South American Ferro Metals: Report of activities via 30. September 2013
Highlights:
1. Record production volume in the past quarter.
2. New Offtake agreement with Vale for the sale of concentrate and sinter material.
3. Acquisition of waste and spoil storage as part of SAFM's expansion strategy to 8 million tpa
4. Ongoing progress of the Bankable Feasibility Study with an expanded scope of work. Bankable feasibility study should be done via 30. April 2014 finished.
5. Repair program completed successfully.
South American Ferro Metals Limited (ASX: SFZ) ("SAFM" or the "Company") provides an overview of the following over the past three months via 30. September 2013 should be read in conjunction with Appendix 5B.
SAFM's Chief Executive Officer, Stephen Turner said:
"SAFM's production team has worked well to eliminate the recent flood problems and is pleased to announce record-high production for the quarter. During the quarter, the plant was completely overhauled and the output continues to exceed the daily record production.
The acquisition of waste and overburden terrain marks another important milestone in the expansion of SAFM's project. We also made great progress in the FSO and its planned completion in April 2014. The work continues and will accelerate on some fronts in the next two quarters.
We have again focused on selling on all SAFM products and it is worth mentioning that the company recently entered into an offtake agreement with Vale Rio Doce for the sale of both sintered and concentrate products. "
1. Expansion of the project
Acquisition of waste and overburden terrain
SAFM entered into an agreement to acquire 100 Ha Land in the south of its Ponto Verde mine. Details were already on the 10. October 2013 announced. An option agreement could also be signed for further 100 Ha in the immediate vicinity for future needs.
A technical and environmental study of the area was carried out by Consultoria e
Empreendimentos de Recursos Naturais Ltda ("CERN") and confirmed that there are no restrictions on the landfilling of waste and overburden on both sites. Furthermore, there are no archaeological impacts that would restrict its use.
A detailed study of the volume capacity ratios between waste and overburden was carried out by the engineering consultancy GeoGraphos Engenharia e Consultoria Ltda ("Geographos"). The study showed that the total area covered by the two land purchases is sufficient for about 64 million cubic meters of waste and overburden material. This is sufficient for the mine service life of the extended project.
mine planning
Coffey International Limited ("Coffey") has completed a study to demonstrate the viability of the expanded PVM Mine. They also carried out a mining supply study including budget offers for the equipment needed for production and tailings.
Based on the above studies, a first mining plan could be outlined including the mining method and equipment as well as the production rate. Further mining plans and design studies should be completed by the end of the year.
Plant and infrastructure design
SAFM is currently evaluating two logistics solutions for transport from the mine to the railway terminal. First geological investigations could be completed for the intended processing plant.
CEMIG, one of the largest Brazilian power producers and suppliers, has completed a feasibility study to power the mine. The study shows the plant and the intended pipeline together with the estimated costs. It is in talks for the conclusion of an agreement for the future power supply.
You are also in talks with the port operator. It is expected that the proposed port operator will be responsible for all port services, including warehouses and storage areas.
Permits and legal support including environmental licenses
Submissions for the environmental and installation licenses were made to the relevant environmental and regulatory authorities in July 2013. SAFM expects to get these licenses issued at the beginning of 2014.
An archeological field survey was conducted at the mine and the final report was sent to the National Institute of Brazilian Artistic and Historical Heritage ("IPHAN") in January 2013. SAFM also completed registration of landowners along the proposed logistics corridor for expansion.
outlook
Work is continuing and it is expected that several of the FSC's ongoing processes will be accelerated with emphasis on permits and environmental licenses, land areas and field studies. The work on the FSO with its engineering continues and includes the mining study and further updates to the earlier Feasibility Study for the power options. Further metallurgical test work will be undertaken and the report will be finalized in the next 5 months. The flowchart will be completed based on a pellet product. The metallurgical testwork will be completed during the November 2013 and the BFS will be completed in late April 2013.
