Aura Minerals Inc. (TSX: ORA)
(“
Aura” or the “
Company”) is
pleased to announce that, based on the conclusion of a completed
feasibility study (the “Study”) and detailed analysis by the
management team, the Board of Directors of the Company has approved
the development of the Almas Gold Project (“Almas” or “the
Project”), an open pit gold mine located in the state of Tocantins,
Brazil. The Almas Project is expected to be operational by the
second half of 2022, with an after-tax total investment estimated
at approximately US$73 million, yielding an after-tax net present
value (“NPV”) of US$183 million when using the weighted average
consensus gold prices for the projected period of US$1,558 per
ounce. An upside scenario using a gold price of US$1,800 per ounce
yields an after-tax internal rate of return (“IRR”) of 57% and
after-tax NPV of US$260 million. Average annual gold production is
estimated at 51,000 ounces during the first four years of the
Project, with an estimated life of mine of 17 years, based on
mineral reserves estimated in accordance with National Instrument
43-101 – Standards for Disclosure for Minerals Projects (“NI
43-101”). The Almas Project is wholly-owned by Aura.
Related to this announcement, the Company is
also pleased to announce the completion of a technical report (the
“Technical Report”) for Almas with the title “Updated Feasibility
Study Technical Report (NI43-101) for the Almas Gold Project, Almas
Municipality, Tocantins, Brazil”, prepared by various consultants
based in Canada and Brazil. The Technical Report summarizes the
results of the Study, in accordance with NI 43-101, and is expected
to be published within 45 days from the date of this press
release.
Rodrigo Barbosa, CEO of Aura, comments: “I am
proud to be able to make this announcement today. Not only does
this decision show the value Aura is getting from its 2018
strategic merger with Rio Novo Gold but also emphasizes the
continued effort of the Aura team to deliver on its promises. The
results of this team effort are that Aura has been able to optimize
the project, allowing us to build a safe, sustainable future while
enhancing growth and returns. As always, Aura is focused on
developing low risk projects, with a focus on reduced payback while
keeping the project flexible enough to access upsides from
additional investment in exploration to seek to expand resources
for when Almas is closer to operation.”
Almas Gold Project
The Project is located in the state of
Tocantins, Brazil. Almas consists of three deposits (Paiol, Vira
Saia and Cata Funda) and several exploration targets, including
Nova Prata/Espinheiro, Jacobina and Morro do Carneiro. Of these,
only the three deposits, Paiol, Vira Saia and Cata Funda, have seen
significant exploration work.
The Project was added to Aura’s portfolio early
in 2018 as a result of the merger of the Company with Rio Novo Gold
Inc. (“Rio Novo”). While studies on the Project had been previously
carried out by Rio Novo (“Updated Feasibility Study Technical
Report for the Almas Gold Project, Almas Municipality, Tocantins,
Brazil” prepared for Rio Novo by RungePincockMinarco Limited, dated
August 9, 2016), Aura’s management has since been evaluating
several alternatives to de-risk the Project while improving
returns, focusing on reducing capex and bringing strong cash flows
to the first years of operations.
Since Aura assumed control of the project from
Rio Novo, a series of new studies have been developed with the
support of Ausenco Engineering Canada Inc, SRK Consultores do
Brasil Ltda and other experienced consultants in Brazil. As result
of such studies, the planned production rate was reduced from 2.0
Mt/year to 1.3 Mt/year and layout was optimized (reducing the
project footprint and also reducing environmental impacts and the
need to acquire large areas). There was a shift in focus regarding
production, which is expected to allow the Company to target higher
grades during the first years of production while keeping the
critical process equipment, such as the grinding circuit and key
infrastructure, at 2.0 Mt/year to facilitate capacity increases.
Aura also intends to investigate the geological potential of other
targets on the property.
Highlights
The main results disclosed in the Study are summarized
below:
- Beginning of construction: April 2021
- Production / ramp-up phase: Expected for Q3 2022
- Commercial production: Expected for Q4 2022
- Years in production (not considering potential for expansion in
mineral reserves): 17 years
- Production estimates: -- Average annual
production • 2023 to 2026: 51,000
Ounces • 2027 to 2031: 43,000
Ounces • 2032 to 2039: 20,000
Ounces
The Company believes Almas has the potential to
increase mineral resources and mineral reserves in certain areas
within its existing permits with additional exploration activities.
