For Centaurus, the arrangement with Simulus completely de-risks the exploration and evaluation stages of the nickel-cobalt project in Brazil.
Australia-based, Brazil-focused explorer Centaurus Metals (ASX:CTM) has announced it’s secured a joint venture partner for its Itapitanga nickel-cobalt project in the Carajás region of Northern Brazil.
In its Tuesday (November 27) release, Centaurus said that it had signed a binding earn-in JV agreement with the Simulus Group, an Australian battery metals-focused company which specializes in hydrometallurgy and minerals processing.
“Under the staged earn-in agreement, Simulus can earn up to an 80-percent interest in the project and will manage it through various study phases utilising its extensive in-house capabilities for process design on nickel-cobalt projects with the ultimate aim of delivering a low capital intensity process design under a definitive feasibility study (DFS) for a 250-750ktpa project,” said Centaurus.
Under the agreement, Simulus will be the project manager and Centaurus will be free-carried “throughout the various exploration, resource evaluation and feasibility phases until project financing is arranged and a decision to mine is made.”
‘Free-carry’ is when a party is not required to pay its way through a project, meaning Centaurus can sit back.
Managing director of Centaurus, Darren Gordon said the agreement “completely de-risks the exploration and evaluation stage of the project” for the company, allowing it to make a decision on investment after all the work assessing an operational mines viability is done.
Centaurus will however, provide in-country support for Simulus as required, as it describes itself as having “deep knowledge of the operating environment in Brazil.”
“This is a great partnership which should ultimately give us the best possible chance of delivering a highly profitable project in the shortest period of time to take advantage of the favorable market outlook for nickel and cobalt,” said Gordon, heaping praise on Simulus.
“Simulus is at the forefront of process development for battery grade nickel and cobalt sulphates worldwide, and this joint venture is a major coup for the company and the project, giving us a clear pathway through to development and production.”
The earn-in agreement has four stages of work for Simulus to complete: a scoping study for 21 percent, the beginnings of a feasibility study including resource drill-out and flowsheet optimization for 49 percent, a definitive feasibility study for 70 percent, and finally Simulus must finalize arms-length financing for 80 percent. After which, a decision to mine will be made.
After Simulus earns 80 percent, both companies will contribute to develop the project, which had its maiden drill program commence in August this year.
Based on that drilling, Centaurus defined an exploration estimate for the project at 280,000-495,000 tonnes of nickel including 24,500-54,000 tonnes of cobalt.
On the ASX, Centaurus was trading at AU$0.008 on Tuesday.
Don’t forget to follow us @INN_Resource for real-time updates!
Securities Disclosure: I, Scott Tibballs, hold no direct investment interest in any company mentioned in this article.