June 14, 2011

Post in News by Admin

VANCOUVER, BRITISH COLUMBIA — (MARKET WIRE) — 06/14/11 — Aura Minerals Inc. (“Aura Minerals” or the “Company”) (TSX: ORA) today announced financial and operating results for the first quarter of 2011. All dollar amounts are expressed in US dollars unless otherwise specified.

First Quarter 2011 Financial and Operating Highlights:

— Substantially completed the previously announced four-month dedicated waste stripping program at the Sao Francisco Mine which started in early December 2010, which allowed the mine to resume normal operations in April 2011 with a sustainable mine plan in place; — Ramped up the Aranzazu Mine operation throughout the first quarter, and declared commercial production at this operation effective February 1, 2011, upon the mine and mill having substantially passed mechanical completion and commissioning; — Gold production of 34,169 ounces for the first quarter, with on-site average cash costs(1)of gold produced of $882 per ounce, comprised of the following: For the three months For the three months ended March 31, 2011 ended March 31, 2010 Ounces Ounces Produced Cash Costs(1) Produced Cash Costs(1) ————————————————————————— San Andres Mine 18,125 $ 626 19,299 $ 493 Sao Francisco Mine 7,188 811 – – Sao Vicente Mine 8,856 1,464 – – ————————————————————————— Total / Average 34,169 $ 882 19,299 $ 493 ————————————————————————— ————————————————————————— (1) See cautionary note regarding non-GAAP measures — First quarter 2011 gold production was impacted by the dedicated waste stripping program at the Sao Francisco mine, the rainy season in Brazil, which impacted mining operations at the Sao Vicente Mine, and lower gold recoveries at the San Andres Mine due to the processing of lower recovery ‘mixed’ ore during the quarter; — Produced copper concentrate at the Aranzazu Mine containing 942,900 pounds of copper, 688 ounces of gold and 29,930 ounces of silver in the first quarter 2011; — On-site, post-commissioning cash costs(1)of $4.87 per payable pound of copper, net of gold and silver credits, which reflects the processing of lower than expected ore tonnes due to start-up mechanical issues at the Aranzazu Mine and the impact of processing a high proportion of oxidized material which adversely affected metal recoveries and concentrate grades; — Aranzazu Mine copper concentrate production for April and May has doubled over March levels, resulting in higher concentrate grades and metal content as well as a reduction in cash costs(1)to approximately one-half of reported first quarter cash costs(1); — Total first quarter sales of $53.8 million, comprised of net gold sales of $51.6 million, from 37,512 ounces at a realized average price of gold sold of $1,388 per ounce for the quarter (which compares to a market average price of $1,385 per ounce (London PM Fix)), and $2.2 million from the shipment of 873 dry metric tonnes (“DMT”) of copper concentrate after February 1, 2011, being the date commercial production was declared; — Profit for the quarter of $4.4 million or $0.02 per share and adjusted loss for the quarter of $5.2 million or $0.02 per share, after adjusting for write-downs of inventory, unrealized foreign exchange losses and other non-recurring revenue and expense items; — Completed a restructuring of the contractual obligations owing to Yamana Gold Inc. (“Yamana”) and recognized a $17 million gain thereon, as further described below; — Arranged a two-year revolving credit facility with Barclays Capital, the investment banking division of Barclays Bank PLC (the “Credit Facility”) for $25 million, to be used for working capital at the Aranzazu Mine and general corporate purposes; — Released results during the quarter from ongoing exploration and definition drilling programs at the Aranzazu Mine, with an emphasis on increasing the overall resource base along strike and at depth; — Ended the first quarter of 2011 with $9.3 million in cash and cash equivalents, with the full availability of the Credit Facility; and — Appointed Mr.

Tom Ogryzlo, a member of the Board, as Interim Chief Executive Officer (“CEO”) effective June 6, 2011, replacing Mr.

Patrick Downey, who stepped down as President and CEO and resigned from the Board as of that date.

(1) See cautionary note regarding non-GAAP measures.

