Cancana Resources (CNY.V) is on the right track and the company has announced its JV project has increased production by in excess of 50% compared to the first quarter of this year. The total second quarter production was 2,143 tonnes of manganese oxide, of which 338 tonnes were sold at approximately US$170/t (based on reported +30% premium on manganese spot price of $2.98 per dmtu out of China) for a revenue of almost US$70,000.
The majority of the second quarter production was added to Cancana’s strategic stockpile which now contains in excess of 7,000 tonnes of ore, for a total value of almost $1.5M. We think Cancana will use this stockpile as leverage in negotiations with long-term offtake partners for its manganese production.
The production rate in the current quarter should increase even further, as Cancana reported its Rio Madeira plant is approaching full production (1,000 tonnes per month vs the on average 700 tonnes per month in the second quarter), so we’d expect another 25%+ production increase as the Jaburi plant should be brought back online by the second half of August after an overhaul to make it meet the required fire and safety standards. This should keep the company on track to produce 20,000 tonnes of Manganese this year which will provide a part of the financing needed to double the output by the end of next year.
Meanwhile, Cancana Resources is approximately halfway the first ever drill program on the project, and we are expecting a preliminary exploration update in the next few weeks, but the assay results will very likely only be published after the summer.
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Disclosure: The author holds a long position in Cancana Resources. Cancana is a sponsor of the website. Please see our disclaimer for current positions.
