Brazilian Metals Group Limited (BMG) Friday entered into an option agreement to add a highly prospective block of iron ore tenements to its Rio Pardo iron project in Northern Minas Gerais, in Brazil.
The new tenement block is called the Catuti block, and is located in the Mato Verde area; 13 km west of the city, in close proximity to the Company’s other key iron ore projects – Rio Pardo and Gema Verde.
The acquisition of the Catuti block of tenements will add to the BMG’s portfolio of iron ore projects in the region, and provide a further step in the Company’s strategy to identify and acquire project areas in Brazil which are highly prospective for large iron deposits and have the potential for development into a low cost, large scale export mining operation.
The Company has, subject to a 7 month period of evaluation, entered into an agreement to acquire the Catuti block, which comprises a block of 4 iron ore tenements, over an area of 80 square kilometers.
BMG paid US$70,000 for the option to acquire the Catuti block, plus payments of US$20,000 per month during the 7 month evaluation period (to the end of March 2012). Provided BMG is satisfied with results of its evaluation drilling, it will acquire a 100% interest in the Catuti mineral claims, subject to paying the vendors US$430,000 upon signing a definitive agreement, and further staged payments totaling US$11 million over the subsequent 3 years.
There will be no requirement for royalty payments to be made. BMG retains a right to withdraw from the project and any ongoing payment obligations at any time. BMG has continued to progress its evaluation of the Gema Verde project, and a maiden JORC resource is anticipated to be delivered in October 2011.
BMG has an exploration target of 370 to 680 million tonnes at 16.6% to 19.9% Fe for the project, and expects the initial JORC resource to fall within this range.
Brazilian Metals Group Limited (formerly Lefroy Resources Limited) is a Perth based company listed on the Australian Securities Exchange. It is focused on the Rio Pardo Iron Ore project in Brazil.
Minas Norte Mineraçao Ltda (a wholly owned subsidiary) is a Brazilian registered company and holds a number of tenements at granted and application stages in the north of Minas Gerais state in southern Brazil. The Rio Pardo iron ore project covers 899.0 square kilometers in 62 tenements.
11th Sept. 2011