Aura Minerals, Inc. (“
Aura Minerals” or the
“
Company”) announces today that the Company has
filed its unaudited interim consolidated financial statements for
the quarter ended June 30, 2021, related management discussion and
analysis and CEO and CFO Certificates.
In addition, the Company announces that it is
also updating its gold equivalent production, cash cost per gold
equivalent ounce (“GEO”) produced and capital expenditure (capex)
guidance for 2021, further details on which can be found in its
second quarter 2021 Management Discussion and Analysis.
Rodrigo Barbosa, President & CEO, comments:
“We are glad to inform the market that we are updating our
production guidance at the higher end of our initial projection. It
is the result of a consistent and stable production from our gold
and copper assets across our multiple jurisdictions.”
The Company expects improvements at its operations in the second
half of 2021, as indicated below:
-
EPP: the Ernesto pit is expected to be the main source of ore feed
for the second half of 2021 and until 2022, with an increase in the
average grade compared to the first half of 2021. The Japones pit
will also be an important source of production for the rest of 2021
and, together with the Lavrinha and Nosde pits, it is expected to
provide flexibility in the production at EPP with four operational
pits.
-
San Andres: Interruptions in the operations in July 2021 will have
a negative impact on the projected production for the year,
although the impact is expected to be limited. Esperanza is
expected to remain the main source of ore for the rest of 2021.
Improvements are expected to reduce leaching cycle in the plant and
reduce average distances in the mine, increasing efficiency.
-
Aranzazu: Over the first half of 2021, the implementation of
improvements in the milling and flotation circuit increased
throughput, with production reaching close to 100,000 tons on
average per month during the second quarter. Higher production
capacity throughout the entire second half of the year, combined
with more favorable copper prices, is expected to have a positive
impact on production and cash costs for the rest of 2021.
-
Gold Road: The mine faced several challenges in the first half of
2021, including high employee turn-over, maintenance issues and
other typical ramp-up challenges, all of which had a negative
impact on production and cash costs when compared to the Company’s
expectation. Aura expects Gold Road to be more stable in the second
half of 2021 and to benefit from cost reduction initiatives and
will focus on continuing increasing its geological knowledge of the
mine.
The comparison of the new guidance with the
Company’s previous guidance is detailed below.
The table below details the Company’s updated
GEO production guidance for 2021 by business unit:
https://www.globenewswire.com/NewsRoom/AttachmentNg/08d1dc4a-cbd1-4d0d-b4e9-48a2f793616f
For the updated GEO calculation for Aranzazu,
the Company used realized metal prices for the January to June 2021
period and the following assumptions, based on market projection,
on metal prices for July to December 2021 period: gold:
US$1,801/ounce; silver: US$26.11/ounce; copper: US$4.22/pound.
The table below shows the Company’s updated
guidance on its estimated cash costs1 per equivalent ounce of gold
for 2021 by Business Unit:
https://www.globenewswire.com/NewsRoom/AttachmentNg/c64d7f9e-56b1-44e5-8f3f-d91c29be80c8
Capex:The table below shows the
breakdown of estimated capital expenditures by type of investment
for the updated guidance:
|
Capex (US$ million) - 2021 |
|
Updated |
Previous |
Sustaining |
45 - 50 |
45 - 50 |
Exploration |
9 - 11 |
6 - 8 |
New projects + Expansion |
28 - 30 |
42 - 46 |
Total |
82 - 91 |
93 - 104 |
-
The decrease of the Expansion Capex is mainly due to delays in the
start date of construction of Almas.
-
The increase in Exploration Capex is due to the shift from
Exploration Expenses to Exploration Capex, as explained below.
Aura believes its properties have strong
geological potential and management’s objective is to expand the
life of mine across its business units. Therefore, in 2021, Aura
plans to invest a total of US$24 million to US$28 million
(previously: US$ 24 million to US$ 28 million) which includes:
-
US$ 9 million to US$ 11 million (previously: US$ 6 million to US$ 8
million) in capital expenditures (included in the table above);
and,
-
US$15 million to US$ 17 million (previously: US$ 18 million to US$
20 million) in exploration expenses, not capitalized (not included
in the table above).
As noted above, the Company has kept its total
exploration guidance unchanged compared to the previous indication
but will capitalize more expenses than previously expected. The
reason is that the Company has increased its knowledge of its
mineral resources and has shifted efforts to near mine exploration
in some of its properties.
Key Assumptions and Factors Underlying
Guidance
-
The Company’s future profitability, operating cash flows, and
financial position will be closely related to the prevailing prices
of gold and copper. Key factors influencing the price of gold and
copper include, but are not limited to, the supply of and demand
for gold and copper, the relative strength of currencies
(particularly the United States dollar), and macroeconomic factors
such as current and future expectations for inflation and interest
rates. Management believes that the short-to-medium term economic
environment is likely to remain relatively supportive for commodity
prices but with continued volatility.