“During and subsequent to the first quarter of 2011, the Company completed two very significant milestones, which management believes will better position us to grow,” commented

Tom Ogryzlo, Interim CEO of Aura Minerals. “At the Sao Francisco Mine, we completed a seven million tonne waste stripping program and have implemented a new mine plan, which together with higher head grades and a much improved pit configuration and layout, is expected to increase production and lower cash costs starting in the second half of 2011. With this completed, our technical teams will now focus their attention on the smaller Sao Vicente Mine. The second significant milestone was the declaration of commercial production at the Aranzazu Mine. The operation continued to experience delays in the first quarter due to difficulties in obtaining skilled labour in Mexico, late mobilization of the mining contractor, and mechanical issues in the plant, which resulted in production being lower than expected. However, subsequent to quarter-end, many of these operational issues were resolved and the Aranzazu Mine reached throughput of 2,200-2,400 tonnes per day by mid-May, slightly lower than the design capacity of 2,600 tonnes per day. During 2011, we expect the Aranzazu Mine to produce between 11 – 12 million pounds of copper, approximately 8,000 ounces of gold and 220,000 ounces of silver, with estimated cash costs(1)of $1.25- 1.50 per pound of copper, net of by-product credits from gold and silver, once steady state production is achieved. At the Company’s other gold asset, the San Andres Mine, production in the first quarter was lower than expected as a result of a higher proportion of mixed ore processed, which typically results in lower gold recoveries. The mining of mixed ore will continue through the second quarter before mining in the upper benches of the Twin Hills pit begins. This area has a greater proportion of oxide ore and therefore should result in higher recoveries during the second half of the year. Lastly, at the Arapiraca Project, we expect to complete a feasibility study in the first quarter of 2012. This will represent a major step towards development of this world-class asset.”

Financial Review

The following financial information does not constitute management’s discussion and analysis (“MD&A”) as contemplated by relevant securities rules and should be read in conjunction with the Company’s unaudited interim consolidated financial statements for the three months ended March 31, 2011 and the annual audited financial statements for the year ended December 31, 2010 and the MD&A’s for the two periods, which are available on SEDAR at www.sedar.com under the Company’s profile or on the Company’s website.

The following table presents a summary of financial information for the three months ended March 31, 2011 and 2010:

Three months Three months ended ended (In thousands of dollars, March 31, March 31, except per share amounts) 2011 2010 ————————————————————————— (Unaudited) (Unaudited) Sales $ 53,789 $ 19,791 Cost of goods sold (51,519) (10,932) ————————————————————————— Gross Profit 2,270 8,859 Expenses Exploration expenses (3,893) (5,092) General and administrative expenses (6,969) (6,233) Finance costs (1,289) (473) Interest and other income 165 104 Gain on restructuring of contractual obligations 17,009 – Other gains (losses) 829 2,400 ————————————————————————— Profit (loss) before income taxes 8,122 (435) Income tax expense, net (3,759) (1,991) ————————————————————————— Profit (loss) for the period $ 4,363 $ (2,426) ————————————————————————— Adjustments: Unrealized foreign exchange (gains) losses (21) 1,085 Other unrealized losses 755 – Gain on restructuring of contractual obligations, net of tax (15,359) – Share-based payment expense 1,944 1,897 Write-down of inventory 3,121 – Non-recurring transaction costs – 1,297 ————————————————————————— Adjusted profit (loss)(1)for the period $ (5,197) $ 1,853 ————————————————————————— Basic and diluted profit (loss) per share 0.02 (0.01) ————————————————————————— Adjusted profit (loss)(1) per share $ (0.02) $ 0.01 —————————————————————————

Gold ounces sold for the respective periods, the average realized prices per ounce and net sales are detailed in the following table. The average realized prices per ounce for the three months ended March 31, 2011 and 2010 compare to the average market price (London PM Fix) of $1,385 and $1,109, respectively.

Three months Three months ended ended March 31, March 31, 2011 2010 ————————————————————————— San Andes Mine, (ounces) 18,464 18,034 Sao Francisco Mine, (ounces) 9,082 – Sao Vicente Mine, (ounces) 9,966 – ————————————————————————— Total ounces sold during Quarter 37,512 18,034 ————————————————————————— Realized average gold price per ounce in Quarter $ 1,388 $ 1,112 Gold sales revenues (in ‘000’s) net of local sales taxes $ 51,566 $ 19,791 Copper concentrate sales (in ‘000’s) 2,223 – ————————————————————————— Total net sales (in ‘000’s) $ 53,789 $ 19,791 —————————————————————————

Copper concentrate shipments for the first quarter 2011 were 1,240 DMT, containing payable metal of 580,127 pounds of copper, 463 ounces of gold and 13,261 ounces of silver, and resulted in sales, net of treatment and refining charges, of $3.2 million. Of these shipments, 873 DMT were shipped after February 1, 2011, for net sales of $2.2 million.

Cash costs of goods sold for the quarter totalled $39.9 million, of which $36.0 million or $960 per ounce related to cash costs of gold sold, and $3.8 million or $4,403 per DMT related to cash costs of copper concentrate sold. Cash costs of goods sold included inventory write-downs of $3.1 million to bring production inventories to their net realizable value. Together with non-cash depletion and amortization charges of $11.6 million, total cost of goods sold was $51.5 million for the quarter.

