REG - Jangada Mines PLC - Technical Report for Pitombeiras VTM Project

Jangada MinesAnnouncement

21/04/2022 07:00

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RNS Number : 8717I  Jangada Mines PLC  21 April 2022

Jangada Mines plc / EPIC: JAN.L / Market: AIM / Sector: Mining

21 April 2022

Jangada Mines plc ('Jangada' or 'the Company')

Technical Report Including Titanium Potential

for Pitombeiras Vanadium Titano-Magnetite Project

 

Jangada Mines plc, a Brazilian focussed natural resource development company,
announces an updated technical report ('Technical Report') with the inclusion
of the titanium component at its 100%-owned Pitombeiras Vanadium
Titano-Magnetite ('VTM') Project ('the Project') in Ceará State, Brazil.
The Technical Report was prepared by Brazilian based GE21 Consultoria Mineral
('GE21') and is compliant with National Instrument 43-101 ('NI 43-101'). The
Technical Report supersedes the Preliminary Economic Assessment ('PEA')
published in 2021.

 

The Technical Report confirms that there are no legal, technical, or
geological impediments to proceeding to mine development, construction, and
production, highlights the Project's robust economics and excellent potential
to become a profitable producer of Ferrovanadium concentrate ('Fe 62%') and
Titanium dioxide ('TiO(2)').

 

The initial objective of the Feasibility Study considered a processing route
centred on Fe 62% and vanadium pentoxide ('V(2)O(5)').  Whilst completing
this study, it became evident that an expansion of the saleable commodity
basket to include TiO(2) would likely be beneficial to the Project's
economics.  Presently, the evaluation of the Fe 62% and V(2)O(5) has been
completed to a Feasibility Study standard, while the inclusion of the TiO(2)
remains at a PEA level.  The Company is now consulting with GE21 on
finalising the Feasibility Study, embracing all the three commodities to
evaluate the opportunities to construct a low CAPEX direct shipping ore
('DSO') mining operation, and expects to release this in the coming months.
The Company does not anticipate that the inclusion of the titanium to
feasibility standard will result in a material deviation from the Technical
Report conclusions and numbers below, and there remains no geological,
economic, or legal impediment to proceeding to production.

 

OVERVIEW

·    Robust economics inclusive of TiO(2):

o  100.3% post-tax Internal Rate of Return ('IRR')

o  US$96.5 million post-tax Net Present Value ('NPV') (8% discount rate)

o  All-inclusive CAPEX totalling US$18.45 million

o  Payback time - 13 months

·    Total Project Mineral Resource Estimation ('MRE') from only 3 of 8
known magnetic targets being Pitombeiras North, South, and Goela remains at:

 

 

 

            Tonnage (Mt)  V(2)O(5)  TiO(2)  Fe(2)O(3)
 Measured   1.75          0.48%     9.47%   47.79%
 Indicated  3.35          0.45%     8.82%   45.16%
 Inferred   3.16          0.44%     9.00%   45.86%

 

·    All chapters of the Technical Report including pit design and
operation, processing route, production matrix and sales route defined to
feasibility level (exception being chapter relating to TiO(2.) which is( )at
PEA level)

·    The need for wet concentration to produce a high-grade saleable
product, translated into a reduced input rate of 0.6ktpa compared to initial
PEA - NPV and IRR remain highly attractive, and the Project is de-risked
substantially with Fe 62% / V(2)O(5) concentrate process route to feasibility
standard

·    Positive pricing and demand forecast for both V(2)O(5) and TiO(2) due
to rapid utilisation in emerging renewable energy and electric vehicle sectors
expected to benefit the Project - iron ore price variation impacting the
Project's forecast economics

·    Brazil represents a stable and progressive mining jurisdiction for
international investment

·    Simplicity of operations and processing route and the increased level
of confidence provided by the depth of the report makes Pitombeiras amenable
to a fast-track approach to production decision

·    With the Technical Report de-risking the Project and outlining a
defined route to production, full offtake discussions can commence

·    The Board is evaluating the next steps to advance the Project and
build value for shareholders

 

OPERATIONAL OVERVIEW

·    Annual production 186,000t of Fe 62% / V(2)O(5) and 66,000t TiO(2) at
production/processing rate of 600,000tpa

·    Life of Mine ('LOM') approximately 9 years based only on the current
estimated minable resource of 5.5Mt - no pre-stripping foreseen

·    Total LOM Mineable Resources: 5.1Mt M&I plus 3.16Mt Inferred

·    LOM average strip ratio: 1.6 t/t Waste/Ore

·    Total tonnages produced forecast of:

o  Fe/ V(2)O(5): 1,740,000t

o  TiO(2): 66 kt

·    Exploration potential to increase LOM remains open

 

FINANCIAL OVERVIEW

·    US$96.5 million NPV @ 8% discount rate

·    100.3% post-tax IRR

·    US$415.2 million total gross revenue

·    US$145.9 million post-tax, undiscounted operating cash flow

·    Post-tax payback period of 13 months

·    US$18.45 million CAPEX (US$2.25 million for TiO(2))

