ROAD TOWN, British Virgin Islands, November 8, 2021 — Aura Minerals Inc. (TSX: ORA, B3: AURA33) (“Aura” or the “Company”) is pleased to announce the results of a preliminary economic assessment (the “Matupá PEA”) of the Company’s wholly owned Matupá Gold Project (“Matupá” or the “Project”), in Matupá Municipality, Mato Grosso, Brazil. The Matupá PEA will be filed within 45 days after date of this press release and will be available under the Company’s profile on SEDAR at www.sedar.com.
Based on the PEA, the Project is estimated to require after-tax total capital expenditures of approximately US$94.6 million, a payback period of 2.1 years and to yield an after-tax net present value (“NPV”) of approximately US$86 million, using the weighted average consensus gold prices for the projected period of US$1,552 per ounce and an exchange rate of US$1.00=BRL5.143.
Assuming a gold price of US$1,800 per ounce and 50% leverage, estimated Return on Equity (“Project ROE”) for the Project is 71.1%, and after-tax NPV is estimated approximately US$134.1 million
Over the first three years of the Project, the Company anticipates achieving average annual gold production of more 60,000 ounces and average All-In Sustaining Cost (“AISC”) of US$591.4 per ounceOver the initial estimated seven-year life of mine (“LOM”), annual average gold production is expected to be 42,700 ounces of gold, with an AISC of US$765 per ounce. The Project’s initial estimated LOM is seven years, based on updated mineral resources (including inferred mineral resources) estimated in accordance with National Instrument 43-101 – Standards for Disclosure for Minerals Projects (“NI 43-101”).
Rodrigo Barbosa, CEO of Aura, comments: “Matupá is estimated to have 317,970 ounces of measured & indicated gold mineral resources which we expect to increase in the future with ongoing investments in exploration. Still, the economics of the project at its current size, with a payback period of only 2.1 years and attractive IRR and NPV, already justify initiating construction as soon as possible while we work to expand resources and reserves in the next years, which should improve even further returns and the project’s NPV. Matupá will be an easy to operate open pit mine, in a gold jurisdiction that should be at the 1st quartile cash cost. Our strategy is to start simple and work on the upsides as we generate cash from its operation”
The Matupá Gold Project
Matupá is located in the state of Mato Grosso, Brazil, and consists of the X1, Serrinha and Guarantã Ridge deposits and exploration targets including Target 47, V6 and Alto Alegre. The X1 deposit is well defined in terms of drilling and was the focus of the Matupá PEA. The Matupá PEA also included an updated mineral resource estimate for the X1 deposit.
Matupá is located in the Juruena-Teles Pires Gold Province (south-central portion of the Amazon Craton), specifically in the Peixoto de Azevedo District where many other gold deposits exist. Aura believes further exploration at Matupá presents an opportunity to expand and grow mineral resources and consequently to extend the Project’s LOM. Based this opportunity, the Company increased its mineral rights position from 28,674 hectares to 62,505 hectares (a 118% increase) since the beginning of 2020 and is planning to maintain an aggressive exploration plan that started late in 2021 into 2022 and beyond.
Aura acquired the Project in 2018 as a result of the Company’s merger with Rio Novo Gold Inc. (“Rio Novo”). Since Aura’s acquisition of the Project, Aura has been evaluating several strategies that focus on reducing capital expenditures and strengthening cash flows in the early years of operations, to de-risk the Project and improve returns.
Matupá PEA Highlights
- After Tax NPV (5% discount rate) of approximately US$86 million assuming a price of US$1,552 per ounce of gold.
- Seven-year LOM and total production of approximately 300,000 ounces of gold.
- Gold recovery of 95%.
- LOM annual average production of 42,700 ounces
- Annual production of averaging 60,000 ounces over the first three years.
- Capital expenditures of US$94.6 million, including US$15.8 million contingency.
- Cash operating expenses of US$625 per ounce of gold, including approximately 4% contingency.
- AISC of US$765 per ounce of gold.
- Internal rate of return (“IRR”) of 28.4%.
Financial Key Performance Indicators (“KPIs”) expected for the Project:
Main assumptions – base case:
- Gold price: US$1,552 per ounce.
- Exchange rate US$1.00 = BRL5.143.
- Discount rate: 5%.