Gross profit for the quarter ended March 31, 2011 was $2.3 million, which compares to a gross profit of $8.9 million for the first quarter of 2010, which only included the results of the San Andres Mine.

Other expenses for the three months ended March 31, 2011 consisted of exploration expenses of $3.9 million and general and administrative expenses of $7.0 million. Finance costs for the quarter totalled $1.3 million and included interest paid on the promissory notes payable of $0.5 million and accretion expense on the Company’s asset retirement obligations and other long term liabilities of $0.7 million. During the three months ended March 31, 2011, the Company also recorded a gain on the restructuring of certain contractual obligations of $17.0 million, as further described below.

For the three months ended March 31, 2011, the Company recorded interest and other income of $165,000, which primarily relates to interest income on the Company’s cash deposits. The Company also recorded other net gains and losses of $829,000 which primarily comprises foreign exchange gains of $1.3 million.

For the first quarter of 2011, the Company recorded total income tax expense of $3.8 million, which consisted of current income tax expense of $2.7 million relating to income taxes payable on earnings at the San Andres Mine and deferred tax expense of $1.1 million, which includes $1.7 million related to the gain recorded on the restructuring of the Company’s contractual obligations.

For the three months ended March 31, 2011, the Company recorded a profit of $4.4 million or $0.02 per share. Adjusted loss (1) for the first quarter was $5.2 million or $0.02 per share after adjusting for unrealized foreign exchange gains and losses, share-based payment expense, and other non-recurring revenue and expense items.

Liquidity and Capital Resources

As at March 31, 2011, the Company had working capital of $42.3 million, including cash and cash equivalents of $9.3 million. In addition, the Company had the full $25 million available under the Credit Facility that was arranged in mid-March.

On March 18, 2011, the Company restructured its contractual obligations payable to Yamana, including $64.2 million in promissory notes and $43.2 million in deferred purchase consideration payable out of net free cash flows from the two Brazilian mines. These contractual obligations were considered paid and satisfied in full, and all related security was released, in consideration for 19,056,113 common shares of the Company, which were valued at $64.1 million, payment of $5 million which was made on March 31, 2011, and net smelter return royalty (“NSR Royalty”) equal to 1.5% of the sales from the San Andres Mine, Sao Francisco Mine and Sao Vicente Mine, up to a cumulative royalty amount of $16,000,000, commencing on March 1, 2013. Under the terms of the agreement, the royalty may be repurchased at specified amounts up to March 31, 2015. As the book values of the contractual obligations as at March 18, 2011 exceeded the fair value of the consideration given, the Company recorded a gain of $17.0 million on the transaction.

The Company’s ongoing liquidity needs will be funded from current cash resources, funds available under the Credit Facility, and operating cash flows generated from the San Andres Mine and, commencing in the second quarter of 2011, from the Aranzazu Mine based on higher production levels. Additionally, with the operational improvements being made at the Sao Francisco Mine, and a new mine plan based on significantly higher head grades and increased production levels, the Company also expects stronger operating cash flows to be generated from this unit, commencing in the third quarter of 2011. As a result, based on the Company’s current expectations from its operating mines, combined with strong metal prices, the Company believes it is fully financed to achieve its near-term growth objectives. Should operating cash flows be insufficient to cover planned expenditures, the Company may defer or cancel certain capital programs or other expenditures, or seek an increase to the Credit Facility.

Operational and Project Review

San Andres Mine

Production at the San Andres Mine in the first quarter was 18,125 ounces of gold, down 6% from the 19,299 ounces produced in the first quarter of 2010, and down 7% from the 19,469 ounces produced in the fourth quarter of 2010. Lower gold production in the quarter is attributable to the high proportion of ‘mixed’ ore processed, which characteristically has a lower level of oxidation which results in lower gold recovered and somewhat slower recovery rate kinetics.

The table below sets out selected operating information for the San Andres Mine for the three months ended March 31, 2011 and 2010:

Operating Information Q1 2011 Q1 2010 ————————————————————————— Ore mined (tonnes) 1,313,100 1,217,700 Waste mined (tonnes) 286,300 32,400 Total mined (tonnes) 1,599,400 1,250,100 Waste-to-ore ratio 0.22 0.03 Ore plant feed (tonnes) 1,317,000 1,244,000 Grade (g/tonne) 0.79 0.77 Production (ounces) 18,125 19,299 Sales (ounces) 18,464 18,034 Average cash cost per ounce of gold produced(1) $ 626 $ 493 (1) See cautionary note regarding non-GAAP measures.