·    US$1.26 per tonne mined average operating cost

·    US$19.39 per tonne of Fe V(2)O(5) concentrate processed average
operating cost

·    US$ 12.48 per tonne of TiO(2) processed average operating cost

 

Brian McMaster, Executive Chairman of Jangada, said: "We are witnessing an
increase in focus on commodities that broadly fit the emerging energy and
battery space.  Given this, we have gone back and optimised the development
route at Pitombeiras to include the 9.85% TiO(2) component alongside the Fe
62% and V(2)O(5) to obtain a clearer picture of the Project's potential. The
resultant technical and economic fundamentals, including a NPV of US$96.5
million, an IRR of 100.3%, and an estimated 13-month payback, represents a
positive development for Jangada as it identifies the Company as an emerging
producer of highly coveted new energy metals.

 

"We have continued to de-risk the Project with the vast majority of this
Technical Report conducted to a Feasibility Study standard, and we are now
working to bring the TiO(2) element, currently at a PEA level, up to the same
standards prepared to the FerroVanadium process. Importantly, GE21 has
confirmed the optimal processing route and there is no impediment to
continuing to production using only ore from the three exploration target
areas, Pitombeiras North and South, and Goela, with a further five targets
available to continue mine life expansion.

 

"The variability in the iron ore price affects our economics both positively
and negatively, given the importance of Fe to our commodity basket.  A
positive environment is great, as we are seeing at the moment, however, in a
declining pricing environment, the Fe pricing is offset somewhat by the value
of the increasing global demand for vanadium pentoxide and titanium dioxide,
our relatively low CAPEX and strong project economics.  Notably, with the
completion of the Technical Report we can commence offtake discussions
in-county, which would reduce the OPEX/transport cost, as well as
internationally.

 

"Finally, given our extensive in-country contacts and positioning, we are
continuously seeing additional projects and regularly review opportunities,
particularly in the technology metal space, that may complement our existing
asset suite and create further value for shareholders.

 

"We look forward to updating the market further as we complete the on-going
Feasibility Study including the titanium."

 

Further Information:

 

GE21 Consultoria Mineral Ltda. ("GE21") was engaged by Jangada Mines Plc
("Jangada" or the "issuer") to prepare an Independent Technical Report ("ITR")
for the Pitombeiras Project, based on premises of mineral processing, and
first principles for mining activities. The purpose of this report ("Report"
or "Technical Report") is to provide background and supporting information on
the Mineral Reserves, and its economic potentiality. This Report and estimates
herein comply with the requirements of the Canadian Securities Administrators'
National Instrument 43-101 - Standard of Disclosure for Mineral Projects ("NI
43-101") and Form 43-101F1 - Technical Report ("Form 43-101F1").

 

Geology and Mineralization

The geology of the Pitombeiras Project is characterized by the presence of
mafic and ultramafic rocks (metabasalts, metagabros, serpentinites and talc
schists) with local intercalations of metathrondjemites as part of the Troia
Unit, and also by medium to coarse-grained granite-orthogneisses, with a
calc-alkaline affinity with pegmatite injections and metaultramafic lenses
belonging to Pedra Branca Unit.

 

The vanadium mineralization at the Pitombeiras Project is closely associated
with magnetite and occur in magmatic accumulations of magnetite and ilmenite
bodies hosted within the Archean-age mafic-ultramafic rocks of the Troia unit
that shows several similarities to other magmatic vanadium titanomagnetite
("VTM") or ilmenite deposits associated with layered mafic intrusive
complexes, such as the Bushveld Complex (South Africa), the Skaergard
Intrusion (Greenland), Maracas Menchen (Brazil), Panzhihua layered intrusion
(China), Kachkanar massif (Russia) and in the Windimurra Complex (Australia).

 

VTM deposits are found throughout the word and are considered the principal
sources of vanadium. The main economic aspects for VTM deposits include: (i)
the ore grade, (ii) the concentrate grade and (iii) the mass recovery.

 

Mineral Resource Estimate

The Mineral Resource Estimate ("MRE") for the Pitombeiras Project has been
prepared in accordance with the Canadian Institute of Mining, Metallurgy and
Petroleum ('CIM') Standards on Mineral Resources and Reserves: Definitions and
Guidelines, May 10, 2014 (CIM, 2014), by Mauricio Prado, MSc. Geologist and
Qualified Person, as defined by NI 43-101 guidelines, with effective date of
July 20th, 2021.

 

This MRE includes three exploration target areas, Pitombeiras North &
South, and Goela. The exploration results originated from the drilling program
identified occurrences of VTM mineralization on both targets.

 

There are no known issues related to environmental, permitting, legal, title,
taxation, socio‐economic, marketing, or political matters, which could
materially affect the Mineral Resource Estimate.

 

The database provided follows the best practice for mineral exploration within
the mineral industry. The topographic survey covers all the areas of
geological model and resource estimation.

