Centaurus Metals has been forced to scale back the scope of its Jambreiro iron ore project in Brazil in a bid to secure funding and get the project into production as soon as possible.
The new plan is for an initial 1mtpa operation, eventually scaling up to a 2-3mtpa mine.
Centaurus said the scaled back proposal would cut its initial required capital expenditure by 61 per cent to $53 million, while still supporting average life-of-mine C1 cash operating costs of $22 a tonne, including royalties.
The company said the new plan would significantly reduce financing risk and allow the project to be brought into production sooner to take advantage of prevailing strong iron ore prices.
Under the revised scenario, development would begin in April next year with first production targeted for the first quarter of 2015.
"The company plans to establish a strong cash flow business from the initial 1mtpa Jambreiro development and then expand its production rate into the domestic market or as soon as it has established a direct export path for the Jambreiro high-grade product into the seaborne market," Centaurus said in a statement.
"No further environmental approvals will be required as the project is already approved for a 3mtpa production rate."
Centaurus also said it was continuing off-take discussions with a leading Brazil-based iron ore and steel group.
However it warned the finalisation of any off-take arrangement was reliant on the re-commencement of construction of a new port development in the south-east region of Brazil.
"At present, the timely completion of this partially constructed port capacity is awaiting the settlement of a sale of the port development to new international third parties," Centaurus said.
Managing director Darren Gordon said the best result for shareholders was to get into production as soon possible, so that the company could benefit from resilient conditions, strong demand and strong prices in the iron ore market.
"While we have every confidence that we will ultimately finalise a suitable life-of-mine off-take deal that will support project expansions, we cannot keep holding up the development and financing of the project waiting until this occurs," he said.
Centaurus shares last changed hands for 17.5 cents.