Update - Tungsten Mining Operations, Brazil

RNS Number : 6859E

Evocutis PLC

12 February 2015

 



 12 February 2015

 Evocutis Plc

("Evocutis" or the "Company")

                                    Update - Tungsten Mining Operations, Brazil

Evocutis Plc (AIM: EVO) is pleased to announce that final contracts have now been signed that completes the acquisition of the initial 10% interest of the Bodó Tungsten Mine ("Bodó") in Brazil.

David Lenigas, the Company's Chairman, commented:

"Evocutis is pleased to conclude this key initial strategic acquisition in the exciting Bodó Tungsten Mine in Brazil, and we look forward to participating in expanding tungsten production significantly over the coming year."

Ownership:

Evocutis originally signed a Binding Term Sheet ("BTS") on 18th December 2014 to acquire an initial 10% interest in Brazil Tungsten Holdings Limited ("BTHL"), the owners of the producing Bodó Tungsten Mine in Rio Grande do Norte, Brazil, by investing US$1m in new capital in BTHL for the specific purposes of mine expansion.

Evocutis has paid the final payment of US$750,000 to BTHL, which is being directed towards the costs of expanding the operations at the Bodó Mine.

Evocutis has an exclusive option to increase its holding in BTHL to 20% within 60 business days by investing a further US$1million towards mine expansion.

About the Bodó Tungsten Mine, Brazil:

BTHL is headed up by mining specialists Stephen Fabian, Paul Berndt and Mark Burridge. BTHL owns, through its wholly-owned subsidiary, Bodó Mineraçao Ltda, the Bodó Tungsten Project ("Bodó"), which is located in Brazil's Seridó Tungsten Province in the State of Rio Grande do Norte. The Seridó Tungsten Province is Brazil's most important tungsten producing region and hosts the majority of Brazil's tungsten reserves. The project is located adjacent to highway RN203 and is 200 km west of the State capital of Natal.

Bodó is a high-grade tungsten operation employing 96 people, and is currently operating at the rate of about 50-60 tonnes of ore production per day from underground operations.  The ore is being processed through an onsite treatment plant with a current capacity of about 200 tonnes per day. Tungsten concentrates are sold to the global export market under an existing sales agency agreement with Wogen Pacific Limited.

It is intended that the funds provided by Evocutis will be specifically used to provide the necessary working capital to expand and improve the existing operations. For the mine, funds will be utilised to refurbish an existing incline shaft and advance underground development so that daily ore production can be tripled. For the mill, funds will be utilised to modify the plant, which is expected to improve tungsten recoveries from approximately 65% to an anticipated recoveries of over 80%, by adding grinding equipment to fully liberate the tungsten mineral.

Beyond this, the directors of Evocutis believe significant further growth potential exists from both continued underground development and several potential open pit mining areas already identified which have the potential to support continued cost-effective growth to levels of production a multiple above current levels.

BTHL's holdings consist of one mining lease and two exploration licenses totalling
189.6 hectares. The Bodó mining lease 000.894/1944 is surrounded by the adjacent exploration licence areas; 848.129/2006 (9,965 ha) and 848.129/2006 (281.75 ha).

The Departmento Nacional de Produção Mineral (DNPM) Mining Licence 000.849/1944 was
first issued on 2nd April 1948. The current lease was issued to Metais do Seridó S.A. on 3rd November 2009, it will expire on 3rd November 2039, but there is a right to extend the licence for a further 30 years. The neighbouring exploration licences of Tarantula and Area Sul were also issued on the 3rd November 2009.

The Bodó Mine when acquired by Brazil Tungsten Holdings Limited had a Simplified Environmental Licence (Licença Simplificada), which allows extraction of 4,500 t/m (approximately 185 t/d). This Simplified Licence was granted on the 26th March 2012 and is valid until 22nd September 2016. Brazil Tungsten, after consultation with the local authorities, intends to convert this to an unlimited operating licence (Licença de Operação) when production is ramped up in the future.

-END-

For further information, please contact:

Evocutis Plc
David Lenigas/Donald Strang	[phone]
	www.evocutis.com
Cairn Financial Advisers LLP
James Caithie/Carolyn Sansom	[phone]
	www.cairnfin.com

 

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