 

The geological model has been designed applying the geological information
from core logs. Individual Domains have been created for both targets based on
VTM occurrences. As for the Pitombeiras North target, the VTM Domains were
subdivided on HG and LG Domains based on the predominance of massive VTM
mineralization and VTM interbedded with magnetic mafic rocks (amphibolites).

 

The grade estimates of V2O5, TiO2 and Fe2O3 were obtained from the results of
variographic analysis of data, by Ordinary Kriging.

 

The mineral resources are classified under the categories of Measured,
Indicated and Inferred according to the CIM Guidelines, which reflects the
relative confidence of the grade estimates and the continuity of the
mineralization for this type of deposit.

 

A reasonable prospect for an eventual economic extraction of the Mineral
Resources has been established through the calculation of a conceptual open
pit shell, following the input parameters: 1) Selling price for iron
concentrate (62%/65% Fe, + V2O5 credit) of US$105.75/t; 2) mining cost of
US$2.78/t mined; 3) processing cost of US$6.00/t processed; 4) general and
administrative (G&A) costs of US$1.14/t; 5) global mass recovery of 80%;
6) mining dilution of 5%, and; 7) mining recovery of 95%.

 

The classification of the Mineral Resource Estimation resulted in a total of
measured resources of 1.75Mt at 0.48% V2O5, 9.47 % TiO2 and 47.79% of Fe2O3.,
an Indicated Resources of 3.35Mt at 0.45% V2O5, 8.82 % TiO2, and 45.16% of
Fe2O3, and an Inferred resource of 3.16Mt at 0.44% V2O5, 9.00% TiO2 and 45.86%
of Fe2O3 (Table. 1 1).

 

Table. 1 1 - Mineral Resource Statement of the Pitombeiras Project - Effective
date: July 20th, 2021

 

 Resource Classification  Mass (Mt)  Average Grade %
                          V(2)O(5)           TiO(2)  Fe(2)O(3)
 Measured                 1.75       0.48    9.47    47.79
 Indicated                3.35       0.45    8.82    45.16
 Measured + Indicated     5.10       0.46    9.04    46.06
 Inferred                 3.16       0.44    9.00    45.86

 

Notes: The Mineral Resource is limited to within the tenement boundaries.
Mineral Resources that are not Mineral Reserves do not have demonstrated
economic viability. There has been insufficient exploration to define the
Inferred Resources tabulated above as an Indicated or Measured Mineral
Resource. There is no guarantee that any part of the mineral resources
discussed herein will be converted into a mineral reserve in the future. The
mineral resource estimate follows current CIM definitions and guidelines for
mineral resources. Mineral Resources are reported using a cut-off calculated
assuming only the blocks within a conceptual open pit shell optimizes by NPV
Scheduler that uses the following assumptions: iron ore concentration
(62%/65%Fe, +V2O5) price of 105.75 US$/t, 80% of global mass recovery of Fe to
the concentrate, US$2.78/t of mining cost (ROM), processing costs of
US$6.00/t, mine dilution of 5%, mine recovery 95%, and final slope angle of
56°to the open pit. Mineral Resources have been reported on a dry tonnage
basis. Discrepancies may occur due to rounding. Mineral Resources are reported
with an effective date of July 20th, 2021. The Qualified Person for the
estimate, as defined by NI43-101, was Mauricio Prado, MSc. Geo. MAIG.

 

Mineral Reserves Estimation

The existing resources and the amount of current data do not allow for the
conversion of the Mineral Resources into Mineral Reserves. As such, GE21,
making use of its own methodology, has put forth herein an economic
evaluation, in the form of a Preliminary Economic Assessment, in accordance
with what is established by the CIM.

 

A "Preliminary Economic Assessment" means a study, other than a
pre-feasibility or feasibility study, which includes economic analysis of the
potential viability of Mineral Resources. A PEA level study is of insufficient
accuracy to establish Mineral Reserves.

 

Mining Methods

An ultimate pit and mine plan were developed to optimize plant feed for 0.6
Mtpa of production.  The Pitombeiras Project will be an open pit operation
utilizing a contract mining fleet of hydraulic excavators, front-end loaders,
30t haul trucks, rotary drill rigs and ancillary equipment.

 

The waste dump will be in an area close to the pit. The site shall be
adequately prepared to include drainage at its base and channels to direct the
flow of water with the aim of aiding geotechnical stability and mitigating the
erosion of the stockpiled material.

 

Table. 1 2 - Pit Design Results

 

 Block dimensions: 25 x 25 x 6 m
 Mine Recovery 95%, Dilution 5%

 Material    Tonnes  Fe2O3  V2O5  TiO2
             (Mt)    (%)    (%)   (%)
 Measured    1.35    49.34  0.50  9.80
 Indicated   2.66    47.37  0.48  9.38
 Inferred    1.49    48.05  0.49  9.62
 SubTotal    5.50    48.04  0.49  9.55
 Waste       8.81
 Total Mov.  14.31
 SR (t/t)    1.60

 

Mineable Resources were estimated using the Geovia Whittle 4.3 software and
following the economic parameters: Sale price for iron ore concentration
(62%/65%Fe, +V2O5): US$/t conc.= 105.75. Exchange rate US$ 1.00 = R$ 5.25.
Mining costs: US$2.78/t mined, processing costs: US$20.00 /t milled and G$A:
US$1.14/t conc. ROM are the economic portion of the Measured, Indicated and
Inferred mineral resources. Dilution 5% and Recovery 95%. Final slope angle:
56º. Waste = 8.81Mt. Strip Ratio = 1.60 t/t - (Waste)/Ore (measured+
indicated +inferred). The Qualified Person Responsible by the PEA is Porfirio
Cabaleiro Rodrigues, BSc. (MEng), FAIG, an employee of GE21.

