VANCOUVER, BRITISH COLUMBIA–(Marketwire – Nov. 10, 2008) – Aura Minerals Inc. (TSX:ORA) (the “Company” or “Aura Minerals”) is very pleased to provide the following update on operations at its Aranzazu Project located in Zacatecas State, Mexico and its Arapiraca Project located in Alagoas State, Brazil.
Aranzazu Project, Mexico
Since the Company assumed operational control of the Aranzazu Project on June 5, 2008, the focus has been on improving health and safety and ongoing maintenance and operational upgrades.
From acquisition to September 20, 2008, the Company processed low-grade stockpiled ore as it awaited formal approval of the required explosives permit. This permit was received on September 17, 2008. Since then, mine operations recommenced and development began on the extension of the existing ramp by the mining contractor. This development is to access the high-grade “BW” zone and continue development of the deeper sections of the “Mexicana” zone. It is expected that higher-grade ore, above 1.0% Cu and up to 1.3% Cu will be available for processing in Q1-2009. Development will also continue towards the “Arroyos Azules” zone beneath the existing open pit. Drilling to date has shown that this zone contains significant tonnage of ore above 1.30% Cu (see News Release #2008-23 dated September 18, 2008), with silver and gold credits.
The process plant upgrades have also proceeded as planned and since the beginning of October, the plant has processing on average 1,100 tpd (see News Release #2008-22 dated August 12, 2008) which is significantly higher than the 600 tpd average when the Company assumed operational control. The commissioning of a third 600 tpd mill is on schedule for Q4-2008 which will increase mill throughput to approximately 1,800 to 2,000 tpd. The Company shipped a record tonnage of concentrate during October of 670 dry metric tonnes (“DMT”) compared to the previous three months average of 350 DMT, and concentrate shipments are expected to continue to rise during Q4-2008.
There are currently two drill rigs operating at the project, a reverse circulation rig on the surface and an underground diamond rig. Surface drilling is focused on upgrading resources in the Arroyos Azules zone for ongoing mine planning purposes, and the underground rig is defining reserves in the Mexicana zone and on a new high-grade splay off the Mexicana. Once the development ramp is sufficiently advanced, the underground rig will move to newly developed drill stations to drill the BW zone and the recently discovered “BW Extension” (see News Release #2008-24 dated September 18, 2008).
Civil works are also now complete for the new assay laboratory which is on site and will be commissioned during the month of November. Engineering work will commence on the tailings dam expansion with earthworks planned to commence in Q1-2009.
Final stage metallurgical testwork is underway at G&T Metallurgical Services Ltd. in Kamloops, BC. To date, the work has shown that the copper concentrate grade will be significantly improved by bringing the existing cleaner and re-cleaner cells on line. Gravity testwork is also ongoing in order to optimize precious metals recoveries.
Arapiraca Project, Brazil
There has been significant progress on infill and step-out drilling at the Serrote da Laje deposit (the “Serrote Deposit”) since the release of the National Instrument 43-101 compliant updated resource (see News Release #2008-18 dated June 23, 2008). Recent results (see News Releases #2008-26 dated November 3, 2008) identified the discovery of a new high-grade zone just outside of the current pit design limits. Work is now ongoing to better define this zone, as it is open in all directions and to date has an average grade of greater than 0.9% Cu with gold, iron and nickel. The fact that this zone was intercepted below a marker gneiss horizon and that this same horizon extends all the way to the north end of the Serrote Deposit could have a significant impact on the resource tonnage.
Drilling at the Caboclo target has also been very successful (see News Release #2008-25 dated September 22, 2008). Recent step-out drilling appears to have extended this near-surface zone and results are pending. The Company plans a first resource calculation for Caboclo in Q1-2009 and it appears that there will be sufficient tonnage to augment planned process plant feed from the Serrote Deposit.
Regional exploration continues to identify and define new copper, iron and gold targets. This work will continue on a limited basis, but to conserve the treasury during the current uncertain economic climate, no drilling is planned.
Work has been completed on all environmental baseline studies necessary for the Installation License (“LI”) application document. The Company plans to submit the formal application before the end of 2008, and expects a formal response from the State Environmental Agency within 90 days of filing.
Metallurgical testwork has advanced significantly. All grinding and crushing testwork is now complete. Copper flotation testwork is also very well advanced with four of the seven planned locked cycle tests completed. Magnetite recovery testwork is also progressing well and final results of all testwork are expected in Q1-2009. From the work to date, the Company expects to produce a saleable magnetite concentrate. Nickel recovery testwork is also ongoing to determine whether this will be a payable stream as part of the copper concentrate or recovered as a separate nickel concentrate.
Process plant facilities and layouts are generally complete. The on-site geotechnical drilling and analysis indicated that the ground support conditions are excellent and this will reduce concrete pours and foundation excavations. The major equipment has been sized and budget costs are being obtained. The tailings dam preliminary design is also complete and costing is underway. Due to the “limited” topography, the dam is a simple 17-metre high-reinforced earth structure. The starter dam will be below 20 metres in height.
