South American Ferro Metals Limited (ASX: SFZ or “SAFM”) is a medium sized, low cost iron ore producer listed on the Australian Stock Exchange (“ASX”). The company owns the Ponto Verde Iron Ore Project based in the heart of the well-established Iron Ore Quadrilateral, 55 kilometres from the town of Belo Horizonte in the state of Minas Gerais, Brazil.
The company operates under a processing license of 1.5 Mtpa of Run-Of-Mine (“ROM”). The ore comprising friable Itabirite material is easily extracted by open pit mining and fed directly into its process plants, comprising of a beneficiation plant and two Concentrators.
The beneficiation plant comprises a simple two stage crushing and screening circuit that produces two products, namely Lump and Sinter Feed. The undersized material (<2mm) passes into the first stage Concentrator, that uses a two-drum medium-intensity wet magnetic separator to produce a high grade concentrate of 65% Fe. The resultant tailings are processed further through a second stage Concentrator utilising a high intensity magnetic separator to produce additional high grade concentrate of the same quality.
SAFM sells all its products to local steel and pig iron producers in Brazil, having secured offtake agreements with Vale and CSN (Namisa) for 75% of its total production.
The company has proven up a mineral resource of 301 MT at 40.65% Fe. The resource has been calculated based on drilling results to an average depth of 70 metres below the surface. However, exploration drilling at depth has highlighted that mineralisation extends to over 400 metres depth. Based on this, SAFM's has a target resource of 500 MT.
In February 2012, the company commenced its Bankable Feasibility Study (“BFS”) to expand the mine from a capacity of 1.5Mtpa to 8 Mtpa ROM throughput by the end of 2015.
Significant work has been completed on the BFS to date, with the completion date of the study expected in the second half of 2014.