 

Mine Schedule

The mine production scheduling was generated in Geovia Whittle 4.7 software,
where the following assumptions were used:

·    Production rate: 0.6 Mtpa; and

·    ~186kt of product (Fe 62%) per year.

 

This study consisted of establishing annual production schedules for the
Run-of-mine (ROM) and waste mining sequence, as well as the evolution of the
geometries throughout the life of the mine (LoM).

 

For the development of the production program, the areas to be mined annually
were established, thus generating operational plans for years 1 to 9. No
pre-stripping is foreseen.

 

Table. 1 3 - Mining Schedule Production

 Period    ROM   Fe2O3  V2O5  TiO2   Waste  Product (62% Fe2O3)  Strip Ratio  Total Mined
           Mt    %                   Mt     kt                   t/t          kt
 1         0.60  49.64  0.51  9.68   1.09   186                  1.82         1.69
 2         0.64  49.73  0.49  9.73   1.06   197                  1.66         1.69
 3         0.58  53.03  0.55  10.50  1.08   179                  1.86         1.66
 4         0.67  45.90  0.47  9.17   1.09   209                  1.62         1.77
 5         0.69  45.15  0.46  9.17   1.20   213                  1.75         1.88
 6         0.63  50.04  0.51  9.93   1.33   196                  2.10         1.96
 7 até 9   1.69  46.39  0.47  9.27   1.96   524                  1.16         3.65
  Total    5.50  48.04  0.49  9.55   8.81   1 704                1.60         14.31

 

*Designed Pits

**Grade diluted by 5%.

 

Mine Fleet Sizing

The mining services will be outsourced and are based on a small-scale
equipment projection to meet the selectivity requirements of the proposed
mining. A CAT 340 hydraulic excavator equipped with a 2.4 m³ bucket was
selected, as well as Scania P420 30-ton trucks, equipped with a hard rock type
bucket. DX800 rotary type drills, with a 4" diameter drill bit, were selected
for the perforation of the rock. A CAT 930 front-end loader equipped with a
2.1 m³ bucket was selected for loading tailings at the plant area.

 

GE21 has estimated the required yearly mine fleet to achieve the mine schedule
and the results are shown at Table. 1 4 below.

 

Table. 1 4 - Mine Equipment

 Equipment            Capacity  Quantity
 Hydraulic Excavator  2.4 m³    2
 Haul Truck           30 t      4
 Front-End Loader     2.1 m³    1
 Drilling Rigs        4"        2

 

Recovery Methods

The mine pre-concentrate (cobbing) will be fed into a ball mill (Mo) in a
closed circuit with a hydrocyclone battery (C1). The overflow (C1) will feed
the wet roller magnetic concentrator (M1), rougher stage, with an intensity of
1,500 Gauss.

 

Magnetic concentrate from (M1) will go to (M2), wet roller magnetic
concentrator in cleaner stage also with an intensity of 1,500 Gauss. The
magnetic concentrate (M2) will represent the final product and will be sent
for dewatering in thickener and the underflow in a disposal pile or pond. The
overflow of the thickener is the recovered water.

 

Both (non-magnetic) tailings from M1 and M2 will be thickened by the
hydrocyclone battery (C2), whose underflow will feed the wet roller magnetic
concentrator, in rougher stage (M3), with an intensity of 7,500 Gauss. The
magnetic concentrate (M3) will go to (M4), cleaner stage with the same
intensity of 7,500 Gauss. The M4 concentrate will be a final medium intensity
magnetic concentrate, which will also be drained into a thickener and the
underflow in a disposal pile or pond. The overflow of the thickener is the
recovered water.

 

Tailings (non-magnetic) from M3 and M4 will be pumped to a battery of
hydrocyclones (C3). The underflow (C3) will feed a tailings pond, and the
overflow will be thickened by EP1, a vertical thickener, for water recovery.
The underflow from the EP1 to a tailings pond.

 

The plant was sized to be fed by 600 kt of ROM/year at the cobbing stage. This
means that the wet plant will receive 450 kt/year of pre-concentrate. The
annual production of concentrate will be 180 kt/year, dry basis, meaning 200
kt/year to be transported to the port, considering 10% moisture.

 

The ball mill sizing was performed following Work Index determination of all 3
samples sent to Fundacão Gorceix. Bond Method was the base for these
calculations. This 3.5 diameter x 5.0 m long mill will have 850 kW of
installed power, representing the most expensive equipment of this project.

