Condor Blanco Mines' (ASX: CDB) has secured the confidence to proceed with development of the Marianas Magnetite Tailings Project in Chile after the commercial scale trial returned mined head grade of 17.88% iron and 11.68% contained magnetite.
This surpasses the Scoping Study results which had a mined head grade of 12.61% and 7.29% contained magnetite.
Confirmatory analysis was particularly impressive with Davis Tube Test contained iron in the 21.9 tonnes of concentrate produced substantially increased at 69.6%.
This compares with the Scoping Study result of 65.22% and enhances the modelled economics of the project.
"The commercial trial provides the confidence to proceed with the development of Marianas," managing director Glen Darby said.
"The results surpassed even our expectations, and are perfectly timed with finance due to be delivered this week."
CDB is expected to tuck away debt funding of €10 million from Europe.
It is also continuing discussions to finalise arrangements to progress Marianas to full production. In addition to the imminent closing of financing and operating agreement, permitting is also underway and Condor expects to update the market on it in due course.
The recently completed commercial trial of material from the Marianas Magnetite Tailings Project, which contains the fine portion of final residues from the Hochschild Mining Plc copper processing plant that used to operate in Copiapo, involved the commercial scale treatment of 174.4 tonnes of tailings.
The trial was undertaken under the Heads of Agreement signed previously with Lacerta Finance and Mining, which has demonstrated expertise in recovering a high quality saleable iron concentrate from projects similar to Marianas and operates the Mol magnetic separation plant located 90 kilometres north of La Serena, Chile.
This returned mined head grade of 17.88% iron and 11.68% contained magnetite were significantly higher than the earlier 40 tonne bulk samples, which had mined head grades of 12.61% iron and 7.29% contained iron.
The 21.9 tonnes of concentrate produced had Davis Tube Test (NYSE:DTT) contained iron of 69.63%, higher than the 65.22% contained iron from the 40 tonne bulk samples.
Analysis of contaminants showed only low levels of all deleterious minerals, and no additional processing will be needed to remove minor elements contained in the tailings
Neither Condor nor its off-taker the Hong Kong-based investment and trading group Jiangxi Resources Limited consider the 1.17% sulphur level to be problematic in placing material in Asian markets.
Appropriate matching to buyers is already being considered.
Overall, the grade of the concentrate or final product was 51.48% total iron. An additional round of processing over a magnetic drum will increase the grade towards the DTT level and enable a product of over 60% iron to be obtained.
Consequently a linear process including two finishing drums will be specified in the final plant design arrangement.
Marianas Magnetite Tailings Project
The Marianas Magnetite Tailings Project covers the mining and upgrading of a known supply of magnetite and hematite tailings located just outside the mining city of Copiapo.
Condor Blanco holds 50% of the project and has the right to acquire 100% of this project prior to 30 June 2014.
Tailings would be processed onsite into a saleable concentrate that would then be transported to an iron ore export facility at Caldera via the existing freeway.
The company has a Heads of Agreement with Lacerta Finance and Mining, a Chilean mining contractor, that will lead to the processing of 60,000t/month and within three months of permitting, 100,000t/month to be reached before the expiry of one year.
Lacerta will relocate its recently purchased magnetite plant and all necessary mining equipment to Marianas on receipt of final mine permits.
The stronger results from the commercial scale trial at Condor Blanco Mines' Marianas Magnetite Tailings Project including Davis Tube Test contained iron of 69.63% iron compared to 65.22% contained iron from earlier 40 tonne bulk samples could enhance the modelled economics of the project.
To top it off, the company is due to close debt funding of €10 million, which will be immediately value accretive given its current market cap. of just circa $4 million.
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