Table 1. Matupá Gold Project – Base Case KPIs
|KPIs||Unit||Gold Price (US$ per ounce)|
|After-tax Project Capital Expenditures||US$ million||94.6||94.6||94.6||94.6||94.6|
|After-tax NPV||US$ million||15.6||86.1||114.9||134.1||153.3|
|After-tax simple payback||years||3.0||2.1||1.9||1.8||1.7|
|After-tax IRR||% p.a.||10.0||28.4||34.9||39.0||42.9|
Results above are shown assuming that the project is financed with 100% equity, in compliance with NI 43-101. However, the Company has established a target for leverage at the Project, aiming for debt representing between 30% and 70% of capital expenditures.
The Company has conducted a sensitivity analysis to estimate how different gold prices and capital structures may affect the Project ROE, the results of which are outlined in Table 2:
Table 2. Matupá Gold Project – Sensitivity Analysis
Return on Equity (%)
|Gold Price (US$ per ounce)|
|Debt/Capital Expenditures (%)||0.0%||0||10.0%||21.2%||28.4%||34.9%||39.0%||42.9%||46.7%||50.4%|
Since the acquisition of Matupá by Aura in 2018, the Company has performed the following tasks in order to verify underlying data (limited to the X1 deposit) for purpose of the Matupá PEA:
- Verification of the original or historic data in the current X1 deposit database from drilling by the various project operators previous to Rio Novo ownership of the Project (prior to 2008)
- Reviewing of quality control and verification procedures used by Rio Novo during drilling campaigns (2008-2011)
- Re-surveying all existing drill hole collars in the X1 deposit (2021)
- New topographical surveys (2021)
Data verification of the X1 deposit was done under the supervision of Farshid Ghazanfari, P.Geo, who is a “qualified person” for the purposes of NI 43-101 and in whose opinion, the level of data verification is suitable for purpose of the Matupá PEA.
The Company is not aware of any of any legal, political, environmental or other risks that could materially affect the development of the resources.
X1 Mineral Resource Estimate
The X1 deposit occupies a topographic high point (hill) in the area of the Project and is hosted by the Matupá Intrusive Suite near the contact with the mafic/ultramafic Flor da Serra Suite. The X1 deposit extends 400 meters along strike from east to west and 150 meters from north to south. The main host rock is porphyritic granodiorite which is intruded by a Quartz Feldspar Porphyry (QFP). Gold occurs in the disseminated form associated with intense phyllic alteration (quartz + muscovite + pyrite) in the QFP.
The Matupá PEA includes an updated Mineral Resource Estimate for the X1 deposit, which was completed to incorporate all geological data from previous drilling campaigns at the X1 deposit since January 2012. The updated Mineral Resource Estimate is based on the alteration models which encompassed all economic gold mineralization in the X1 deposit. The alteration models were described as phyllic and early potassic alterations. A high-grade shell model constructed for strong pervasive phyllic alteration grade interpolation was performed separately, with a hard boundary between the phyllic and the strong pervasive phyllic alteration domains. These mineralized domains were analyzed for grade capping and variography and was interpolated using the ordinary kriging method. Once the block model was completed it was classified into measured, indicated, and inferred mineral resources followed by a Lerchs-Grossman open pit optimization which resulted in the Mineral Resource Estimate presented in Table 3.
Table 3. Matupá Gold Project – X1 Deposit Mineral Resource Estimate*
|Resources Category||Tonnes (t)||Au (g/t)||Au (ounces)||Ag (g/t)||Ag (ounces)||AuEq (g/t)|
|Measured & Indicated||8,868,110||1.12||317,970||4.16||1,185,665||1.17|
*Mineral Resource Notes and Assumptions
(1) The Mineral Resource Estimate has an effective date of September 30, 2021.
(2) Mineral resources are not mineral reserves and do not have demonstrated economic viability.
(3) The mineral resources in this estimate were calculated with the Canadian Institute of Mining, Metallurgy and Petroleum (“CIM”) Standards on Mineral Resources and Reserves, Definitions and Guidelines prepared by the CIM Standing Committee on Reserve Definitions.
(4) Gold equivalent values were calculated using the following prices: a gold price of US$1,700 per ounce, and a silver price of US$22.00 per ounce Gold equivalent values can be calculated using the following formula: AuEq = Au g/t + (Ag g/t x 0.013).
(5) The base case cut-off grade for the estimate of mineral resources is 0.40 g/t Au
(6) The measured, indicated and inferred mineral resources are contained within a limiting pit shell (using US$1,700 per ounce of gold) and comprise a coherent body.
(7) It is reasonably expected that the majority of inferred mineral resources could be upgraded to indicated or measured mineral resources with additional drilling.