Such potential increases have not been incorporated in the Study
and cannot be assured.
Financial Key Performance Indicators (“KPIs”) expected
for the Project:
Main assumptions:
- Gold price: US$ 1,558 / Oz
- Exchange rate (BRL / USD): R$ 5.155
- Discount rate: 5%
|
|
Gold prices (US$/oz) |
|
|
$ 1,200 |
$ 1,558 |
$ 1,900 |
After-tax Project Capex |
US$ million |
72.8 |
72.8 |
72.8 |
After-tax NPV |
US$ million |
69.2 |
183.1 |
291.9 |
After-tax simple payback |
years |
3.1 |
2.0 |
1.6 |
After-tax IRR |
% a.a. |
22% |
44% |
62% |
Pre-tax Project Capex |
US$ million |
66.4 |
66.4 |
66.6 |
Pre-tax NPV |
US$ million |
91 |
231 |
366 |
Pre-tax simple payback |
years |
2.8 |
1.7 |
1.3 |
Pre-tax IRR |
% a.a. |
27% |
54% |
76% |
Results above are shown assuming that the
project is financed with 100% equity, in compliance with NI 43-101.
However, the Company has established a target to leverage the
Project, aiming for between 50% to 70% debt / total Capex.
Sensitivity analysis were built in order to
simulate project financial performance as per its Return on Equity
(ROE) according to different scenarios of gold price, as well as
capital structure with debt on total capital:
|
|
Gold Price
(US$/oz) |
|
|
ROE (% p.a.) |
|
$ 1,200 |
|
$ 1,400 |
|
$ 1,558 |
|
$ 1,700 |
|
$ 1,900 |
|
$ 2,100 |
Debt/ Total Capital |
|
0% |
|
22% |
|
35% |
|
44% |
|
52% |
|
62% |
|
73% |
|
30% |
|
30% |
|
48% |
|
61% |
|
72% |
|
86% |
|
100% |
|
50% |
|
43% |
|
67% |
|
84% |
|
98% |
|
118% |
|
136% |
|
70% |
|
74% |
|
111% |
|
136% |
|
158% |
|
188% |
|
217% |
Additional Considerations
Beginning of construction is subject to
obtaining final documentation on land use agreement and
environmental licenses with the State of Tocantins in Brazil, which
have already been requested by the Company in order to meet the
expected timeline of the Project.
Mineral Resource and Reserve
Estimates
The Study includes updated mineral resource and
reserve estimates for all three deposits plus historical leach pad
materials. A summary of the mineral resource and reserve estimates
which are expected to be included in the Technical Report are shown
in table of 1 and 2 below.
Table 1. Almas Gold Project Mineral Resources
(M&I)*
ALMAS GOLD PROJECT MEASURED AND INDICATED ( M&I)
RESOURCES |
DEPOSIT |
CUT-OFF |
TONNES |
AU (G/T) |
AU (OZ) |
Paiol |
0.29 |
17,548,140 |
0.98 |
552,460 |
Cata Funda |
0.34 |
838,000 |
1.72 |
46,460 |
Vira Saia |
0.31 |
3,354,690 |
0.96 |
103,845 |
Heap Leach Pad (HLP) |
- |
1,510,090 |
0.88 |
42,680 |
Total |
- |
23,250,920 |
1.00 |
745,445 |
*Note:
- The mineral resource estimates were
prepared in accordance with the CIM Definition Standards for
Mineral Resources and Mineral Reserves, adopted by the CIM Council
on May 10, 2014, and the CIM Estimation of Mineral Resources and
Mineral Reserves Best Practice Guidelines, adopted by CIM Council
on November 29, 2019, using geostatistical and/or classical
methods, plus economic and mining parameters appropriate to the
deposit.
- Mineral resources are inclusive of
mineral reserves. Mineral resources that are not mineral reserves
do not have demonstrated economic viability.
- The estimate of mineral resources
may be materially affected by environmental, permitting, legal,
marketing, or other relevant issues. Please see the Technical
Report and “Risks relating to Mineral Resource and Mineral Reserve
Estimates” below.
