Cuban mining specialist Antilles Gold Limited (ASX: AAU) has achieved an approximately 30% to 905,000 oz Au Equivalent in an upgraded Mineral Resource Estimate (MRE) for the proposed La Demajagua open pit mine.
The MRE was calculated from results from 29,000m of cored drilling undertaken by joint venture company, Minera La Victoria SA, and selective results from ~50,000m of historic drilling, and revised after the receipt of additional antimony assays.
Following receipt of the revised MRE, the final mine plan can now be established, and incorporated in the Definitive Feasibility Study (DFS) for the first stage of the La Demajagua project.
Highlights
- The DFS for the open pit mine has been delayed while waiting on additional antimony assays and should now be completed within three months.
- Metallurgical test work aimed at optimising recoveries and metal grades is nearing completion for the two products to be produced, a gold arsenopyrite concentrate, and a gold, silver, antimony concentrate.
- Recoveries and grades to date indicate that at metal prices offered by buyers interested in concentrate off-take, revenue will be in excess of the US$100 million per year forecast in the Revised Scoping Study results advised to ASX on 30 March 2023.
- The Revised Scoping Study indicated that Antilles Gold’s estimated share of surplus cash generated by the proposed mine would average approximately A$45 million per year at a gold price of US$1,800 per oz, and current exchange rates, and the Life of Mine could now be extended from 9 to 11 years based on the increased MRE.
- This would be an excellent return for the Company which is only committed to investing A$20 million (US$13.5 million) of equity for its 50% share of the joint venture company developing the La Demajagua open pit mine.
- The company will have invested A$15 million for shares in the joint venture for expenditure on pre-development activities by the time the DFS is completed.
- The A$5 million balance will be expended on mine infrastructure in Q1 and Q2 2024, subject to project financing being finalised.
- Negotiations have commenced on two potential sources of project funding;
- advance payments for concentrate
- deferred payments to Chinese suppliers of plant and equipment, backed by guarantees from the China Ex-Im Bank
- The joint venture’s aim is to commence the construction of mine infrastructure in February 2024, and commission the mine in mid July 2025.