Cancana Resources (CNY.V, MNO.V) has reported the Brazil Manganese project, of which it owns approximately 20%, has produced a total of 13,445 tonnes of high-grade manganese in the third quarter. Whereas the company has been selling its production in the domestic markets, the joint venture partners are now gearing up for their first international shipment as the quality of the manganese product is now widely recognized.
The sharp production increase was caused by the successful commissioning of a new dry screen which removes the soil allowing more concentrated feed to be trucked to the wash plants. Approximately 6,600 tonnes were sold during the third quarter, and the JV-co has entered into agreements to sell an additional 10,500 tonnes and this allows Cancana to take advantage of a tremendous increase of the Manganese price. This confirms our expectations as earlier this year, we explained why we thought the manganese price was unsustainably low.
With the production reaching record levels, it will be interesting to see how the market values the ‘new Cancana’ after merging its BMC stake with majority owner Ferrometals, owned by the Sentient group.
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The author has a long position in Cancana Resources. Please read the disclaimer