2. production volume
To view the full press release please follow the link:
http://www.irw-press.com/dokumente/SAFM_291013_DE.pdf
SAFM announced record high production during the quarter as the previous production constraints were eliminated. Achieving this level was impressive, especially considering that the facility was closed for overhaul for a week.
SAFM was able to successfully refurbish the water treatment during the quarter, along with the repair program that was implemented on the plant and which is now responsible for the record production in October 2013.
3. sales volume
To view the full press release please follow the link:
http://www.irw-press.com/dokumente/SAFM_291013_DE.pdf
The sales of enriched product declined by 42% during the September quarter 2013 to 65.740 t. This was due to deeper sinter grades resulting from the mining of low grade ore, as well as the temporary unavailability of trucks to deliver the product to customers.
On the 2. September 2013 joined SAFM in an offtake agreement with Vale for the supply of 300.000 tons of concentrate and 170.000 tons of sintered material to 31. December 2014 at market prices. Vale completed numerous safety and well-being training sessions for her truck drivers, leading to delivery delays. Deliveries started during the current quarter, and SAFM expects inventories to reach normal levels via 31. December 2013 will lower again.
Average weighted net selling prices increased by 14%, mainly due to the increase of 5% of average prices of net sales prices for their concentrate product over the quarter and a higher weighted share of concentrate sales.
4. security and environment
SAFM's safety and environmental results support Brazil's business operations and growth. There were no absences due to injury during the period.
5. Cash flow from operation
SAFM reported a negative operating cash flow of 4,3 million for the September 2013 quarter. The Company's capital projects resulted in expenses of $ 1 million used to improve the investment. During the quarter, SAFM 15 received $ 1 million from Deutsche Bank, resulting in a cash balance of $ 10,4 million at the end of the quarter.
More information about cycling in the Leipzig Region as well as more interesting routes:
South American Ferro Metals Limited
Stephen Turner (CEO)
Ph: + 61 2 8298-2004 or + 61 (0) 418 440 844.
Website: www.safml.com
In Europe:
Swiss Resource Capital AG
Jochen Staiger
ppgad@pucrs.br
www.resource-capital.ch
About South American Ferro Metals Limited:
South American Ferro Metals Limited owns 100% of the mineral rights and property of the Ponto Verde iron ore project in Brazil. Ponto Verde is located in the heart of the Iron Ore Square just 55 km from the city of Belo Horizonte in the state of Minas Gerais. The Eisenerzviereck is a rich mining area and the project is close to established mines, iron & steel plants as well
already existing infrastructure. SAFM currently sells three iron ore products from its Ponto Verde mine to local steel producers in Brazil. The Company is currently completing a bankable feasibility study (FSO) to increase Ponto Verde's annual capacity of 8 million tonnes ROM throughput from currently 1,5 million tonnes of licensed capacity.
Forward Looking Statements
This press release contains forward looking statements that involve inherent risks and uncertainties and are related to potential events in the future. There are a number of factors that influence these developments, which can lead to very strong deviations in the outcomes and circumstances previously assumed.
Only the original English press release applies.
About South American Ferro Metals Limited:
South American Ferro Metals Limited owns 100% of the mineral rights and property in the Ponto Verde Iron Ore Project in Brazil. Ponto Verde is located in the heart of the Iron Ore Quadrilateral, 55 kilometers from the town of Belo Horizonte in the state of Minas Gerais. The Iron Ore Quadrilateral is a proliferous iron ore mining area, and the project is located proximate to established mining operations, iron and steel plants and existing infrastructure.
SAFM currently sells three iron ore products from its Ponto Verde mine to local steel producers in Brazil. 8 Mtpa ROM throughput, from its current 1.5 Mtpa licensed capacity.
Forward Looking Statements
This announcement contains certain forward looking statements which by nature, contain risk and uncertainty because they relate to future events and depend on the future. By these expressed or implied by these forward looking statements.
Website: www.safml.com
No liability is assumed for the accuracy of the translation! Please note english original message!
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