The power line route has been selected and discussions are ongoing with both the state government and the power supply company to determine final supply rates.
Upgrade work is almost completed on an existing nearby rail line and discussions are ongoing with the rail company and port authorities for transport of iron ore and copper concentrates.
The water supply route has also been selected and is currently being surveyed. The Company is assessing several options available for sharing of the capital costs, including a Public Private Participation (PPP) contract which would significantly reduce the capital requirements of the Company.
Project Capital and Operating Cost Data
There have been significant reductions in overall input costs for the Serrote Deposit capital estimate over the past several months. Cost of concrete, steel, and other major construction items are now at 2006 levels in Brazil. Furthermore, the Reais:US$ exchange rate is now at 2.15:1, equal to the 2006 average rate of 2.17:1. Based on these changes it is anticipated that there will be a major decrease in the projected capital costs for the Arapiraca Project. As a benchmark for the Serrote Deposit, the Company has compared quantities, costs, and exchange rates for Yamana Gold Inc.’s Chapada Project, which has a slightly larger throughput and is somewhat more remote in terms of infrastructure, but does not have a magnetite recovery circuit. The reported capital cost for the Chapada Project, which was completed in late 2006, was US$220 million at an average exchange rate of 2.20:1. Capital costs in this region will have a major impact on the Serrote Deposit economics.
Operating input costs in terms of fuel, reagents and other consumables are also declining. Moreover, with a higher Reais:US$ exchange rate, the labour and power impact costs have reduced in dollar terms. These factors will again have a very positive impact on the Serrote Deposit economics.
Commenting on these updates, Mr. Patrick Downey, President and CEO of Aura Minerals, stated, “We continue to make excellent progress on both projects.
We have achieved several milestones at our recently acquired Aranzazu Copper/Gold/Silver Project in Mexico. Since acquiring our explosives permit, we have increased tonnage and mill feed head grade. We have also commenced the advance of the existing adit so that we can access the higher-grade zones to the west and east of the Mexicana zone. We expected to be mining in the high-grade BW zone in Q1-2009. The third mill will also come on line by Q1-2009, which will increase production to 1,800-2,000 tpd. Once we achieve this run-rate in Q1-2009 at a higher head grade, we expect to be producing between 1.0-1.2 million lbs of copper per month with gold and silver credits. Cash costs, net of gold and silver by-product credits, at this run-rate are forecast to be less than US$1.50/lb of copper. We plan to continue our expansion to a target run-rate of 2,500 tpd of ore by Q4-2009 at a mill feed head grade of 1.35% Cu with gold and silver credits.
At the Arapiraca Project in Brazil, we are well advanced on permitting and project development. We are now finalizing the LI document for submission by year-end. This will be a very important document in the projected development timeline. We have also had advanced discussions on power supply contracts and on our water supply pipeline. Engineering is well advanced on the Feasibility Study, but in light of the current debt and equity markets, and uncertainty in the current commodity price environment, the Company is reviewing all expenditures and activities. This is to ensure we maintain a strong treasury, which currently stands at over $50 million, throughout these uncertain times. We will complete an interim Preliminary Economic Assessment based on all work completed to date and defer the detailed Feasibility Study and subsequent engineering work until we see greater certainty in the markets.”
Release of Escrowed Shares
On November 10, 2008, the 70 million common shares previously placed in escrow by the vendors of the Arapiraca property, Zoneplan Limited and Repalla Inc., pursuant to the member’s interest purchase agreement dated June 15, 2007, were released upon satisfaction of an escrow release condition, being the acquisition of the Aranzazu property.
About Aura Minerals Inc.
Aura Minerals is a Canadian resource company focused on the acquisition, exploration, development and operation of mining properties in the Americas. In addition to the Company’s recently acquired Aranzazu Property, the Company owns the advanced stage Arapiraca Property in north-eastern Brazil, which was originally explored in the 1980’s and 1990’s for copper and gold. The property also contains magnetite (up to 50%) and nickel and the Company is conducting a feasibility study of the Serrote da Laje deposit. The nearby infrastructure is excellent with ready access to roads, rail and shipping ports.
This news release contains forward-looking statements that are not historical facts. Forward-looking statements involve risks, uncertainties and other factors that could cause actual results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking statements. Factors that could cause actual results to differ materially from these forward-looking statements include those risks set out in Aura Minerals’ public documents filed on SEDAR at www.sedar.com. Although Aura Minerals believes that the assumptions and factors used in preparing the forward-looking statements are reasonable, undue reliance should not be placed on these statements, which only apply as of the date of this news release, and no assurance can be given that such events will occur in the disclosed time frames or at all. Aura Minerals disclaims any intention or obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise.
No stock exchange, securities commission or other regulatory authority has approved or disapproved the information contained herein.
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