced in Brazil is highly sought after by international markets and the fact that Serra do Lontra is close enough to the coast to truck ore to open access port facilities will allow Centaurus to generate strong export market returns off a relatively low capital base, said Gordon.

17th June 2011