The PEA, prepared by
- Expansion of the current 2,600 tpd operation to 4,000 tpd by
- Expanded operation, with roaster capability, has NPV of
$200 million, a $145 millionimprovement over current operation;
- Capital requirement of
$107 millionto be funded with internally generated cash flows including $65 millionfrom Aranzazu operations;
- Partial roasting selected as the long-term solution to decrease arsenic levels with commissioning of the roaster to coincide with the expansion;
- Ore-body remains open along strike and at depth allowing further future expansion;
- Feasibility study and long lead time engineering and procurement to commence immediately.
|4,000 tpd||5,600 tpd|
|Mine life||25 years||18 years||13 years|
|Metal production,annual average|
|Cash flow from operations, annual average||$12.5 million||$37 million||$55 million|
|Cash cost per pound of payable Cu, net of credits||$1.90||$1.15||$1.09|
|Capital investment 2012-2014||$62 million||$107 million||$124 million|
|Incremental capital versus the base case||–||$45 million||$62 million|
|NPV at 8% discount, after tax||$55 million||$200 million||$219 million|
|Incremental NPV versus the base case||–||$145 million||$164 million|
|Internal rate of return, after-tax||–||71%||63%|
|Note:Economic results are based on analyst consensus pricing for copper, gold and silver. These forecasts include higher near term pricing followed by a gradual decrease to long term expectations of $2.70/lb, $1,216/oz and $21/oz, respectively. All dollar figures are in US$.|
The PEA is preliminary in nature. It includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.
The roaster, with an approximate cost of
The expansion to 4,000 tpd will require modifications to our current plant and a progressive ramp up in our underground development. We expect these investments will require 2.5 years to complete thus enabling achievement of the expanded throughput levels by
The PEA demonstrated that an expansion to 5,600 tpd provides the greatest net present value however the 4,000 tpd case has greater synergies with our current plant configuration thus providing a more efficient stepping stone for an even larger expansion phase in the future which would require a newer, larger plant. The 4,000 tpd case features minimal investment in plant capital that would have a very short useful life in the case of a larger expansion. A larger expansion beyond 5,600 tpd would require longer term activities such as additional exploration drilling (the deposit is still open on strike and at depth), new land acquisition for a potential new plant site, new environmental permits and significantly more capital expenditure.
Based on the positive results of the PEA, the next step is to commence the feasibility study and advance engineering for the expanded
Summary Project Description
The PEA is based on the Measured, Indicated and Inferred mineral resources as of
|Measured and Indicated||0.8||17,770||1.50||588,738||0.68||390||17.98||10,272|
|* Based on 0.8% copper cut-off grade. Numbers may not add due to rounding. For additional information on the mineral resource estimate, please see the National Instrument 43-101 (“NI 43-101”) compliant technical report dated November 30, 2011 entitled “NI 43-101 Technical Report and Resource Estimate on the Aranzazu Property, Zacatecas State, Mexico” prepared for Aura Minerals by William J. Lewis, B.Sc., P.Geo. of Micon International Limited, a copy of which may be found on the Company’s profile on SEDAR at http://www.sedar.com/.|
Expanding to 4,000 tpd will require approximately
|Pastefill plant & thickeners||16|
|Tailings pond and other surface capital||7|
|Total capital investment 2013 and 2014||$107|
The underground mine has been designed to facilitate the extraction of 4,000 tpd through the application of transverse long hole open stoping, a low-cost bulk mining technique suitable for the significant mineralized mining width and strong continuity of Aranzazu resources.
An extensive underground development program that attains 700 m/month of advance is required to develop and maintain access to adequate resources to sustain 4,000 tpd of production. Underground project infrastructure will include ventilation shafts and fans, a centralized pumping station, a modern maintenance facility, electrical substations, fueling facility and other ancillary installations.
Material handling from the underground workings to the concentrator will be accomplished by a modern fleet of haulage trucks via an extensive ramp system connected to two existing surface portals. Primary crushing will continue to be performed on surface.
The planned underground infrastructure and mining method would equally support a potential increase in production beyond 4,000 tpd with an incremental investment in fixed plant and mobile equipment.