Mineralogical characterization studies show that titanium is associated with
the mineral ilmenite. Based on available literature and results from other
similar projects, the use of carboxylic acid-as based collector flotation (eg
Flotinor 10068) and non-ionic polymer co-collector (eg DP-OMC-1178), and
fluosilicic acid (H2SiF6) to regulate the pH to about 4, is capable of
selectively recover the ilmenite present in the non-magnetic waste from wet
magnetic separation.

 

The power demand was estimated in 600 kVA for the Dry circuit, at the mine
site supplied by diesel generators. The wet plant power demand is estimated in
1,600 kW.  Water requirement for the wet plant is 31m3/h + losses. 50 m3/h
supply is advisable.  Grinding media consumption was estimated in 50 g/kWh, a
typical figure that has still to be confirmed in the actual operation.

 

The chemicals considered are only the flocculants, however some caustic soda
may be necessary to reduce grinding media consumption. Since there will be no
liquid effluents, there is no need of neutralization.

 

Titanium Recovery

Titanium concentrate recovery estimates were based on the results of
mineralogical studies and pilot and laboratory tests to obtaining vanadium and
iron concentrates.

 

Mass Balance - Magnetic Separation and Flotation

Considering the contents (Fe, TiO2 and V2O) of the ore, the mass balance of
the low and medium intensity magnetic separation was simulated based on the
results of the pilot tests carried out at Fundação Gorceix, as shown in
Table. 1 5 below.

 

Table. 1 5 - Mass Balance - Magnetic Separation - Simulation

 Operational Pit - Magnetic Separation Mass Balance - Simulation
 FLUX                                     Mass Recovery (%)  Metallic Recovery (%)         Grade (%)
                                          Fe                           TiO2       V2O5     Fe     TiO2   V2O5
                                                                       Calculated
 FEED - ROM                               100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Mill Feed                                100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Mill Product - Overflow Hydrocyclone     100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Tailngs 1,500 Gauss                      47.4               36.2      86.3      29.5      27.24  18.48  0.32
 CONCENTRATE 1,500 Gauss                  52.6               63.8      13.7      70.5      43.22  2.64   0.70
 CONCENTRATE 7,500 Gauss (Phase)          31.5               43.6      13.1      61.2      37.68  7.69   0.63
 Tailings 7,500 Gauss (Phase)             68.5               56.4      86.9      38.8      22.44  23.44  0.18
 CONCENTRATE 7,500 Gauss                  14.9               15.8      11.3      18.0      37.68  7.69   0.63
 Tailings 7,500 Gauss                     32.4               20.4      75.0      11.4      22.44  23.44  0.18
 Final Product (Mag 1,500G + Mag 7,500G)  67.6               79.6      25.0      88.6      42.00  3.76   0.68
 Final Tailings                           32.4               20.4      75.0      11.4      22.44  23.44  0.18

 

Fe, TiO2 and V2O5 contents of the samples used in the pilot-scale tests at
Fundação Gorceix presented higher contents in relation to the contents of
the ore: Oxide (Fe= 52.60%; TiO2 = 15.50%; V2O5 = 0.84%); Transition (Fe =
45.10%; TiO2 = 13.40%; V2O5 = 0.69%); Fresh (Fe = 48.90%; TiO2 = 13.20%; V2O5
= 0.76%). So, in addition to the simulation, it was necessary to make an
adjustment in the mass balance of the low and medium intensity magnetic
separation, as shown in Table. 1 6 below.

 

Table. 1 6 - Mass Balance - Magnetic Separation - Simulation and Adjustment

 Operational Pit - Magnetic Separation Mass Balance - Simulation and Adjustment
 FLUX                                     Mass Recovery (%)  Metallic Recovery (%)         Grade (%)
                                          Fe                           TiO2       V2O5     Fe     TiO2   V2O5
                                                                       Calculated
 FEED - ROM                               100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Mill Feed                                100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Mill Product - Overflow Hydrocyclone     100.0              100.0     100.0     100.0     35.65  10.14  0.52
 Tailngs 1,500 Gauss                      63.9               36.2      86.3      29.5      20.20  13.71  0.24
 CONCENTRATE 1,500 Gauss                  36.1               63.8      13.7      70.5      62.95  3.85   1.02
 CONCENTRATE 7,500 Gauss (Phase)          15.0               43.6      13.1      61.2      58.66  11.98  0.98
 Tailings 7,500 Gauss (Phase)             85.0               56.4      86.9      38.8      13.41  14.01  0.11
 CONCENTRATE 7,500 Gauss (Global)         9.6                15.8      11.3      18.0      58.66  11.98  0.98
 Tailings 7,500 Gauss (Global)            54.3               20.4      75.0      11.4      13.41  14.01  0.11
 Final Product (Mag 1,500G + Mag 7,500G)  45.7               79.6      25.0      88.6      62.00  5.65   1.01
 Final Tailings                           54.3               20.4      75.0      11.4      13.41  14.01  0.11

 

The tailings, non-magnetic from low and medium intensity magnetic separation,
with an average content of 14.01% TiO2, will be treated in a battery of
hydrocyclones to remove the ultra-fines, and the deslimed product (underflow)
will be fed into a traditional flotation circuit in Rougher, Scavenger and
Cleaner stages, as shown in Figure 1 5 below. The overflow of this cyclone
battery, final tailings, will be dewatered, filtered and disposed of in piles
together with the flotation tailings, also final tailings.

