Cancana Resources (CNY.V) hasn’t disappointed us as the company has released an extensive update on its exploration efforts at the Brazil Manganese project in Brazili’s Rondonia state.
Cancana’s first exploration program was aimed at confirming the geological model of the manganese project and to find out how deep the currently known manganese mineralization is running. The company has now completed 38 drill holes for a total of almost 2,100 meters, and as you notice, these drill holes were relatively shallow (and that’s positive as a large part of the manganese is located very close to surface which should be quite cheap to mine the ore.
The drill bit has confirmed the expectations as the company encountered high-grade manganese at ‘depth’ with intercepts of almost 2 meters of almost 58% Manganese, and that’s almost unheard of! Cancana now has also confirmed the manganese mineralization is continuing until a depth of at least 70 meters, and as the updated Jabiru plant will also be able to process primary vein material, it looks like the future of the Brazil Manganese project has now been secured.
We are now convinced Cancana Resources is sitting on something special here, as the aerial geophysics have been confirmed by follow-up exploration on the ground. With less than 60% of the property being explored, Cancana has discovered no less than 62 (!!) Manganese anomalies and a total strike length of in excess of 200 kilometers, and yes, that’s 200,000 meters. As the manganese veins are relatively narrow (we expect the true widths to be 1.5-2.5 meters), the strip ratio will be very important, but based on a 200,000 meter strike length and an average depth of 30 meters and width of 2 meters, there seems to be in excess of 30 million tonnes of Manganese here, and based on a sales price of roughly $200/t, the in-situ value could be close to $6B. Of course, this is just our back of the envelope calculation but we are convinced the Brazil Manganese project is finally proving up the critical mass needed to convince the market it has a truly unique project.
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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.
