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Cancana JV doubles manganese oxide output in Q3 vs year ago

Tuesday, November 1, 2016 8:49
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(Before It's News)

Cancana Resources Corp (CVE:CNY) shares rose on Tuesday after the company updated on output growth from its Brazil Manganese Corp. (BMC) project with its joint venture partner Ferrometals BV.

The Cancana JV achieved a new quarterly production record of 13,445 tonnes of manganese oxide mineral product in the third quarter of 2016. The new production figure represents almost double the output compared to the equivalent period in 2015.

Production for the first nine months of 2016 of 21,176 tonnes already exceeds the 2015 annual production total of 17,037 tonnes. For the period from January 1, 2016 through October 31, 2016 production totalled 26,259 tonnes.

The increased production follows the successful commissioning of a new dry screen established at the Ademir California Prospect, which has supported an increase in weekly production rates (averaging 1,037 tonnes since installation at the end of June).

The dry screen operates by removing the less than 5mm 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). The dry screen supports an increase in production capacity to approximately 30,000 tonnes for 2016, based on expected utilisation into the wet season transition.

Preparations continue for installation of the pilot plant, with all imported equipment now in Brazil and civil works bidding under review. The pilot plant will introduce more efficient jigging and improved water utilisation, along with the ability to crush and process harder breccia ore types beyond the capability of the current wash plants.

During the third quarter of 2016, BMC sold 6,622 tonnes of manganese mineral product, reaching a total of 20,088 tonnes delivered for the nine month period to September 30, 2016. For the period from January 1, 2016 through October 31, 2016 sales totalled 25,660 tonnes, with negotiated commitments for an additional 10,507 tonnes, bringing the total for sold and committed sales to date of 36,167 tonnes.

The sales team continues to target speciality applications in the battery, fertilizer, welding and steel industries, which recognize a premium for the high quality of BMC’s product. The expanded production is allowing BMC to develop new relationships with international customers, with its first order being prepared for export from Porto Velho in October. Initial sales contracts are for placement to Chinese and Korean customers.

 

“We continue to execute on our strategic plan to install and build infrastructure that will support expanded production in the near term,” said Anthony Julien, President and CEO of Cancana.

“BMC previously established a strong domestic customer base for its premium product, but we are now preparing our first shipments for international export as a growing list of customers begins to recognize the value of our high grade ore. All of this is taking place against a backdrop of strengthening fundamentals in manganese pricing.”

CIF Tianjin pricing for 44% manganese was $1.86 per dmtu as of January 4, 2016 and was US$7.38 per dmtu as of October 21, 2016 (source: www.metalbulletin.com).

Cancana shares were up 1.3% at C$0.40 on Tuesday.

Story by ProactiveInvestors

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