What is the current stage of development of SAFM’s Ponto Verde Iron Ore project and what are the key achievements during 2015 and the first half of 2016?

The Ponto Verde Iron Ore project is in the production stage, with a license to produce 1.5 million tons of iron ore per year. SAFM is currently producing 25,000 tons of sinter feed per month and 20,000 tons of small lump per month, which are sold to Namisa and the pig iron markets in Brazil, respectively. In April 2016, SAFM started operating a medium intensity magnetic concentrator responsible for producing 20,000 tons of concentrate per month. Additionally, SAFM is commissioning a new high intensity magnetic separator that will produce high-grade concentrate at a rate of 20,000 tons per month. SAFM has undergone three drilling programs for a total of 10,000 meters and has had two JORC resource statements done, with resources amounting to 300 Mt of 40.7% iron ore. The company is now focused on the bankable feasibility study required for the project’s expansion to a capacity of 8 Mt per year, with the study supervised by Logichem. The company is working with various other companies, including Coffey Mining and Golder Associates, for the geotechnical and mine planning aspects, respectively. The bankable feasibility study started in April 2012 and is expected to be completed by December of that year. On the environmental side, SAFM has a good relationship with local environmental licensing agencies and is expecting positive results for the permits for the expansion of the project.

What was SAFM’s original production goal for Ponto Verde and why did they decide to increase it to 8 Mt per year? What is the timeline for achieving this objective?

SAFM’s initial plan was to operate at 3 Mt per year, with an expansion to 6 Mt per year. However, after a desktop study with Coffey Mining, SAFM decided that an 8 Mt per year operation would be best suited given the space available for waste and tailings. SAFM’s long-term plans involve a further expansion to 16 Mt per year, depending on negotiations with VALE, who owns the other half of the mountain where Ponto Verde is located. The timeline for achieving the 8 Mt per year production goal is not specified, but SAFM’s bankable feasibility study is currently only considering their own assets.

What are the current market fundamentals for iron and is SAFM considering other assets apart from Ponto Verde?

The price of iron ore has been affected by China’s economic slowdown, but a recovery is occurring and the market is generally optimistic about it. SAFM is satisfied with the current price of $125 per ton. While SAFM is always looking for new projects, only about 0.5% of suggestions received make economic sense due to the specific challenges of iron ore mining.

What is SAFM’s mid-term and long-term vision and what are the main highlights for the Ponto Verde project in 2016?

In 2016, SAFM plans to start operating the new concentrator and finalize their bankable feasibility study, followed by several audits. They also hope to receive all necessary licenses for the expansion project and plan a new drilling program depending on information provided by VALE. SAFM’s focus is on the expansion program and negotiations with VALE for the unification of the two assets. The mid-term and long-term vision for SAFM is not specified.