- The effective date of the mineral resources presented in this
press release is December 31, 2020.
- The mineral resource estimate is based on an updated optimized
shell using 1800 $/oz gold price.
- Contained metal figures may not add due to rounding.
- Surface topography based on December 31st, 2016.
- The mineral resource estimate for
the Cata Funda deposit was prepared by Adam Wheeler, C.Eng. as a
Qualified Person as that term is defined in NI 43-101.
- The mineral resource estimate for
the Paiol and Vira Saia deposits and HLP were prepared Farshid
Ghazanfari, P.Geo. as a Qualified Person as that term is defined in
NI 43-101.
Table 2. Almas Gold Project Mineral Reserves
Summary*
ALMAS MINERAL RESERVES |
tonnes |
Au (g/t) |
Au (Oz) |
PAIOL |
PROVEN |
10,780,501 |
0.88 |
304,446 |
PROBABLE |
5,357,974 |
0.89 |
152,683 |
TOTAL |
16,138,475 |
0.88 |
457,129 |
CATA FUNDA |
PROVEN |
438,612 |
1.89 |
26,711 |
PROBABLE |
250,163 |
1.79 |
14,412 |
TOTAL |
688,775 |
1.86 |
41,123 |
VIRA SAIA |
PROVEN |
3,134,066 |
0.91 |
91,758 |
PROBABLE |
646,016 |
0.88 |
18,363 |
TOTAL |
3,780,082 |
0.91 |
110,122 |
GRAND TOTAL |
20,607,332 |
0.92 |
608,373 |
HEAP LEACH STOCKPILE |
PROVEN |
- |
- |
- |
PROBABLE |
1,275,233 |
0.90 |
36,900 |
TOTAL |
1,275,233 |
0.90 |
36,900 |
*Note:
- The mineral reserve estimates were
prepared in accordance with the CIM Definition Standards for
Mineral Resources and Mineral Reserves, adopted by the CIM Council
on May 10, 2014, and the CIM Estimation of Mineral Resources and
Mineral Reserves Best Practice Guidelines, adopted by CIM Council
on November 29, 2019, using geostatistical and/or classical
methods, plus economic and mining parameters appropriate to the
deposit.
- The mineral reserve estimate is
based on an updated optimized shell using 1500 $/oz gold price,
average dilution of 20% , and break-even cut off grades of 0.29 g/t
Au for Paiol, 0.31 g/t Au for Vira Saia and 0.34 g/t Au for Cata
Funda.
- Mineral reserves are the economic
portion of the measured and indicated mineral resources. Mineral
reserve estimates include mining dilution and mining recovery.
Mining dilution and recovery factors vary with specific reserve
sources and are influenced by several factors including deposit
type, deposit shape and mining methods.
- The estimate of mineral reserves
may be materially affected by environmental, permitting, legal,
marketing, or other relevant issues. Please see the Technical
Report and “Risks relating to Mineral Resource and Mineral Reserve
Estimates” below.
- The effective date of the mineral reserves presented in this
press release is December 31,2020
- Contained metal figures may not add due to rounding.
- Surface topography based on December 31st, 2016.
- Mineral reserve estimate for Almas
Gold Project was prepared under the supervision of Luiz Pignatari,
P.Eng. as a Qualified Person, competent to sign as defined by NI
43-101.
Qualified Persons
Tommaso Roberto Raponi, P. Eng. Principal
Metallurgist at Ausenco Engineering Canada Inc., Farshid
Ghazanfari, P.Geo., Geology and Mineral Resources Director for Aura
Minerals Inc, Luiz Pignatari, P.Eng. Principal Mining Engineer at
EDEM Consultants, Sao Paulo, Brazil and Porfírio Cabaleiro
Rodriguez, FAIG, Principal Mining Engineer at GE21 Consultoria
Mineral, Belo Horizonte, Brazil are qualified persons as defined by
NI 43-101 and reviewed the information that forms the basis for the
scientific and technical contents of this press release.
