Antilles Gold Limited (ASX: AAU) is pleased to announce encouraging results from the updated scoping study for the Nueva Sabana gold-copper mine in Cuba. Conducted by the 50% owned Cuban joint venture company, Minera La Victoria SA (MLV), this study underscores the potential for substantial economic returns and extended mine life through further exploration and development.
Study Details and Initial Findings
The updated scoping study for the Nueva Sabana mine, which is positioned to become a cornerstone project for Antilles Gold, proposes a mining operation with a depth of 100 meters and an initial life of 4.8 years based on an annual ore processing rate of 500,000 tons. The study predicts that the mine will initially produce a high-grade gold concentrate followed by a copper-gold blend, providing significant revenue streams for the company.
Financial Projections and Strategic Initiatives
According to the study, the project shows a robust financial outlook with estimated operating profits of approximately US$60 million from the first 22 months of production alone. This profit is expected to facilitate the swift repayment of around US$28.5 million in project-related debt. The detailed financial analysis projects compelling figures:
- The concession acquisition and pre-development phases entail modest initial investments while the mine development costs are projected at US$28.5 million.
- The life of mine operating costs are anticipated to be around US$110.1 million with total sales forecasted at US$237.2 million.
- The net profit for the life of the mine, after tax exemptions, is expected to reach approximately US$105.5 million, generating a surplus cash flow of US$96.6 million.
- The net present value (NPV) as of 1 January 2025 is calculated at US$72.3 million with an impressive internal rate of return (IRR) of 63.2%.
Expansion and Future Exploration
MLV plans to extend the mining depth beyond the initial 100 meters to explore the underlying copper mineralization, potentially extending the mine's operational life. The joint venture also intends to investigate additional oxide gold-copper targets in the surrounding area, which could further enhance the project's resource base and profitability.
Leadership Commentary
Brian Johnson, Chairman of Antilles Gold, expressed optimism about the project's prospects, highlighting the strategic moves to secure financing for construction and finalize concentrate off-take agreements. "The initial stages of the Nueva Sabana project showcase not only a robust internal rate of return but also significant potential for rapid cash flow generation," Johnson stated.
Looking Ahead
Antilles Gold views the Nueva Sabana project as an integral part of its strategy to diversify and enhance its mining portfolio. The company is also focused on developing its flagship La Demajagua mine, which promises further growth and value addition. As the joint venture approaches the completion of its financial commitments, Antilles Gold anticipates a reduction in cash burn and a strengthened financial position.
This scoping study marks a pivotal moment for Antilles Gold, offering a glimpse into the future possibilities for the Nueva Sabana mine and its impact on the company's growth trajectory.