Operating cash costs(1) of $626 per ounce of gold produced in the first quarter of 2011 were approximately 11% higher than the fourth quarter of 2010 and 27% higher than in the first quarter of 2010. Increased cash costs over the same quarter in 2010 are primarily a result of the significantly lower than average strip ratio in the first quarter of 2010, lower gold production and higher operating costs due to increases in lime, cement and cyanide consumption required to treat mixed ore. Operations at the San Andres Mine in late-June and July 2011 may be impacted by the shortage of sodium cyanide caused by the temporary shutdown of a key supplier’s facilities in the Memphis, Tennessee area due to the flooding of the Mississippi River in May. The supplier’s operations resumed full operations in late May. To the extent there is a disruption, any impact would only delay the leaching of gold to the following months.

As noted above, the processing of ‘mixed’ ore, with lower levels of oxidation resulted in lower gold recoveries in the first quarter. In 2011, the planned mining sequence will have a higher proportion of mixed ore mined in the first half of the year. During the third quarter of 2011, the mine plan is to commence mining on the next phase of the upper benches of the Twin Hills pit which will have a greater proportion of oxide ore. Ongoing metallurgical test work at site indicates that mixed ores will have a gold recovery rate in the order of 55 – 65%, while oxide ore will have a higher gold recovery rate in the range of 70 – 80%.

Sao Francisco Mine

During the first quarter of 2011, the Company substantially completed the dedicated waste stripping program, which started at the beginning of December 2010. Accordingly, operating results in this quarter are not representative of the mine’s full capacity and are not comparable with prior periods. Although mining of ore was deferred during this period, heap leaching of the ore on the leach pads continued and resulted in approximately $17 million of gold sales from the drawdown of the heap inventories over the four-month period. During the first quarter of 2011, a total of 7,188 ounces of gold were produced at operating cash costs (1) of $811 per ounce and 9,082 ounces were sold in the quarter, which contributed $12.7 million in gross revenue.

The table below sets out selected operating information for the Sao Francisco Mine for the three months ended March 31, 2011:

Operating Information Q1 2011 Q1 2010(2) ————————————————————————— Ore mined (tonnes) 65,900 – Waste mined (tonnes) 5,279,700 – Total mined (tonnes) 5,345,600 – Waste-to-ore ratio N/A – Dump leach ore stacked (tonnes) 26,900 – Grade (g/tonne) 0.38 – Production (ounces) 7,188 – Sales (ounces) 9,082 – Average cash cost per ounce of gold produced(1) $ 811 $ – ————————————————————————— (1) See cautionary note regarding non-GAAP measures. (2) No comparative results for the first quarter 2010 as the mine was acquired on April 30, 2010.

During the period that the dedicated waste stripping program was ongoing, the Company put considerable effort in preparing the mine for longer-term, sustainable operations, with an improved pit configuration and layout that would enhance production, reduce waste dilution and improve safety. The four-month period facilitated a change in waste bench configuration from 15 metre wide benches to 30 metre benches, which allows for more efficient blasting, material loading and transportation. The new configuration helps mitigate dilution, decrease handling and transportation costs, and allows for more efficient loading of trucks.

Upon resumption of normal operations in April 2011, the Company implemented a new mine plan, including stockpiling low-grade ore, which will be processed at the end of the mine life, and improving the crushing/gravity circuit maintenance program and making basic flowsheet changes to increase plant availability. In addition, the Company is reviewing options to use an owner-operated fleet to transport ore from the crushing/gravity area to the leach pad instead of using a contractor fleet at a capital cost of $2-3 million, commencing in late 2011 or early 2012, and installing a 1,000 tpd slimes re-treatment circuit to increase overall gold recovery in the last half of 2012 at an estimated capital cost of $12 million. Furthermore, April and May head grades for the crusher-gravity ore have increased over 71%, to 0.72 g/tonne over the average head grades processed in 2010. Crusher-gravity ore head grades are expected to increase further to 0.85 g/tonne for the balance of 2011, with fourth quarter grades averaging 1.00 g/tonne and to 1.14 g/tonne for 2012. The improvements described above, as well as the mining of higher grade ore in the mine, are expected to result in cash cost(1) reductions going forward. Based on the return to steady state leach pad operations, full year 2011 cash costs (1) are expected to average between $1,150 – $1,250 per ounce, with fourth quarter cash costs(1) expected of between $1,000 – $1,100 per ounce. In the first full year following the restart of normal operations, or in mid-2012, annualized production is expected to be approximately 100,000 ounces of gold, with cash costs(1) of between $800 – $1,000 per ounce. Thereafter, the head grade is expected to continue to improve, increasing annual gold production and further reducing cash costs(1).

