VANCOUVER, BRITISH COLUMBIA--(Marketwired - Jul 21, 2015) - Cancana Resources Corp. (TSX VENTURE:CNY) (the "Company" or "Cancana") announced today results from the second quarter of operations from its joint venture Brazil Manganese Corp ("BMC").
- Increased production by 55% quarter over quarter
- Rio Madeira plant approaching full production capacity
Cancana's President & CEO, Anthony Julien, said, "We are pleased to report our efforts to operate the BMC plants with more stability and efficiency is generating positive results. Following numerous operating enhancements, we increased production allowing our sales team to again achieve significant premiums to global benchmark manganese prices. We continue to improve our operations and also look forward to reporting results of our first exploration drill program that will be the foundation for our future expansion opportunity."
Production
Second quarter production at BMC totalled 2,143 tonnes of manganese oxide bringing the current stockpile to 7,056 tonnes (net of sales). Assays for the second quarter production are still pending. Assays for the first quarter production material reported an average grade of 51.0%. The average grade of the overall stockpile after sales based on available assay data for Q1 2015 was 52.4% Mni.
Under the guidance and leadership of recently appointed Mine Manager, Paulo Gontigo, the Rio Madeira plant is approaching full production capacity of approximately 1,000 tonnes per month. In addition to adding a second shift at the plant, a dry sieving process was installed that has resulted in increased production. Dry sieving removes material less than 5mm in size, which is the soil and fine manganese, and thereby aids in the washing ability of the plant by generating less clay.
Production in the second quarter was primarily from the Rio Madeira plant. From the beginning of June to the second half of August, the Jaburi plant has been closed as it is being retrofitted to meet safety and fire standards.
Sales
Second quarter sales at BMC totalled 338 tonnes and sales prices continued to average more than a 30% premium on current CIF prices. CIF Tianjin pricing for 44% manganese was $2.98 per dmtu as of June 26th, 2015 (source: www.metalbulletin.com).
Fertilizer sales in Brazil slowed in the first-half of 2015 as farmers were concerned about weaker crop prices, the lower purchasing power of the Real and delayed credit availability from the government. As a consequence manufactures reduced their purchases of BMC manganese. It is expected the fertilizer stocks should be reduced to normal levels in the second half of 2015 and BMC sales volumes increase. The Company is targeting to have customer contracts with varying terms of up to one year to build relationships and a market presence. This sales program marks the beginning of our plan to have up to 70% of manganese production committed under offtake agreements.
On behalf of the Board of Directors of
CANCANA RESOURCES CORP.
Anthony Julien, President, CEO & Director
QUALIFIED PERSON
The technical information about the Company's mining activities has been prepared under the supervision of and verified by Dr. Adrian McArthur (B.Sc. Hons, PhD. FAusIMM), a consultant to Brazil Manganese Corporation, who is a "qualified person" within the meaning of National Instrument 43-101.
ABOUT CANCANA
Cancana Resources Corp is focused on exploring and developing the BMC manganese project in Brazil with its joint venture partner Ferrometals, a special purpose investment vehicle for The Sentient Group. Sentient is a resource-focused private equity fund with approximately $2.7Bn in assets under management, and a 15-year track record for advancing resource projects from early stage to pre-feasibility and development. Cancana and Ferrometals are employing a two-pronged strategy at BMC. The primary objective is to advance BMC to an initial resource and onward to pre-feasibility, while also expanding current small-scale production to support those exploration activities. Further information can be found on the Company's website: www.cancanacorp.com.
FORWARD-LOOKING STATEMENTS
Some statements in this news release contain forward-looking information or forward-looking statements for the purposes of applicable securities laws. These statements include, among others, statements with respect to the Company's plans for exploration and development of the Brazil properties and potential mineralization. These statements address future events and conditions and, as such, involve known and unknown risks, uncertainties and other factors, which may cause the actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the statements. Such risk factors include, among others, failure to obtain regulatory approvals, failure to complete anticipated transactions, the timing and success of future exploration and development activities, exploration and development risks, title matters, inability to obtain any required third party consents, operating hazards, metal prices, political and economic factors, competitive factors, general economic conditions, relationships with strategic partners, governmental regulation and supervision, seasonality, technological change, industry practices and one-time events. In making the forward-looking statements, the Company has applied several material assumptions including, but not limited to, the assumptions that: (1) the proposed exploration and development of mineral projects will proceed as planned; (2) market fundamentals will result in sustained metals and minerals prices and (3) any additional financing needed will be available on reasonable terms. The Company expressly disclaims any intention or obligation to update or revise any forward-looking statements whether as a result of new information, future events or otherwise except as otherwise required by applicable securities legislation.
The Company cautions that it has not completed any feasibility studies on any of BMC's mineral properties, and no mineral reserve estimate has been established. Because the Company production decision is not based upon a feasibility study of mineral reserves, the economic and technical viability of the property has not been established.
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| i Stockpile grades are monitored by a channel sampling program on individual truckloads of manganese oxide it is delivered to a centralised storage facility. Samples have been analyzed via lithium borate fusion XRF techniques at accredited laboratories: |
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SGS Laboratories in Belo Horizonte, Brazil - 157 samples; |
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Bureau Veritas Minerals Laboratories in Perth, Western Australia - 45 samples (with a further sixty-six being processed at the time of reporting). |
Additional trace elements have been monitored via 4 acid digest and ICP-OES analytical techniques SGS Laboratories, and Fused Bead Laser Ablation ICP-MS techniques at Bureau Veritas Minerals Laboratories.
Submissions include certified references to monitor laboratory performance, which have returned results within the expected laboratory analytical error margins. Average ore grades fall within laboratory analytical tolerance limits of up to +/- ~1.8% Mn at two standard deviations.
Stockpile tonnages are currently monitored by an independent weighbridge service, with trucks weighed upon arrival and departure in the township of Espigao d'Oeste. Ninety-one percent of the stockpile tonnage has been confirmed by weighbridge records, with the remainder (from early production) having been surveyed.