Aura Minerals Inc. ("Aura Minerals" or the "Company") (TSX:ORA)
announces an update on the mine and plant expansion at its
wholly-owned Aranzazu copper project ("Aranzazu") in Zacatecas
State, Mexico. All amounts are presented in United States dollars
unless otherwise noted.
On July 18, 2012, the Company released the results of the
Preliminary Economic Assessment ("PEA") for Aranzazu, prepared by
AMC Mining Consultants (Canada) Ltd. ("AMC"). The PEA evaluated a
feed rate expansion at Aranzazu from the current 2,600 tonnes per
day ("tpd") to 4,000 tpd and 5,600 tpd, and recommended an
expansion to 4,000 tpd which it determined would result in a net
present value of $200 million to enable the Company to take the
project forward. The PEA also included an expected capital
requirement of $107 million for the expansion which included
installation and commissioning of an arsenic control facility using
partial roasting technology (the "roaster") as the selected
long-term solution to decrease arsenic levels to coincide with the
expansion.
The Company announces the following updates to the Aranzazu mine
and mill expansion:
-- Basic engineering (65% completed to date) now fixes the feed rate
expansion of 4,500 tpd and anticipates completion of the expansion by
the second quarter of 2015. The engineering is expected to be completed
in August 2013 and includes the design for an upgrade to the fresh water
system, a redesign of the coarse ore stockpile feeders and a high
capacity tailings thickener to improve water recovery;
-- The expanded operation, with roaster capability, expected to have a
remaining life of 16 years and estimated life-of-mine cash costs per
payable pound of copper of $1.15 to $1.25;
-- The Company expects the estimated capital requirement of $113 million
(including a contingency of $12 million) is expected to be funded by a
combination of internally generated cash flows and external financing
and which is allocated amongst the following phases;
-- $41 million for mine development, which enables access to higher
grade ores and the phasing out of the open pit activities during
2014, and increases production to approximately 25 million pounds
per year;
-- $33 million for the roaster, which is expected to result in
substantially reduced arsenic-related treatment and refining charges
and penalties; and
-- $39 million for plant expansion (additional mill, paste-fill plant
and thickeners) which is expected to increase production to an
expected 35 million pounds of copper per year;
-- The roaster was selected and the purchase contract awarded in February
2013 with an estimated 46 week delivery time. The roaster is expected to
be operational in the second quarter of 2014; and
-- The deposit continues to remain open at depth and on strike therefore
allowing potential for further future expansion.
Jim Bannantine, the Company's President and Chief Executive
Officer stated: "Since the publication of the Preliminary Economic
Assessment, Aura Minerals has made excellent progress on the
engineering and procurement for Aranzazu's roaster and plant
expansion and has advanced underground mine development and
expansion. Current priorities include procurement, installation and
commissioning of the roaster over the remainder of this year and
early next year and continued day by day development and expansion
of underground mining. Engineering and subsequent procurement for
the plant expansion are expected to allow for installation of
additional equipment late next year after the underground mine
expansion reaches capacity to feed the expanded plant and the
roaster is up and running.
The Company expects each of these project elements, individually
and as a group, are expected to result in substantial reductions to
the cash costs per payable pound of copper over the life of the
project and therefore contribute to realizing a value of the
Aranzazu asset greater than that stated in the PEA because of the
increase in capacity from 4,000 to 4,500 tpd."
Additional Project Commentary
Mineral Resource:
The measured, indicated and inferred mineral resources as of
September 30, 2011, and included in the PEA, have not been
updated.
Mining:
The underground mine has been designed to facilitate the
extraction of 4,500 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. Paste backfill is integral to the project to
maximize both resource recovery and mining productivity. Modern
trackless mobile equipment will be used for the majority of mining
activities.
An extensive underground development program that attains a
minimum of 700 meters per month of advance is being executed to
develop and maintain access to adequate resources to sustain 4,500
tpd of production. Underground project infrastructure 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 is 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 Company expects the planned underground infrastructure and
mining method support a potential increase in production to 4,500
tpd and the incremental investment in fixed plant and mobile
equipment has been included in the capital expenditure schedule
above. It is expected that the economy of scale realized by the
expansion of the mine and processing plant will yield a decrease in
the cash cost per payable pound of copper produced of between $0.75
and $1.00 per pound of payable copper.
Processing:
The expansion of the processing plant to 4,500 tpd capacity will
include an additional 13' x 18' primary ball mill and two 130 m3
and eight 5 m3 tank flotation cells. This will provide not only
sufficient additional rougher flotation capacity but also allow for
the total 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 4,500 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 is also
expected to improve the recovery of water from tailings. 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. It is anticipated that 40% of
tailings will be delivered to the underground mine as paste
backfill.