Sao Vicente Mine

During the first quarter, gold production was 8,856 ounces, down 27% over the prior quarter due in part to the rainy season in Brazil which impacted mining operations and restricted access to higher grade ore in the bottom of the pit. Operating cash costs(1) for the first quarter were $1,464 per ounce of gold produced, approximately 36% higher than the $1,077 per ounce reported for the fourth quarter of 2010. The higher cash costs(1) primarily reflect the lower gold ounces produced, as well as the strengthening of the Brazilian real relative to the United States dollar. As with the Sao Francisco Mine, the Company’s focus for the Sao Vicente Mine has been operational improvements to increase productivity, improve overall gold recovery and lower cash operating costs.

(1) See cautionary note regarding non-GAAP measures.

The table below sets out selected operating information for the Sao Vicente Mine for the three months ended March 31, 2011:

Operating Information Q1 2011 Q1 2010(2) ————————————————————————— Ore mined (tonnes) 801,800 – Waste mined (tonnes) 1,585,800 – Total mined (tonnes) 2,387,600 – Waste-to-ore ratio 1.98 – Ore plant feed (tonnes) 784,700 – Grade (g/tonne) 0.47 – Production (ounces) 8,856 – Sales (ounces) 9,966 – Average cash cost per ounce of gold produced(1) $ 1,464 $ – ————————————————————————— (1) See cautionary note regarding non-GAAP measures. (2) No comparative results for the first quarter 2010 as the mine was acquired on April 30, 2010.

Aranzazu Mine

Although the Company declared commercial production at the Aranzazu Mine effective February 1, 2011, the operation had not yet reached design capacity of 2,600 tonnes per day (“tpd”) due to certain mechanical issues which have since been rectified, as well as the late mobilization of the mining contractor, the slow ramp-up of underground operations due to severe competition for skilled labour in Mexico and late delivery of underground mining equipment. Although mining for 2011 is a combination of both open pit and underground, including underground development, first quarter mining consisted of a mixture of oxide and sulphide ores, which reduced recovery in the mill. Notwithstanding, concentrate grades were between 24 – 25% copper in the first quarter with excellent precious metal grades. The Company expects to continue mining mixed oxide/sulphide ore in 2011, albeit with reduced oxide components in each of the next three quarters. Upon final commissioning of the re-grind milling circuit and cleaner flotation circuits later in the third quarter, together with the processing of a higher proportion of primary sulphide ore, concentrate grades and mill recoveries are expected to increase to design levels.

Initial production results for the first quarter 2011 are summarized below:

For the three months Operating Information ended March 31, 2011 ————————————————————————— Ore mined (tonnes) 105,600 Ore milled (tonnes) 126,100 Copper grade (%) 0.74% Gold grade (g/tonne) 0.30 Silver grade (g/tonne) 15.78 Copper recovery(1) 46.2% Gold recovery 50.7% Silver recovery 49.1% Concentrate Production: Copper concentrate produced (dry metric tonnes (“DMT”)): 1,728 Copper contained in concentrate (%) 24.8% Gold contained in concentrate (g/DMT) 12.4 Silver contained in concentrate (g/DMT) 538.8 Copper contained in concentrate (pounds) 942,900 Estimated payable copper produced (pounds) 892,700 Estimated payable gold produced (ounces) 601 Estimated payable silver produced (pounds) 27,023 Average cash cost per payable pound of copper produced, net of gold & silver credits(2), (3) $4.87 ————————————————————————— (1) Recoveries based on mixture of sulphide and oxide ores, not primary sulphide ore. (2) See cautionary note regarding non-GAAP measures. (3) For post-commissioning period, February 1 to March 31, 2011.

As indicated above, mill start-up issues limited throughput capacity in the quarter and were a limiting factor in preventing the mill from reaching its targeted 2,600 tpd ore throughput level. Mill start-up issues included mechanical problems with mill drive trains and babbit bearings, which contributed to low equipment availability in the grinding mills during the first quarter. These mechanical problems have been overcome and ore throughput rates have risen steadily subsequent to quarter end and reached 2,200 – 2,400 tpd by mid-May.

For the three months ended March 31, 2011, the Aranzazu Mine produced 1,728 DMT of copper concentrate in the first quarter, containing 942,900 pounds of copper (892,700 pounds of payable copper). The lower production levels during the restart of operations had an adverse impact on cash costs(1) per pound of copper, which averaged $4.87 per payable pound of copper in the post- commissioning period from February 1, to March 31, 2011.

