Interesting article, 10 April The Australian - Mining and Energy. Long read, but worth the read.
Caveat Empor!
"It comes as somewhat of a surprise that recently-listed Perth-based junior Carnavale Resources says it is on the verge of acquiring "significant" iron ore projects in Brazil.
Carnavale has signed a Letter of Intent over 30,000 hectares of tenements in Brazil with an application to acquire a further 30,000 hectares.
Why it would say in its ASX release that these tenements hold "two significant iron ore projects" seems odd, given that before it expands on the Letter of Intent it has 30 days to carry out technical and legal due diligence for both the Parmagiana and Ilha Redonda projects.
Obviously, both are miles away from ever being JORC-compliant, but Carnavale said the two projects have "proven iron ore mineralisation".
But it looks like the vendors are prepared to give them both away for a song. Pending how the due diligence stacks up, Carnavale will pay $US500,000 for both plus US10c a tonne for any iron ore produced and a 1 per cent net smelter return.
As far as infrastructure goes, Carnavale said Parmegiana - 565 kilometres from Cuiaba which is in the heart of South America, can be accessed from a number of nearby towns and the area has "associated infrastructure of large regional towns".
Why is infrastructure so important? Because it can cost millions to develop a mine, find the electricity and truck/rail/ship it to overseas markets.
Carnavale said a brief reconnaissance mission to the area last year returned iron mineralisation of up to 69 per cent comprising of both hematite and magnatite formations.
At Ilha Redonda, in the northern Brazil state of Amapa and 30 kilometres from the Santana Port, Caranavale said other nearby deposits have returned iron ore values around the 60 per cent mark with previous exploration returning high-grade hematite mineralisation.
It is certainly a lot for potential investors to get their heads around.
But no doubt many potential investors will note with interest the driving forces behind the company.
Some will even remember that executive director Ron Gajewski was chairman of Citrofresh, the Geelong-based company which in 2005 said its miracle potion could help prevent the spread of infectious diseases like HIV.
That announcement, which is subject to an ASIC's civil action against Citrofresh managing director Ravi Narain alleging misleasing statements - something he has denied, helped create a massive spike in Citrofresh shares which dissipated the following day when it revealed the potion was neither a cure nor a vaccine.
The stock price has never returned to those levels.
On the day of the announcement, Mr Gajewski sold 430,880 shares in Citrofresh via his personal company Vienna Holdings for $241,977.
One could argue that it was smart business sense, selling shares at a good price. Others could argue differently, given the position he held with the company.
He quit the company less than four months after the controversial announcement was released. No explanation was given why.
ASIC is believed to have investigated his share trading in Citrofresh, but never made any allegations against him or fellow director Mathew Walker who also sold shares during the share price rally.
There is no allegation of any wrong-doing against Mr Gajewski, but shareholders don't like it when directors can't back up their faith in a company with their own wallet.
Vienna Holdings is a major shareholders of Carnavale with a 5.68 per cent stake.
Mr Gajewski would have seen that parcel's value improve dramatically yesterday on announcement of the possible Brazilian acquisitions."