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Cancana JV increases Brazil processing capacity

Cancana Resources Corp. and its joint venture partner Ferrometals BV, said on Tuesday that it had increased production capacity at Brazil Manganese Corp

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Brazil output capacity boost

Cancana Resources Corp. (CVE:CNY) and its joint venture partner Ferrometals BV, said on Tuesday that it had increased production capacity at Brazil Manganese Corp.

"The successful commissioning of the new dry screen has enabled us to meet our target of expanding production capacity," said Anthony Julien, president and chief executive officer of Cancana.

"This is an important development, as our marketing team has identified opportunities for domestic and export sales contracts of up to 50,000 tonnes for our high-quality manganese oxide product. The increased capacity coupled with progressive sales of our 2015 and 2016 inventory has allowed us to accelerate sales plans, ahead of further plant improvements scheduled to commence in the fourth quarter on the Jaburi plant."

The Cancana JV has successfully commissioned a new dry screen, which has allowed the operation to achieve new production records.

BMC's second dry screen was ordered following the success of the dry screen commissioned in 2015. The new dry screen was set up for operation at the Ademir California prospect at the end of June and has completed a commissioning phase, during which operational output of final washed product has averaged 1,016 tonnes per week over a nine-week period.

The dry screen operates by removing the less than five-millimetre soil fraction at the site of the colluvial extraction, allowing more concentrated feed to be trucked to the operation's wash plants, resulting in higher output and lower transportation costs. BMC's original screen has recently been set-up for field operation at the Tumelero prospect.

The screen has set a new operational benchmark, with the prior weekly record being 726 t in 2015. The production of 7,477 t in the current quarter to date has already exceeded the previous record of 6,976 t in the third quarter of 2015, with six weeks of operation still to come. The dry screens provide for production capacity of approximately 30,000 t in 2016, based on expected usage through the transition into the wet season that happens around November. BMC is continuing with preparation and lodgement of extraction permits (Guias) to trial a variety of colluvial occurrences throughout the project area.

The sales and marketing team has continued to provide trial samples and product data to a variety of domestic and international manganese customers. The group is targeting speciality applications for the battery, fertilizer, welding and steel industries, where users understand the value of BMC's high-quality product. The expanded production capacity places BMC on track to accelerate sales ahead of the 50,000-tonne-per-annum upgrade of the Jaburi plant, with work on the installation of a new jigging circuit and crushing facilities expected to commence in the fourth quarter.

Ferrometals has contributed $30.05mln and Cancana has contributed $7.5mln to the Brazil Manganese Corp. joint venture such that Ferrometals owns approximately 80.03% and Cancana owns the remaining 19.97% of BMC.

Last month, the companies entered into a non-binding letter of intent with respect to a proposed restructuring and business combination transaction into a combined entity on the Toronto Exchange.

On Monday, Cancana recorded a swing into income in its first half 2016 trading. Read more.

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