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements”, as defined in
applicable securities laws (collectively, “forward-looking
statements”) which include, without limitation, the
development of the Project and the anticipated timing thereof,
expected production from, and the further potential of the
production from, the Project, the receipt of all necessary
approvals and consents to commence production at the Property, the
use of debt financing in connection with the Project, and the
achievement of financial KPIs in respect of the Project described
in the Study and the Technical Report.
Known and unknown risks, uncertainties and other
factors, many of which are beyond the Company’s ability to predict
or control, could cause actual results to differ materially from
those contained in the forward-looking statements if such risks,
uncertainties or factors materialize. In addition, the results from
the Study are also based on assumptions, including assumptions from
the Technical Report, which may include assumptions on indicated
mineral resources, measured mineral resources, probable mineral
reserves and/or proven mineral reserves, which could also cause
actual results to differ materially from those contained in the
forward-looking statements if such assumptions prove wrong.
Specific reference is made to the most recent Annual Information
Form on file with certain Canadian provincial securities regulatory
authorities and the Technical Report for a discussion of some of
the factors underlying forward-looking statements, which include,
without limitation the ability of the Company to achieve its
longer-term outlook and the anticipated timing and results thereof,
the ability to lower costs and increase production, the ability of
the Company to successfully achieve business objectives, copper and
gold or certain other commodity price volatility, changes in debt
and equity markets, the uncertainties involved in interpreting
geological data, increases in costs, environmental compliance and
changes in environmental legislation and regulation, interest rate
and exchange rate fluctuations, general economic conditions and
other risks involved in the mineral exploration and development
industry. Readers are cautioned that the foregoing list of factors
is not exhaustive of the factors that may affect the
forward-looking statements.
Risks relating to Mineral Resource and
Mineral Reserve Estimates
The figures for mineral resources and reserves
contained herein are estimates only and no assurance can be given
that the anticipated tonnages and grades will be achieved, that the
indicated level of recovery will be realized or that the mineral
resources and reserves could be mined or processed profitably.
Actual reserves, if any, may not conform to geological,
metallurgical or other expectations, and the volume and grade of
ore recovered may be below the estimated levels. There are numerous
uncertainties inherent in estimating mineral resources and
reserves, including many factors beyond the Company’s control. Such
estimation is a subjective process, and the accuracy of any reserve
or resource estimate is a function of the quantity and quality of
available data and of the assumptions made and judgments used in
engineering and geological interpretation. Short-term operating
factors relating to the mineral resources and reserves, such as the
need for orderly development of the ore bodies or the processing of
new or different ore grades, may cause the mining operation to be
unprofitable in any particular accounting period. In addition,
there can be no assurance that metal recoveries in small scale
laboratory tests will be duplicated in larger scale tests under
on-site conditions or during production. Lower market prices,
increased production costs, the presence of deleterious elements,
reduced recovery rates and other factors may result in revision of
its resource and reserve estimates from time to time or may render
the Company’s resources and reserves uneconomic to exploit.
Resource and reserve data is not indicative of future results of
operations. If the Company’s actual mineral resources and reserves
are less than current estimates or if the Company fails to develop
its resource base through the realization of identified mineralized
potential, its results of operations or financial condition may be
materially and adversely affected.
All forward-looking statements herein are
qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information
or future events or otherwise, except as may be required by law. If
the Company does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements.
About Aura 360° Mining
Aura is focused on mining in complete terms –
thinking holistically about how its business impacts and benefits
every one of our stakeholders: our company, our shareholders, our
employees, and the countries and communities we serve. Our mission
is to find, mine and deliver the planet’s most important and
essential minerals that enable the world and humankind to create,
innovate, and prosper and our vision is to be one of the most
trusted, responsible, well respected and results driven mining
companies. We call this 360° Mining.
Aura is a mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. The Company’s producing assets
include the San Andres gold mine in Honduras, the Ernesto/Pau-a
-Pique gold mine in Brazil, the Aranzazu copper-gold-silver mine in
Mexico and one pre-operational gold mine in the United States, Gold
Road. In addition, the Company has two additional gold projects in
Brazil, Almas and Matupá, and one gold project in Colombia, Tolda
Fria.
For further information, please visit Aura’s website at
www.auraminerals.com or contact:
Rodrigo BarbosaPresident & CEO305-239-9332
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