Aguia Resources (ASX:AGR) has had a Conceptual Mining Study...

Aguia Resources (ASX:AGR) has had a Conceptual Mining Study completed by SRK Consulting that indicates low cost parameters and robust economic potential for the company’s Três Estradas phosphate project in southern Brazil.

The deposit, which outcrops at surface, is expected to support an open pit mining project with production of 350,000 tonnes per year of superphosphate.

Initial capital is estimated at US$218 million and operating costs are estimated at US$177 per tonne.

SRK was engaged to evaluate the potential viability of an open pit mining project on a conceptual basis.

The Mining Study was based on the mineral resources audited by SRK and which represents less than half of the mapped strike length of the deposit phosphate mineralisation.

Notably, the phosphate mineralisation is open to the southwest and extends for an additional 1.4 kilometre of strike length with outcropping carbonatite.

The proposed mining project is an open pit, truck-excavator operation. Phosphate mineralisation extraction will involve drilling and blasting, with phosphate bearing rock and waste rock hauled to an on-site concentrator and waste dump.

The phosphate rock concentrate will be produced by flotation and will be transported via rail, which passes through the property, from mining site to the port city of Rio Grande.

It is planned that the phosphate concentrate will be upgraded to granulated single superphosphate at a plant located in Rio Grande.

Well-established infrastructure located close by will allow Aguia to reduce the development costs of the mine as services such as road, rail and power do not have to be constructed over long distances.

The Rio Grande port also offers excellent infrastructure with available rail access and an existing acid terminal, all of which support lower development costs.

This area of Brazil is entirely dependent on imported phosphate, largely from North Africa, and demand for Aguia’s product is expected to come from local fertilizer blenders.

Três Estradas has potential to be developed as a low cost supplier to the large farm belts of southern Brazil.

The company will complete the delineation of the resource prior to completing the economic analysis, but the project’s position on the cost curve indicates it is well positioned to generate significant cash flow for Aguia in the future.

Aguia is reviewing a number of funding options to ensure the company is sufficiently well capitalised through the next phase of exploration and project development that will be announced shortly.