Various arsenic treatment routes were considered including differential flotation, alkaline sulphide leaching and partial roasting. The partial roasting alternative was selected on the basis of it having a lower operating cost for similar capital costs and also as being well-proven technology with a high degree of process certainty. The preliminary design is based on commercial scale operations modified to capture arsenic in a wet scrubber and stabilize it as insoluble ferric arsenate for environmentally secure disposal off site in an approved hazardous waste facility. For the PEA, a worst case scenario was assumed where offsite transport and storage of this ferric arsenate product was included in the operating costs. Subject to testing and permitting, there may be opportunities in the future to dispose of this material underground by mixing it with the cemented paste backfill. These opportunities will save approximately
The expansion of the processing plant to 4,000 tpd capacity will consist of an additional 9′ x 16′ primary ball mill and two 50m3 tank flotation cells. This will provide not only sufficient additional rougher flotation capacity but also to allow for reconfiguration of the cleaner circuit to further optimize final concentrate quality. Additional crushing capacity will be achieved by more fully utilizing the available runtime of the existing equipment so the expansion to 4,000 tpd is capital efficient. The installation of the additional equipment can also be carried out with minimal disruption to current production.
A new tailings thickener and the paste backfill plant will also improve the recovery of water from tailings to the extent that the existing fresh water supply system does not require any capacity upgrade. Several tailings disposal options were evaluated. The existing tailings storage facility offers short-term capacity, while the majority of the tailings from the expanded production scenario will be stored in a new facility to be developed to the east of the current operation.
The Company’s current estimate of arsenic in the final concentrate is approximately 1.6% over the life of mine based on our current plant configuration. We are in the process of further refinements to this estimate.
Our near term plan, 2012 through 2014, is to mitigate arsenic levels and penalties by:
- Optimizing our mix of ore feed to the plant with the aim of producing a low arsenic and high arsenic product as opposed to one homogenous product, which would enhance the economic value of the concentrate above what is assumed in this PEA;
- Continuing metallurgical test work on differential flotation to optimize copper recoveries while suppressing arsenic;
- Continuing to work with concentrate off takers to optimize net smelter returns;
- Ore control procedures will use recently purchased underground equipment to optimize short term grade control variability.
Our long term plan, 2015 and beyond, is to implement partial roasting which will effectively eliminate arsenic from our concentrates. Partial roasting is a well known technology with several operations around the world which reduces arsenic in the concentrate in a safe, efficient and environmentally friendly manner.
The PEA was prepared under the direction of AMC by leading independent industry professionals, all Qualified Persons under NI-43-101. The Qualified Person for
The NI 43-101 compliant technical report supporting the PEA, including a description of the Project resources, mine plan, metallurgy, capital costs, operating costs and financial analysis will be filed with the appropriate regulatory authorities within 45 calendar days of the date of this news release.
The Aranzazu mine is located within the Municipality of Concepción
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The PEA should not be considered to be a pre-feasibility or feasibility study, as the economics and technical viability of the expansion of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes inferred mineral resources that are considered too geologically speculative at this time to have the economic considerations applied to them to be categorized as mineral reserves. There is no certainty that the production profile concluded in the PEA will be realized. Actual results may vary, perhaps materially.
Some statements contained in this news release are forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, including, without limitation, expansion at the Project and a reduction in arsenic levels, mine life and potential value, are forward-looking statements. These statements generally are identified by words such as “believes”, “expects”, “may”, “will”, “should”, “anticipate” and similar language, or convey estimates and statements that describe the Company’s future plans, objectives or goals. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties, many of which are beyond the Company’s ability to control or predict. Factors that could cause actual results or events to differ materially from current expectations include, without limitation, failure to establish estimated mineral resources, the failure to meet estimated production levels, the failure to realize expected margins and valuations, including cash flow forecasts and projected capital and operating costs, changes in world copper, gold and silver prices and other risks discussed in the section entitled “Risk Factors” in the Company’s Annual Information Form. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company does not undertake to update any forward-looking statement that may be made from time to time except in accordance with applicable securities laws.
Aura Minerals Inc.
Contact Title: President & Chief Executive Officer
Phone: (604) 669-4777
Fax: (604) 696-0212 (FAX)
Other1: [email protected]