(8) A density model based on alteration and rock type was established for volume to tonnes conversion averaging 2.76 tonnes /m3.
(9) Contained metal figures may not add due to rounding.
(10) Surface topography as of July 31, 2021.
(11) The Mineral Resource Estimate for the X1 deposit was prepared by Farshid Ghazanfari, P.Geo., a Qualified Person as that term is defined in NI 43-101.
Several 100% owned satellite targets in a 30 kilometers radius of the X1 deposit has been identified so far. The most advanced of such targets being the Serrinhas Target, which is located 27 kilometers from X1 by paved highway. The target consists of ten square kilometers of trending hills with a series of former artisanal pits, and gold anomalies in the soil.
The Company believes additional mineral resources may be contained in certain areas of Matupá. Exploration may result in such mineral resources being identified at other satellite deposits surrounding the X1 deposit. Such potential additional mineral resources are conceptual in nature and there has been insufficient exploration to define a mineral resource. It is uncertain if further exploration will result in the target being delineated as a mineral resource. Accordingly, the potential additional mineral resources have not been incorporated in the Matupá PEA.
Farshid Ghazanfari, P.Geo., Geology and Mineral Resources Director for Aura Minerals Inc, Luiz Pignatari, P.Eng. Principal Mining Engineer at EDEM Consultants, Sao Paulo, Brazil and Porfírio Cabaleiro Rodriguez, FAIG, Principal Mining Engineer at GE21 Consultoria Mineral, Belo Horizonte, Brazil and Dr. Homero Delboni, Jr. Ph.D. (MAusIMM) Independent Consultant for Metallurgy (HDA Serviços S/S Ltda) are qualified persons as defined by NI 43-101 and reviewed the information that forms the basis for the scientific and technical contents of this press release.
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, the development of the Project and the anticipated timing thereof, expected production from, and the further potential of the production from, the Project, the receipt of all necessary approvals and consents to commence production at the Property, the use of debt financing in connection with the Project, and the achievement of financial KPIs in respect of the Project described in the Matupá PEA.
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. In addition, the results from the Matupá PEA are also based on assumptions, which may include assumptions on inferred mineral resources, indicated mineral resources, measured mineral resources, probable mineral reserves and/or proven mineral reserves, which could also cause actual results to differ materially from those contained in the forward-looking statements if such assumptions prove wrong. Specific reference is made to the most recent Annual Information Form on file with certain Canadian provincial securities regulatory authorities Matupá PEA for a discussion of some of the factors underlying forward-looking statements, which include, without limitation the ability of the Company to achieve its longer-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, silver and gold or 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.
Risks relating to Mineral Resource Estimates
The figures for mineral resources contained herein are estimates only and no assurance can be given that the anticipated tonnages and grades will be achieved, that the indicated level of recovery will be realized or that the mineral resources could be mined or processed profitably. Actual reserves, if any, may not conform to geological, metallurgical or other expectations, and the volume and grade of ore recovered may be below the estimated levels. There are numerous uncertainties inherent in estimating mineral resources, including many factors beyond the Company’s control. Such estimation is a subjective process, and the accuracy of any resource estimate is a function of the quantity and quality of available data and of the assumptions made and judgments used in engineering and geological interpretation. Short-term operating factors relating to the mineral resources, such as the need for orderly development of the ore bodies or the processing of new or different ore grades, may cause the mining operation to be unprofitable in any particular accounting period. In addition, there can be no assurance that metal recoveries in small scale laboratory tests will be duplicated in larger scale tests under on-site conditions or during production. Lower market prices, increased production costs, the presence of deleterious elements, reduced recovery rates and other factors may result in revision of its resource estimates from time to time or may render the Company’s resources uneconomic to exploit. Resource data is not indicative of future results of operations. If the Company’s actual mineral resources are less than current estimates or if the Company fails to develop its resource base through the realization of identified mineralized potential, its results of operations or financial condition may be materially and adversely affected.
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.
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. Our mission is to find, mine and deliver the planet’s most important and essential minerals that enable the world and humankind to create, innovate, and prosper and our vision is to be one of the most trusted, responsible, well respected and results driven mining companies. 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 a gold mine in the United States, Gold Road. 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:
President & CEO
 The Matupá PEA does not include Inferred Resources
 “Project Return on Equity” or “Project ROE” is a specified financial measure and is calculated by considering the Equity Contribution by the shareholder to the project and the cash available to the shareholder, at each period