- Antilles Gold (AAU) expects annual profits of $35 million over a six year life of mine from its La Demajagua joint venture open pit gold-silver mine in Cuba
- Following the release of the financial results from the project scoping study, AAU’s equity contribution is $18 million, with $221.4 million in life of mine cash surplus
- The joint venture plans to apply part of the cash surplus to fund future developments, and achieve organic growth while minimising future equity contributions
- Company shares were trading 7.5 per cent higher at 8.6 cents
Antilles Gold (AAU) is expecting to see annual profits of $35 million over a six year life of mine from its La Demajagua joint venture open pit gold-silver mine in Cuba.
Through a joint venture with the Cuban Government’s mining company, GeoMinera SA, the mine is expected to be developed in the near term with the objective of producing a bulk gold and silver concentrate for sale to trading companies or foreign smelters.
The joint venture partner is aiming to achieve organic growth through the successive development of a series of mines based on previously explored gold and copper-gold deposits, to establish itself as a substantial mining company in the country.
NSW-based Antilles has a 49 per cent stake in the mine and with the release of the financial results from the scoping study of the project, expects an “excellent” return on its relatively low equity contribution to the project.
The mine is planned to be developed in two stages, costing roughly $104.2 million, with the open pit mine operating for six years, followed by underground mining for approximately ten years.
Over the life of mine, AAU’s equity contribution is $18 million, with average annual profits of $35 million and $221.4 million in life of mine cash surplus.
It has a life of mine production target of 4.87 million tonnes, with anticipated ore grades of 3.26 grams per tonne gold and 41.5 g/t silver.
According to Antilles Executive Chairman Brian Johnson, the returns from the project are anticipated to increase with cash flow from the underground operations.
“The results also indicate that the joint venture company’s first project could become the catalyst for realisation of its aim of developing a series of mines in order to progressively establish itself as a substantial mining company in Cuba,” he said.
“The joint venture’s objective is to apply part of the surplus cash generated by the La Demajagua project to fund future developments, and in doing so achieve organic growth while minimising future equity contributions.”
The joint venture parters plan to undertake a series of geophysical surveys and drilling programs on previously explored deposits and Mr Johnson said shareholders can look forward to exciting news this year as this work progresses.
Company shares were trading 7.5 per cent higher at 8.6 cents at 1:19pm AEDT.