The level of oxidation in the open-pit mineralization resulted in first quarter metal recoveries from the mill being lower than expected. This factor contributed to lower concentrate production and grades and lower metal content. Despite this, copper concentrate grades were between 24-25% in the first quarter. As indicated above, the Company expects to be mining a higher proportion of sulphide ore in each of the next three quarters in 2011.

With improved plant and sulphide ore availability subsequent to quarter-end, production levels for April and May have doubled over March production levels. The doubling of production also resulted in cash costs(1) decreasing by approximately one-half from the reported first quarter cash costs(1) and this trend is expected to continue. Once final commissioning of the regrind and cleaner circuit is completed and steady state mining of primary sulphide ore is achieved, the copper concentrate grade is expected to increase to approximately 28% to 30%.

(1) See cautionary note regarding non-GAAP measures

Underground mining is also being ramped up with the mining of ore currently from the Mexicana zone. Underground operations were slower than expected due to the delay in delivery of mine equipment and the difficulty in hiring suitably qualified mine operations personnel. However, the majority of the fleet has now been delivered and the Company has hired a mining contractor to assist in mine development, as well as the training of the Company’s mine personnel. The next stages of underground mine development will continue to be in the Mexicana Zone as well as the high grade BW zone and the AA Sub Level Cave. Ore will be sourced from both open pit and underground during the remainder of 2011 and into 2012, with transition into full underground operations thereafter.

Throughout 2010 and into the first quarter of 2011, the Company continued to actively drill-test the high- grade resources within the Calcocita, Arroyos Azules,

Glory Hole and BW zones. The purpose of this drill campaign was to: increase the drill density for both short and long term mining purposes; in-fill drill testing along strike to expand the database; and test the continuity of mineralization further at depth. In addition, a new zone, Zona CC, was discovered and returned high-grade drill results generally consistent with the existing resource base. As part of this program, results from 161 holes were released in 2009 and results from an additional 170 new and six historic holes were released during 2010, which continued to confirm grades and widths of the deposit. Drill results from another 39 holes were released in the first quarter of 2011.

Based on the encouraging results both at depth and along strike, the Company will commence planning in 2011 for a major expansion program for the mine. Together with the extensive surface and underground drill program mentioned above, this work will include all necessary geotechnical and engineering studies. Based on the continuity of mineralized intersections and favourable ground conditions, the Company believes that the deposit is suited to a low cost bulk mining scenario such as sub-level caving and long-hole stoping.

Arapiraca Project

The Arapiraca Project is a bulk-tonnage copper-gold-magnetite deposit located in the central-southern part of the State of Alagoas, Brazil. The Company has now finalized the variability testwork, grinding simulation testwork, design criteria and process flowsheet. The contract to complete a feasibility study is expected to be awarded by the end of the second quarter of 2011, with full completion of this study expected in the first quarter of 2012. With all essential permits in place, and with the excellent infrastructure in the vicinity of the project, the Company expects to commence negotiations for project financing and development during 2012, with a construction decision to follow later that year.

Outlook

The price of commodities, namely gold and copper, is one of the largest factors affecting Aura Minerals’ profitability and operating cash flows. Other key factors affecting the Company’s profitability and operating cash flows include: the levels of production, which are impacted by grades, strip ratios, plant and equipment availabilities, and process recoveries; and costs, which are impacted by production levels, fixed and variable costs, prices of key consumables, labour, inflation, and exchange rates. In the first quarter, the gold price continued its high level of volatility but overall continued its upward trend, rising over 2% to $1,439 per ounce at quarter-end. Subsequent to quarter end, the gold price spiked into the mid $1,500’s, but most recently has been trading in the $1,520 – $1,540 per ounce range. The price of copper trended lower in the first quarter of 2011, falling 3% to $4.30 per pound at quarter-end. Since the end of the first quarter, the copper price has continued to trend lower to the $4.00 – $4.15 per pound, affected by the upward trend in London Metals Exchange (“LME”) inventories, concerns over future Chinese demand given their efforts to slow the inflation rate, and the broad-based correction in commodities in early May. The Company believes that, despite continued volatility, market fundamentals, including the commodity price environment, and prospects for its business remain favourable and that the asset base will commence generating positive operating cash flows in the second half of 2011.

During 2010 and early 2011, the Company made a number of operational changes and improvements at the San Andres Mine to increase production. The impact of these projects on production was seen despite lower recoveries in the first quarter. In 2011, the Company expects annualized production at the San Andres Mine of between 72,000 and 78,000 ounces of gold with cash costs(1) in the range of $700 – 750 per ounce. Revised lower production guidance for 2011 is a result of the processing of additional mixed ore in the year, which has lower process recoveries. Increased cash cost(1) guidance is a result of the lower production and the associated increases to consumption of cement, lime and cyanide as a result of the mixed ore. Mining of more heavily oxidized ore will commence in the second half of 2011 from the next phase of the Twin Hills pit and is expected to result in higher recoveries.