-
To decrease risks associated with commodity prices and currency
volatility, the Company will continue to evaluate and, if deemed
appropriate, implement available protection instruments against
commodity and currency markets uncertainty. For additional
information on this, please refer to the AIF.
-
Other key factors influencing profitability and operating cash
flows are production levels (impacted by grades, ore quantities,
process recoveries, labor, country stability, plant, and equipment
availabilities), production and processing costs (impacted by
production levels, prices, and usage of key consumables, labor,
inflation, and exchange rates), among other factors.
Technical Disclosure
Reference should be made to the following technical reports for
further details and assumptions with respect to certain of the
properties described herein:
- the
technical report with an effective date of January 31, 2018,
entitled “Feasibility Study of the Re-Opening of the Aranzazú Mine,
Zacatecas, Mexico,” prepared for Aura Minerals by F. Ghazanfari,
P.Geo. (Farshid Ghazanfari Consulting), A. Wheeler, C.Eng.
(Independent Mining Consultant), C. Connors, RM-SME (Aura Minerals
Inc.), B. Dowdell, C.Eng. (Dowdell Mining Limited), P. Cicchini
P.E. (Call & Nicholas, Inc.), G. Holmes, P.Eng. (Jacobs
Engineering), B. Byler, P.E. (Wood Environment and Infrastructure
Solutions), C. Scott, P.Eng. (SRK Canada), D. Lister, P.Eng.
(Altura Environmental Consulting), F. Cornejo, P.Eng. (Aura
Minerals Inc), available under the Company’s SEDAR profile;
- the
technical report dated July 2, 2014, with an effective date of
December 31, 2013, entitled “Mineral Resource and Mineral Reserve
Estimates on the San Andrés Mine in the Municipality of La Union,
in the Department of Copan, Honduras” prepared for Aura Minerals by
Bruce Butcher, P.Eng.,former Vice President, Technical Services,
Ben Bartlett, FAusiMM, former Manager Mineral Resources and Persio
Rosario, P. Eng., former Principal Metallurgist, available under
the Company’s SEDAR profile;
- the
technical report dated January 13, 2017, with an effective date of
July 31, 2016, entitled “Feasibility Study and Technical Report on
the EPP Project, Mato Grosso, Brazil” prepared for Aura Minerals by
a group of third-party consultants, including P&E Mining
Consultants Inc., MCB Brazil and Knight Piesold Ltd., available
under the Company’s SEDAR profile; and,
- the
technical report dated May 3, 2018, titled “NI 43-101 Technical
Report, Preliminary Economic Assessment of the Gold Road Mine,
Arizona, USA” prepared for Soma Gold Corp. (formerly Para Resources
Inc., the vendor of the Gold Road Project) by RPM Global, available
under Soma’s Gold Corp.’s SEDAR profile.
Non-IFRS Financial Measures
The Company has included certain non-IFRS
financial measures in this news release which are not recognized
under IFRS and do not have a standardized meaning prescribed by
IFRS. Further details on non-IFRS financial measures are provided
in the Company’s Management’s Discussion and Analysis accompanying
its financial statements filed from time to time on SEDAR at
www.sedar.com and at the Company’s website
(ir.auraminerals.com).
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements”, as defined in
applicable securities laws (collectively, “forward-looking
statements”) which include, without limitation, expected production
from, and the further potential of the Company’s properties, and
the ability of the Company to achieve its short-term outlook and
the anticipated timing and results thereof, future production
across the business units of the Company, cash cost of operation
per ounce of gold equivalent produced and capital expenditures.
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 if such risks,
uncertainties or factors materialize. 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. Specific reference is made to 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 the ability of the Company to achieve
its short-term outlook and the anticipated timing and results
thereof, the ability to lower costs and increase production, the
ability of the Company to successfully achieve business objectives,
copper and gold 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.
About Aura 360° Mining
Aura is focused on mining in complete terms –
thinking holistically about how its business impacts and benefits
every one of our stakeholders: our company, our shareholders, our
employees, and the countries and communities we serve. We call this
360° Mining.
Aura is a mid-tier gold and copper production
company focused on the development and operation of gold and base
metal projects in the Americas. The Company’s producing assets
include the San Andres gold mine in Honduras, the Ernesto/Pau-a
-Pique gold mine in Brazil, the Aranzazu copper-gold-silver mine in
Mexico and the Gold Road mine in the United States. In addition,
the Company has two additional gold projects in Brazil, Almas and
Matupá, and one gold project in Colombia, Tolda Fria.
For further information, please visit Aura’s website at
www.auraminerals.com or contact:
Rodrigo Barbosa
President
&
CEO 305-239-9332
__________________________________________1 Cash operating cost
per ounce produced is a non-GAAP performance measure that does not
have a IFRS standardized meaning. For more information please refer
to the section entitled “Non-GAAP Performance Measures” in the
Company’s Management’s Discussion and Analysis.
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