Ferrex and Cancana Moving Forward in Manganese Market

Two companies have made progress as they look to breathe some new life into a somewhat stagnant manganese market.

Ferrex (LSE:FRX) announced Thursday that it has been granted an environmental permit for its Nayega project in Northern Togo, while Cancana Resources (TSXV:CNY) revealed earlier in the week that it has identified four additional sites on its Brazil Manganese Corporation (BMC) tenements. BMC is a joint venture between Cancana and Ferrometals.

Ferrex makes the switch

Though Ferrex produces iron in addition to manganese, falling iron ore prices have forced the company to focus on its manganese properties.

“The Company has decided to primarily focus on its manganese assets and developing it towards production in the near term whilst continuing to advance its iron ore assets in South Africa and Gabon using in house skills to keep expenditure to a minimum,” Dave Reeves, managing director of Ferrex, said in a press release earlier this month.

Since then the company has stayed true to its word, not only gaining an environmental permit for Nayega, but also receiving extensions on its prospecting permits after relinquishing 50 percent of the 92,000-hectare property.

“The renewal of the exploration permits also shows the support that the company has in Togo and allows us to continue the ongoing exploration programme that is defining new manganese mineralisation outside the main Nayega deposit,” said Reeves in a statement.

The permits have been renewed for two years, and a further two years subsequently, giving the company the space it needs to develop.

Cancana hopes exploring pays off

Cancana provided a Q3 update on behalf of BMC, noting that during the quarter, BMC’s production hit 1,200 tons, with 250 tons sold as commercial samples.

The company hopes to improve those numbers by increasing its efficiency — this past quarter, the company shut down its Rio Madeira plant for five weeks as it made improvements to the trommel and tailings ponds and addressed water access issues. Meanwhile, acquisition delays forced the Jaburi plant to come online in late September.

Cancana CEO Anthony Julien seems confident the best is yet to come. “The BMC team has done an excellent job in bringing together the 3 assets and improving them to reach Canadian mining standards. Now that both plants are online and we have a mine plan to deliver consistent quality material, BMC is on-track to meeting its production target by December, 31, 2014,” he said in a press release.

On a different note, BMC has identified four additional sites for mining. The company has started permitting and planning as it looks to start mining at those sites; if they appear feasible they will provide a source of feed for Rio Madeira and Jaburi.

Looking forward

Both Ferrex and Cancana have moves to make as they look to thrive in the current market. Ferrex is looking to both secure its mining permit before the end of the quarter and finalize its definitive feasibility study.

For its part, Cancana is waiting on the completion of testing performed by BMC to ensure the material it’s producing meets market requirements. To help that cause, BMC is currently constructing an on-site sample preparation lab to improve analysis times.

Securities Disclosure: I, Nick Wells, hold no direct investment interest in any company mentioned in this article.