 

Mineralogical characterization studies show that titanium is associated with
the mineral ilmenite. Based on available literature and results from other
similar projects, the use of carboxylic acid-as based collector flotation (eg
Flotinor 10068) and non-ionic polymer co-collector (eg DP-OMC-1178), and
fluosilicic acid (H2SiF6) to regulate the pH to about 4, is capable of
selectively recover the ilmenite present in the non-magnetic waste from wet
magnetic separation. Table 1.7 presents the Mass Balance - Magnetic Separation
- Simulation.

 

Table 1.7: Mass Balance - Magnetic Separation - Simulation

 

 CRUSHING, MILLING AND MAGNETIC SEPARATION - SUMMARY
 Plant Feed (t/year)                                                 450,000.00
 Plant Feeed (% TiO2)                                                10.14
 Plant Feeed (% Fe)                                                  35.65
 Plant Feeed (% V2O5)                                                0.52
 Hours/year (Crushing - Dry Treatment)                               4,860.00
 Crushing Feed - (Dry Treatment) (t/h)                               92.59
 Hours/year (Wet Treatment)                                          6,336.00
 Plant Feed - (Wet Treatment) (t/h)                                  71.02
 Final Product - Fe-Vanadium - (Mag 1,500G + Mag 7,500G) - (t/year)  205,754.63
 Final Product - Fe-Vanadium - (Mag 1,500G + Mag 7,500G) - (% Fe)    62.00
 Final Product - Fe-Vanadium - (Mag 1,500G + Mag 7,500G) - (% V2O5)  1.01
 Final Product - Fe-Vanadium - (Mag 1,500G + Mag 7,500G) - (% TiO2)  5.65
 Final Tailings - Magnetic Separation (t/year)                       244,245.38
 Final Tailings (t/h)                                                38.55
 DESLIMING
 Desliming Feed - Cycloning - (t/year)                               244,245.38
 Desliming Feed - Cycloning - (t/h)                                  38.55
 Desliming Product - Underflow Cicloning (t/year)                    232,033.11
 Desliming Product - Underflow Cicloning (t/h)                       36.62
 Deliming Tailings - Overflow Cicloning (t/year)                     12,212.27
 Deliming Tailings - Overflow Cicloning (t/h)                        1.93
 FLOTATION
 Flotation Feed (t/year)                                             232,033.11
 Flotation Feed (t/h)                                                36.62
 Desliming Feed (% TiO2)                                             14.01
 Deliming Tailings - Overflow Cicloning (% TiO2)                     14.01
 Desliming Product - Underflow Cicloning (% TiO2)                    14.01
 TiO2 Recovery in Flotation (%)                                      85.00
 Flotation Product (% TiO2)                                          42.00
 Flotation Product - Final Product - Titanium Concentrate (t/year)   65,788.70
 Flotation Product Final Product - Titanium Concentrate (t/h)        10.38
 Final Tailing (Flotation) - (t/year)                                178,456.68
 Final Tailing (Flotation) - (t/h)                                   28.17
 TiO2 Recovery - Global (%)                                          60.53

 

Project Infrastructure

The project site infrastructure will have a waste dump, a dry tailings dump,
and a dry beneficiation plant for the processing of ROM resulting in an
iron-titanium pre-concentrate. This material will be transported through
federal road for 350 km to a second processing plant, located near the port,
where a titanium concentrate will be produced.

 

Power Supply

The power line in the area is adequate to supply the office, laboratory,
restaurant, facilities and plant. The company responsible for supplying
electric power in the Project region is Companhia Energética do Ceara - ENEL
(previous COLECE). A 69 kV power line connects the Senador Pompeu substation
located in the municipality of Pedra Branca to the Tauá municipality. The
mine will use generators and electrical energy for power supply. It is
estimated that the annual energy consumption of the plant will be
approximately 10 147MW.

 

Buildings

The construction project considered the use of semi-permanent buildings for
the administrative facilities. The proposed system, which will be used in the
construction and operation phases, uses container structures, which is
characterized by being strictly rational, because the material has industrial
characteristics and standardized sizes, and can thus be thought of as a
modular architecture. Such structures can be mounted directly on level ground,
requiring relatively little preparation (just leveling and eventually slab
construction). This type of structure can provide adequate facilities with a
faster deployment schedule, lower environmental impact and lower cost.

 

Explosives Magazine

The explosives will be delivered in the mining area just in time of blasting.
The storage and transportation of this material will be the responsibility of
the contracted company.

 

Communications

An internet tower will be installed to cover the throughout the offices and
plant area. The mine and mill operations will use portable radios.
Communication towers will be installed to cover the entire site.