Operating results at the Sao Francisco Mine are expected to improve substantially based on the waste stripping program which is now complete, other process and plant improvements to increase availability and throughput, and new mine plan which took effect early April 2011. As indicated above, upon resumption of operations, April and May head grades for the crusher-gravity ore have increased over 71%, to 0.72 g/tonne over the average head grades processed in 2010. Crusher-gravity ore head grades are expected to increase further to 0.85 g/tonne for the balance of 2011, with fourth quarter grades averaging 1.00 g/tonne and to 1.14 g/tonne for 2012. Combined with additional ore tonnages which result from the reconfigured pit, the new mine plan, and additional contractor’s equipment scheduled for arrival early in the third quarter, the Company expects significant improvements in production and reductions in cash costs(1)going forward. As a result, by mid-2012, annualized production is expected to be 100,000 ounces of gold at estimated cash costs(1)of between $800 – $1,000 per ounce. For the current year, taking into consideration the second quarter re-start and the typical leach cycle, the Company’s guidance for 2011 is 55,000 – 60,000 ounces of gold production for this operation with full year cash costs(1)averaging between $1,150 – $1,250 per ounce. However, the Company expects fourth quarter cash costs(1)to trend downward to between $1,000 – $1,100 per ounce.

Given the impact on mining operations at the Sao Vicente Mine of the rainy season and lower than expected equipment availability in the first quarter and for April and May 2011, the Company is reducing production guidance to between 42,000 – 45,000 ounces of gold for 2011, with estimated cash costs(1) of between $1,250 – $1,350 per ounce. The Company believes there are several opportunities to improve operational performance at the Sao Vicente Mine, some of which were started in 2010 and certain others continue to be implemented in 2011, such as modifying the heap leach stacking system to improve recoveries and reviewing the current process plant to upgrade plant availability and increase recoveries. Accordingly, with improved head grades and improved operating efficiencies and productivities expected from the operational improvements taking effect, the Company expects decreases in future cash costs(1) beginning later in 2011 and into 2012.

Estimated 2011 gold production guidance per mine, based on the restart of operations at the Sao Francisco Mine in early April, is summarized in the table below:

Gold Production Estimates ————————————————– San Andres Mine 72,000 – 78,000 oz Sao Francisco Mine 55,000 – 60,000 oz Sao Vicente Mine 42,000 – 45,000 oz ————————————————– Total 169,000 – 183,000 oz ————————————————–

As a result of mill start-up issues during the first quarter, the targeted nameplate throughput rate of 2,600 tonnes of ore per day at the Aranzazu Mine was only achieved late in the first quarter and mechanical issues, mainly with the grinding mills, prevented the operation from sustaining this level of throughput subsequent to March 31, 2011. These issues have now been overcome and sustained ore throughput rates have risen steadily subsequent to quarter-end and reached 2,200 – 2,400 tonnes per day by mid- May. Resolution of these mechanical issues, combined with the transition to more primary sulphide ore and less oxide material, will allow the Aranzazu Mine to improve copper recoveries and sustain design tonnages. As a result, the Company has revised its 2011 production and cash cost guidance to between

(1) See cautionary note regarding non-GAAP measures.

11 – 12 million pounds of copper, and approximately 8,000 ounces of gold and 220,000 ounces of silver, with estimated cash costs(1) of between $1.25 – $1.50 per payable pound of copper, net of gold and silver by-product credits, once steady state production is achieved.

Capital expenditure guidance for the balance of 2011 is approximately $27 million, of which $1.6 million relates to the completion of the dedicated stripping program at the Sao Francisco Mine and $11.7 million relates to underground development and other machinery and equipment at the Aranzazu Mine. Remaining 2011 capital expenditures also include approximately $2.7 million at the Sao Francisco Mine, $5.7 million at the Sao Vicente Mine, and $5.3 million at the San Andres Mine.

Exploration expenses are forecast to be approximately $6.0 million for the balance of 2011, which primarily includes $1.3 million at the Aranzazu Mine and approximately $4.0 million on the Arapiraca Project feasibility study later in 2011.

Conference Call

As announced on June 6, 2011, Mr.

Tom Ogryzlo has been appointed to the role of Interim CEO until a permanent CEO can be recruited. Mr. Ogryzlo is currently undertaking a detailed review of the Company’s operations. Accordingly, the Company will not be hosting its regular conference call to review the first quarter’s results. However, upon completion of the detailed review, Mr. Ogryzlo and senior management will host a separate conference call for analysts and investors to review operational and financial matters. The Company expects to host this conference call before the end of June.