Roaster:
Arsenic reduction in the copper concentrate will be achieved
using partial roasting technology. The roaster was selected and the
contract awarded to Technip on February 26, 2013 with an expected
46 week delivery period. Pilot tests conducted using high arsenic
content concentrate from Aranzazu showed a decrease of arsenic
content by 85%. The expected arsenic content in the treated
concentrate once the roaster has been commissioned is 0.3% and the
roaster package includes a performance guarantee of a maximum of
0.5%. It is expected that the roaster will decrease arsenic related
charges and penalties by up to $1.00 per payable pound of copper
produced. The roaster has been presented to SEMARNAT, the Mexican
Environmental Authority, and SEMARNAT has authorized the roaster as
a modification to the existing operating license.
About the Aranzazu Mine
The Aranzazu mine is located within the Municipality of
Concepcion del Oro in the north eastern region of the State of
Zacatecas, Mexico, and covers approximately 11,380 hectares,
including the historical, past producing El Cobre area. The
property can be accessed by paved highway from both the city of
Zacatecas located 250 kilometres to the southwest and from the city
of Saltillo located 112 kilometres to the northeast. Both Zacatecas
and Saltillo are serviced by daily domestic and international
flights.
National Instrument 43-101 Compliance
Unless otherwise indicated, Aura Minerals has prepared the
technical information in this press release ("Technical
Information") based on information contained in the PEA technical
report titled "Preliminary Economic Assessment of the Expansion of
the Aranzazu Mine, Zacatecas, Mexico" dated August 31, 2012 and the
Company's news release dated July 18, 2012 (collectively the
"Disclosure Documents") available under the Company's profile on
SEDAR at www.sedar.com. Each Disclosure Document was prepared by or
under the supervision of a qualified person (a "Qualified Person")
as defined in National Instrument 43-101 Standards of Disclosure
for Mineral Projects. Readers are encouraged to review the full
text of the Disclosure Documents which qualifies the Technical
Information. The Disclosure Documents are each intended to be read
as a whole, and sections should not be read or relied upon out of
context. The Technical Information is subject to the assumptions
and qualifications contained in the Disclosure Documents.
The PEA was prepared under the direction of AMC by independent
industry professionals, all Qualified Persons under NI 43-101. The
Qualified Person for Aura Minerals is Bruce Butcher, P. Eng., Vice
President, Technical Services, who has reviewed and approved this
press release. The updates in this press release do not materially
change the overall results or conclusions of the PEA.
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.
Cautionary Note
This news release contains certain "forward-looking information"
and "forward-looking statements", as defined in applicable
securities laws (collectively, "forward-looking statements"). All
statements other than statements of historical fact are
forward-looking statements. Forward-looking statements relate to
future events or future performance and reflect the Company's
current estimates, predictions, expectations or beliefs regarding
future events and include, without limitation, statements with
respect to: the planned Aranzazu mine and mill expansion, including
the cost, timing and results thereof; projected mine performance
and economics; project internal cash flows; external financing; the
amount of mineral reserves and mineral resources; the amount of
future production over any period; the amount of waste tonnes
mined; the amount of mining and haulage costs; cash costs;
operating costs; strip ratios and mining rates; expected grades and
ounces of metals and minerals; expected processing recoveries;
expected time frames; prices of metals and minerals; mine life; and
gold hedge programs. Often, but not always, forward-looking
statements may be identified by the use of words such as "expects",
"anticipates", "plans", "projects", "estimates", "assumes",
"intends", "strategy", "goals", "objectives" or variations thereof
or stating that certain actions, events or results "may", "could",
"would", "might" or "will" be taken, occur or be achieved, or the
negative of any of these terms and similar expressions.
Forward-looking statements are necessarily based upon a number
of estimates and assumptions that, while considered reasonable by
the Company, are inherently subject to significant business,
economic and competitive uncertainties and contingencies.
Forward-looking statements in this news release are based upon,
without limitation, the following estimates and assumptions: the
availability of financing on acceptable terms; the presence of and
continuity of metals at the Company's Mines at modeled grades; the
capacities of various machinery and equipment; the results or
performance of the proposed expansion of Aranzazu, the availability
of personnel, machinery and equipment at estimated prices; exchange
rates; metals and minerals sales prices; appropriate discount
rates; tax rates and royalty rates applicable to the mining
operations; cash costs; anticipated mining losses and dilution;
metals recovery rates, reasonable contingency requirements; and
receipt of regulatory approvals on acceptable terms.
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. Specific reference is
made to the PEA and the most recent Annual Information Form on file
with certain Canadian provincial securities regulatory authorities
for a discussion of some of the factors underlying forward-looking
statements, which include, without limitation, gold and copper 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.
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.
Contacts: Aura Minerals Inc. Alex Penha Vice President,
Corporate Development (416) 509-0583 or (416) 649-1033 (416)
649-1044 (FAX)info@auraminerals.com www.auraminerals.com
Aura Minerals (TSX:ORA)
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