Projects
Agriculture
Brazilian Resources, through its subsidiary BrasAgro, is planning to develop the Itiquira Limestone Project located in one of Brazil's largest agricultural states, Mato Grosso. The Itiquira Project property includes 995 ha of mining rights located at the northwestern edge of the Paraná Sedimentary Basin. Brazilian Resources owns 80% of the Itiquira Project.Brazilian plans to produce and sell agricultural limestone to customers in the nearby region. The expectation is to build mining operations and seek the acquisition of similar properties with the intent of consolidating within the sector and having a long-lived asset generating significant cash flow.
The Company completed a feasibility study on the Project, which was filed on SEDAR in July 2009. The feasibility study, which is NI 43-101 compliant, includes all required surveying, a ROM bulk sample extraction and study, a 2,000 meter ("m") drilling exploration campaign, a hydrogeology study, the required metallurgical test work, a detailed market study, and the preparation of requests for proposals ("RFP") for the engineering, procurement and construction management ("EPCM") phase.
The exploration campaign, process and economic studies identified two sedimentary ore bodies; high and medium grade limestone. The drilling program included 51 drill holes (1,948 m) on a 200 m by 100 m staggered grid. The project area contains limestone measured resources estimated to be 27.0 million tonnes ("Mt"). Significant potential exists to increase resources within the area with additional drilling. In addition to the mining concession, the project has five exploration permits in good standing for areas located around the mining concession area, totaling 4,537.80 ha.
The initial capital cost of developing the project with an annual capacity of 1.0 Mt of saleable agricultural limestone production over a 10-year LOM is estimated at $ 19.6 million.
The production plan includes 700,000t in 2010 and the first full year of operation, 2011, to be ramped up to the design capacity of 1,000,000 tonnes per year ("tpy"). Production costs are expected to gradually decrease over the first five years to levels comparable to similar operations in Brazil, starting at $9.23 per tonne reaching $7.05 per tonne in the fifth year. The key findings of the feasibility study are listed below (click here to view the NI 43-101 technical report):
- Net Present Value of $39.6 million @ 10% per year discount rate
- Internal rate of return of 40.4% per year
- Production average of 1Mt of saleable limestone per year
- Mining operating cost of $2.97 per tonne
- Total production cost of $7.05 per tonne at year 5 (starts at $9.23 per tonne)
- Total delivered cost of $17.55 per tonne at year 5 (starts at $19.73 per tonne)
- Total capital costs of $20.3 million
- The study proposes open pit mining using a hydraulic excavator and front end loaders to load trucks for transport to a nearby crushing, grinding, screening, storage and loadout facility.