Non-GAAP Measures

This news release includes certain non-GAAP performance measures, in particular, the total cash costs of gold per ounce, and adjusted earnings or loss and adjusted earnings or loss per share. These non-GAAP measures do not have any standardized meaning within International Financial Reporting Standards (IFRS) and therefore may not be comparable to similar measures presented by other companies. The Company believes that this information is useful to management and certain investors in evaluating the Company’s performance. The data presented is intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Cash costs are presented as they represent an industry standard method of comparing certain costs on a per unit basis. Total cash costs include on-site mining, processing and, administration costs, off-site refining and royalty charges, reduced by by-product credits, but exclude amortization, reclamation, and exploration costs, as well as capital expenditures. Total cash costs are divided by ounces to arrive at per ounce cash costs. Adjusted earnings or loss and adjusted earnings or loss per share are calculated by taking the Company’s net earnings or loss, excluding (a) non-recurring revenue and expense items; (b) share-based payment expense; (c) unrealized foreign exchange gains and losses; (d) unrealized gains and losses on derivative financial instruments; and (e) impairment losses.

About Aura Minerals Inc.

Aura Minerals is a Canadian mid-tier gold production company focused on the acquisition, exploration, 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, and the Sao Francisco and Sao Vicente gold mines in Brazil. The Company also operates the copper-gold-silver Aranzazu Mine in Zacatecas state in Mexico. Other significant assets include the feasibility-stage Serrote Deposit at the copper-gold-iron ore Arapiraca Project in Brazil.

(1) See cautionary note regarding non-GAAP measures.

Cautionary Note Regarding Forward-Looking Statement:

This news release contains “forward-looking statements” within the meaning of the applicable Canadian securities legislation. Except for statements of historical fact relating to the Company, information contained herein constitutes forward-looking statements, including any information as to the Company’s strategy, plans or future financial or operating performance. Forward-looking statements are characterized by words such as “plan,” “expect”, “budget”, “target”, “project”, “intend”, “believe”, “anticipate”, “estimate” and other similar words, or statements that certain events or conditions “may” or “will” occur. Forward-looking statements are based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made, and are inherently subject to a variety of risks and uncertainties and other known and unknown factors that could cause actual events or results to differ materially from those projected in the forward-looking statements. These factors include, but are not limited to, the impact of general business and economic conditions, global liquidity and credit availability on the timing of cash flows and the values of assets and liabilities based on projected future conditions, fluctuating metal prices (such as gold, copper, silver, nickel and iron ore), currency exchange rates (such as the Canadian dollar, Brazilian Real, Mexican Peso and the Honduran Lempira versus the United States dollar), possible variations in ore grade or recovery rates, changes in accounting policies, changes in the Company’s corporate resources, changes in project parameters as plans continue to be refined, changes in project development and production time frames, the possibility of project cost overruns or unanticipated costs and expenses, higher prices for fuel, steel, power, labour and other consumables contributing to higher costs and general risks of the mining industry, failure of plant, equipment or processes to operate as anticipated,

unexpected changes in mine life, final pricing for concentrate sales, unanticipated results of future studies, seasonality and unanticipated weather changes, costs and timing of the development of new deposits, success of exploration activities, successful completion of proposed acquisitions, permitting time lines, government regulation of mining operations, environmental risks, unanticipated reclamation expenses, title disputes or claims, limitations on insurance coverage and timing and possible outcome of pending litigation and labour disputes, as well as those risk factors discussed or referred to in the Company’s Annual Information Form, dated March 30, 2011, under the heading “Item 4.2 – Risk Factors”. Although the Company has attempted to identify important factors that could cause actual actions, events or results to differ materially from those described in forward-looking statements, there may be other factors that cause actions, events or results not to be anticipated, estimated or intended. There can be no assurance that forward-looking statements will prove to be accurate, as actual results and future events could differ materially from those anticipated in such statements. The Company undertakes no obligation to update forward-looking statements if circumstances or management’s estimates, assumptions or opinions should change, except as required by applicable law. The reader is cautioned not to place undue reliance on forward-looking statements. The forward-looking information contained herein is presented for the purpose of assisting investors in understanding the Company’s expected financial and operational performance and results as at and for the periods ended on the dates presented in the Company’s plans and objectives and may not be appropriate for other purposes.

Contacts: Aura Minerals Inc.

Tom Ogryzlo Interim CEO (604) 669-4777 (604) 696-0212 (FAX) info@auraminerals.com www.auraminerals.com

Source: Aura Minerals Inc.