 

Access and Roads

The pre concentrated will be transported by trucks on unpaved road for about 5
km until the federal road BR-020.

 

Site roads are designed to connect facilities in the mine and process area.
The following roads are accomplished:

·    Mine Haulage access road:  No pavement internal roads will connect
mine to waste dump and a process plant and process plant to a tailing dump
will be built with a 12 m width and maximum 10% of inclination.

·    Deforestation as well as earthworks necessary for building roads or
for improvements on existing roads are accomplished in engineering project.

 

Waste and Tailing Management

The ROM with grades below the minimum acceptable by the Processing Plant, even
though mineralized, will be excavated, loaded, transported and disposed in the
waste dump, following the respective project of each dump. All fleets for
mining activities have been selected and sized for both mining and waste
removal.  Waste rock will be loaded, transported and disposed in the
corresponding waste dump. All the layout must to be in conformity with the
waste stockpiles project and in accordance with the projected disposal
sequencing to the waste rock.

 

Market Studies

Price Forecast

Price forecast is based on a Platts62 CFR China price of US$ 165.64/dmt
(September 1st, 2021), with a 25% V2O5 premium of US$ 45.64/dmt. Internal
freight costs were estimated to be US$ 10.00/dmt and sea freight costs of US$
20/dmt. GE21 used a flat long-term price starting in 2021 with a price of
US$165,64 CFR China in the economic analysis (Base price of V2O5 - US$
9.2/lb).

 

Table 1 8 - Composition of Concentrate Prices (FOB Mine Site)

 FOB Pitombeiras Estimate
 Year                                              1       2       3       4       5       6       7       8       9
 Description                                       Cost (US$/t conc)
 Forecasted 62% Fe CFR China+25% V(2)O(5) premium  165.64  165.64  165.64  165.64  165.64  165.64  165.64  165.6   165.6
 V(2)O(5) premium                                  45.64   45.64   45.64   45.64   45.64   45.64   45.64   45.64   45.64
 Forecasted 62% Fe CFR China                       120     120     120     120     120     120     120     120     120
 Road freight to port                              10      10      10      10      10      10      10      10      10
 Capesize freight to China                         20      20      20      20      20      20      20      20      20
 Port Services                                     13.99   13.99   13.99   13.99   13.99   13.99   13.99   13.99   13.99
 62% Fe FOB Mine site +25% V(2)O(5) premiun        121.65  121.65  121.65  121.65  121.65  121.65  121.65  121.65  121.65

 

Environmental Studies

CONAMA sets the conditions, limits and the control and use procedures for
natural resources and permits implementation and operation of projects.
Licenses are issued by either a federal, state or a municipal agency.

 

The National Environmental Council through resolution CONAMA 237/97 has
established a three-stage licensing process for mining projects in Brazil:

·    Issuance of a Preliminary License (LP) at the planning stage of
development. Obtainment of an LP requires approval by the relevant
Environmental Authority of the project Environment Impact Assessment and
Report (EIA-RIMA) and plan for the recovery of degraded areas (PRAD)

·    Issuance of an Installation License (LI), which authorizes
construction according to specifications contained in the approved
Environmental Impact Assessment (EIA) or Environmental Assessment (EA), as
well as the Environmental Control Plan (PCA)

·    Issuance of the Operation License (LO). The LO is required to mine,
process and selling of mineral substances, and is granted once the
Environmental Authority has inspected the site and verified that construction
was completed in keeping with all the requirements of the LI, and that the
environmental control measures and other conditions of the LI have been
satisfactorily implemented.

 

In Ceará State the environmental licensing or permitting is responsibility of
SEMA - Secretaria do Meio Ambiente, which is the institution that regulates,
approves, and issues environmental licenses (LP, LI and LO).

 

Capital and Operating Costs

The Preliminary Economic Assessment completed by GE21 on behalf of Jangada
Mines during the first quarter of 2022, produced a Class 4 Capital Cost
estimate as defined by AACE estimate classification system.

 

Class 4 estimate is usually carried out using indicated or measured resources
defined by drilling confirmation of the mineralized zone(s). A preliminary
geological model and detailed mine plan are required, including supporting pit
optimization, geotechnical and hydro-geological studies, etc. The
metallurgical test work should determine the probable process flow sheet and
approximate material balance and identify the major equipment. Engineering
would comprise at a minimum: general arrangement (GA) drawings, equipment
lists for major equipment, nominal plant capacity, block schematics, and
process flow diagrams (PFDs) for the main process systems.

 

The costs for the project include the capital expenditures (CAPEX) and the
operational expenditures (OPEX). All costs are expressed in US Dollars at an
exchange rate of US$ 1.00 = R$ 5.25.

