Cleveland Mining and BC Iron have converted the memoranda of understanding signed for three iron-ore projects in Brazil into binding option agreements.
The option agreements will allow the firms' newly formed alliance to acquire up to 80% stake of the projects from private Brazilian company, Bahmex.
The alliance explored over 50 South American iron-ore projects, ranging from exploration stage to producing mines, before choosing three projects which are situated in the Brazilian states of Salvador da Bahia (the Caetite and Silvestre projects) and Minas Gerais (the Minas Novas project).
The projects, which cover an area of 272km² and 1,064km² respectively, feature 81 tenements situated near existing or under construction rail infrastructure, which in turn connects to existing or under construction port facilities.
Bahmex and mining consultant Coffey Mining have identified exploration potential for the Caetite concessions based on detailed geological mapping, airborne geophysical data interpretation, ground magnetometric surveys, and trenching, sampling, chemical analyses and concentration tests.
Exploration fieldwork will commence at the Caetite project, with two months of detailed mapping, sampling and logistics preparation undertaken prior to drilling.
First pass drilling intends to confirm the depth extent of the highest priority targets, with up to 2,000m to be drilled in each state.
BC Iron managing director Morgan Ball said that greenfield exploration projects are an important component of a balanced project pipeline and complement the company's interest in the Nullagine joint venture operation and the Pilbara.
"The earn-in structure allows the alliance to assess the prospectivity of the Brazilian tenure in a staged manner with low initial expenditure and optionality," Ball said.
Image: The option agreements will allow Cleveland Mining and BC Iron to acquire up to 80% stake of the projects from Bahmex. Photo courtesy of FreeDigitalPhotos.net.