Condor Blanco Mines (ASX: CDB) continues to fast-track its Marianas Iron Tailings Project in northern Chile with production set to begin shortly with a mobile processing plant being deployed to the site.
Marianas is favourably located with respect to access to ports, power, water, experienced workforce and engineering support.
This plant is capable of processing up to 150 tonnes of ore per hour with the company aiming to process an initial 5,000 tonnes per month and stockpile for sale to generate short-term cash flow.
Using a wet circuit, a high grade product of up to 65-70% iron can be recovered including magnetite and hematite.
Upon approval of the Marianas mining permits, the company plans to increase production to the maximum of 30,000 tonnes of concentrate per month.
it will be able to generate short-term cash flow through the processing of up to 30,000 tonnes of concentrate per month.
"This is absolutely a huge milestone for the company. Following on from bulk sample, we've fast tracked production of the project by immediately commencing processing on site," managing director Glen Darby said.
"With permitting underway already, this is an excellent way to generate immediate cash flow and will also save substantially on logistics costs due to on site processing, a premium grade of 65-70% will improve probability for the company."
Profits generated from this project will allow the company to pursue exploration of its world class copper gold projects as well as new project acquisition.
"It's very rare for a small scale company to move into production this quickly," Darby added.
"Condor has achieved what many company's aim to achieve in a very small time frame. 2014 is going to be a very exciting year for the company and shareholders alike."
The company is currently finalising a 200 tonne bulk sample.
Marianas Iron Tailings Project
The Marianas Project is a tailings retreatment project, which exploits a combination of positive metallurgical, economic and environmental aspects of an estimated 11 million tonnes of magnetite-bearing historical tailings within the city of Copiapo in northern Chile.
Condor's recently completed Scoping Study had found the project could become a viable producer of low cost, high quality iron ore products when developed.
This evaluated the economic and technical aspects of the project and examined Condor's plans for onsite processing of the tailings into a saleable concentrate.
The concentrate would then be transported to an iron ore export facility at Caldera via the existing freeway. The robust outcome utilised a system that would place the Fe concentrate on ships offshore via self-propelled barges owned and operated by a 3rd party operator.
The Environmental Permitting Process is expected to be relatively straightforward, as the project will support the rehabilitation of this historical tailings dump.
Therefore, no delays are expected in the permitting process. Currently a 19% tax on profit is applied in Chile.
In addition to being amenable to very cheap mining and treatment by magnetic separation to produce a high grade, direct marketing magnetite concentrate, the tailings also contain potentially economic extractable concentrations of gold and molybdenum.
The feasibility of commercially extracting these additional minerals through secondary processing will be the subject of a separate feasibility study once magnetite production is underway
The mobilisation of a mobile processing plant to the Marianas Iron Tailings Project underscores its design as a rapid start up, fast-payback, low-capex, cash-generating project.
Processing on site is a significant cost saving while the grade achieved using a wet circuit of up to 70% iron will improve yield and profits.
Processing 5,000 tonnes of material a month initial will generate short-term cash flow ahead of securing the mining permit to increase production to 30,000 tonnes of concentrate per month.
Cash flow from Marianas will in turn support Condor Blanco Mines' over-riding strategy to develop its larger and highly prospective copper porphyry projects.
With production set to begin soon, the company's market cap of just $1.9 million looks light.
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