 

Total CAPEX

The Capital Expenditure (CAPEX) estimated for the project was based on the
following items:

·    Beneficiation Plant

·    Mine Infrastructure

·    Other Infrastructure

·    Working Capital

 

Table. 1 9 - Total Capex

 

                                                     US$ M
     BENEFICIATION PLANT
     Beneficiation Plant (Fe/ V(2)O(5))     10.01
     Beneficiation Plant (TiO(2))           2.25
     Total                                  12.26
     MINE INFRASTRUCTURE
     Clearing, Grubbing and Access Roads    0.19
     Underdrain - Waste and Tailings Dumps  0.33
     Others                                 0.12
     Sub-Total (Mine Infrastructure)        0.64
     OTHER INFRASTRUCTURE
     Explosives Storage Facility            0.08
     Offices and Secutiry                   0.40
     Comunication System                    0.11
     Warehouse, Truck Shop                  1.20
     Make-up Water System                   0.38
     Others                                 0.43
     Sub-Total (Other Infrastructure)       2.60
     WORKING CAPITAL
     Working Capital                        1.61
      Contingency (10%)                      1.33
     TOTAL CAPEX                            18.45

 

Mine and Plant OPEX

The Project Operational Expenditures (OPEX) includes costs for mine and plant
operations. The Mine OPEX was based on actual mining projects in Brazil with
similar operation where the roads, climate, infrastructure and topography,
haulage distances, load/haul costs, production scale and other features are
similar to those envisaged for the Pitombeiras Project. The level of
confidence is consistent with the current phase of the study.

 

Jangada provided the OPEX estimative of the processing plant. The estimation
was based on a 600 ktpa processed ore. After evaluating the information
provided by Jangada, GE21 considered the values acceptable to be presented in
the report.

 

The average operating mining costs were estimated for outsourced mine
operations.

 

Table. 1 10 - Mine and Plant Opex

 MINE OPEX (US$/t moved)
 Contract Mining                   0.90    US$/t mi
 Contract Drilling & Blasting      0.36
 TOTAL                             1.26
 PLANT
 Iron Ore Plant OPEX (US$/t product)
 Labour                            4.65    US$/t conc
 Ore Handling                      1.50
 Consumables                       0.10
 Maintenance                       4.90
 Power                             7.24
 Contracts                         1.00
 TOTAL                             19.39
 TiO(2) Plant OPEX (US$/t product)
 Labour                            1.25   US$/t Flotation Product
 Reagents                          3.53
 Maintenance                       3.79
 Power                             2.39
 Other                             1.52
 TOTAL                             12.48

 

Economic Analysis

An after-tax cash flow scenario was developed to evaluate the project based on
economic-financial parameters, on the results of the mine scheduling and on
the OPEX estimate that was presented above. Table. 1 11 presents the results
of the Discounted Cash Flow for the Pitombeiras Project.

 

Table. 1 11 - Cash Flow Results

 CAPEX (US$ M)          18.45
 NPV @ 8% (US$ M)       96.5
 IRR (%)                100.3%
 Payback time (months)  13

 

Qualified/Competent Person Review

The resource information in this announcement has been reviewed by Mr. Paulo
Ilidio de Brito, who is a member of the Australian Institute of Geoscientists
(MAIG #5173) and a member of AusIMM - The Australasian Institute of Mining and
Metallurgy (MAusIMM #223453). Mr. Brito is a senior professional geologist
with +35 years of experience in the mining industry, which is relevant to the
style of mineralisation and type of deposit under consideration and to the
activity which he has undertaken to qualify as a Competent Person as defined
in the 2012 edition of the JORC Code. Mr. Brito also meets the requirements of
a competent person under the AIM Note for Mining, Oil and Gas Companies. Mr.
Brito has no economic, financial or pecuniary interest in the Company, and he
consents to the inclusion in this document of the matters based on his
technical information in the form and context in which it appears.

The 31 June 2021 updated Mineral Resource Estimate ("MRE") for the
Pitombeiras Project has been prepared by Mr. Mauricio Prado, MSc. Geo., MAIG,
Qualified Person as defined by NI 43-101 guidelines, independent geological
consultant contracted by Jangada Mines Plc. Mr. Prado is an independent
consultant based on Goiânia, Brazil.

The report, entitled "Technical Report - Pitombeiras Project, Ceará State,
Brazil", having an effective date of January 31th of 2022, was prepared on
behalf of Jangada Mines Plc by GE21 Ltda and authored by Porfírio Cabaleiro
Rodriguez - BSc (Min Eng), FAIG, Leonardo de Moraes Soares - BSc (Geology),
MAIG and Maurício Prado - MSc (Geology), MAIG.

 

**ENDS**

 

For further information please visit www.jangadamines.com
(http://www.jangadamines.com) or contact:

 

 Jangada Mines plc                     Brian McMaster (Chairman)  Tel: +44 (0) 20 7317 6629

 Strand Hanson Limited                 Ritchie Balmer             Tel: +44 (0)20 7409 3494

 (Nominated & Financial Adviser)       James Spinney

 Tavira Securities Limited             Jonathan Evans             Tel: +44 (0)20 7100 5100

 (Broker)

 St Brides Partners Ltd                Ana Ribeiro                jangada@stbridespartners.co.uk

 (Financial PR)                        Oonagh Reidy

 

 

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