Antilles Gold's Nueva Sabana Mine: Updated Scoping Study Results
ANTILLES GOLD LIMITED (AAU) Share Update November 2024 Wednesday 13th
Antilles Gold Announces Positive Results from Nueva Sabana Mine Study
Antilles Gold Limited has released the results of an updated scoping study for the Nueva Sabana gold-copper mine in Cuba, showing promising potential for the project's first stage.
Instant Summary:
- Initial mine life of 4.8 years with a mining rate of 500,000tpa.
- Potential for increased project life and NPV with further exploration.
- Expected operating profit of ~US$60M in the first 22 months.
- Off-take agreement negotiations underway with a major commodity trader.
- High IRR of 63.2% and an NPV of US$72.3M at current metal prices.
Project Overview
The Nueva Sabana mine, located in Cuba, is a joint venture between Antilles Gold Limited and the Cuban state-owned company, GeoMinera SA. The updated scoping study, conducted by Minera La Victoria SA, outlines a pit limited to 100m depth, with a mining rate of 500,000 tonnes per annum, resulting in an initial mine life of 4.8 years.
The study indicates that with additional exploration and increased mining depth, the project's life and net present value (NPV) could be significantly enhanced. The mine will initially produce a gold concentrate grading approximately 57.5g/t Au for 18 months, transitioning to a blended copper-gold concentrate.
Financial Projections
Financial analysis for the first stage of the mine estimates an operating profit of approximately US$60 million from the first 22 months of production, sufficient to repay the US$28.5 million project debt. The life of mine (LoM) sales are projected at US$237.2 million, with a net profit of US$105.5 million, benefiting from waived taxation.
Strategic Developments
Negotiations are underway for an off-take agreement with a major international commodity trader, which is expected to include provisions for advanced payments to assist with construction costs. The project also holds potential for expansion, with plans to drill additional copper-gold targets and consider doubling the mining rate to 1.0Mtpa.
The positive results from the scoping study are likely to boost investor confidence in Antilles Gold, potentially leading to an increase in stock value. The high internal rate of return and substantial NPV compared to the company's current market capitalization suggest significant upside potential.
Investor Reaction:
Analysts are optimistic about the project's potential, noting the favorable IRR and NPV. The ongoing negotiations for an off-take agreement are seen as a positive step towards securing project financing.
Conclusion:
Investors should keep an eye on the finalization of the off-take agreement and further exploration results, which could enhance the project's value. Antilles Gold's strategic focus on expanding the Nueva Sabana mine could unlock substantial shareholder value.