Centaurus Metals (ASX:CTM) continued inching out of survival mode by announcing the addition of an iron ore exploration deal adjacent to its existing Candonga DSO project in Minas Gerais, Brazil. The project, referred to as Candonga West, is early stage, with no drilling as yet undertaken; however, extensive sampling has indicated large areas of DSO-level iron mineralization in excess of 60 percent iron. Centaurus has secured an initial six-month option on the 11,786-hectare project for the payment of $300,000 real (AU$140,000). It has the ability to extend it to a total of two years for an additional $500,000 real, and then a$1-million real fee if the option is exercised and the title is transferred. Should Centaurus commence production from any of the leases, a production bonus of US$1.5 million will be payable. While not cheap for an early stage exploration play, the deal payments are weighted toward the back end, providing time for the project's potential to be assessed. On the basis of sampling, Centaurus has placed a conceptual exploration target on the project of between 3.5 and 8 million tonnes of high-grade DSO ore over 64 percent iron, with a larger tonnage of underlying lower-grade itabirite. The geology seems to be the standard Proterozoic banded iron formations that are common through Eastern and Northern Brazil, with localized surficial weathering to high-grade DSO ore. The degree of enrichment is not on par with the giant systems of Carajas or the Iron Quadrilateral, but pockets of surficial high-grade ore are common in the region and generally of high quality, albeit small in size. Work is to commence almost immediately, with continued sampling, aeromagnetic surveys and drilling. The rationale for the deal is clearly one of adding cheap tonnes. Centaurus is currently well advanced in approvals for a small, 300,000-tonne-per-annum iron ore operation at its 100-percent-owned Candonga project, which it hopes to have in production by Q2 2015. While small, the project can be developed at a very low capital cost of only AU$3.6 million, and so is probably fundable even in these difficult markets, offering the company a vital lifeline into cash flow. Candonga, however, is small, with a DSO reserve of only 1.2 million tonnes at 60.5 percent iron; it thus has a limited life, currently estimated at between three and five years of small-scale production. The addition of this new project, 8 kilometers via good road from the planned Candonga plant, is a clear attempt to beef up the resource and extend that mine life as cheaply as possible.