Antilles Gold Ltd (ASX:AAU, OTCQB:ANTMF) has adopted a new strategy to achieve its medium-term objective of establishing a substantial mining group in Cuba in partnership with the government’s mining company, GeoMinera SA.
The company’s strategic goal will include the potential production of copper and zinc concentrates, within a joint venture with GeoMinera, in anticipation of a substantial growth in demand for these essential battery metals.
Antilles will also utilise part of the profits from the first two, near-term, gold mining projects to fund the exploration of a very large copper-gold porphyry system, and an entire VMS style polymetallic belt which has a history of copper and zinc concentrate production.
La Demajagua gold-silver mine
The mining joint venture company, Minera La Victoria SA, will seek to develop the La Demajagua open-pit gold-silver mine on the Isle of Youth in southwest Cuba, to produce about 100,000 ounces of gold equivalent annually in a sulphide concentrate for 6 years after commissioning in Q2 2024.
The open-pit operation is expected to be followed by underground mining for 10+ years.
El Pilar copper-gold porphyry system
Antilles will commence 14,000 metres of drilling in July 2022, followed by scoping studies of the previously explored El Pilar copper-gold porphyry system in central Cuba, and the overlying gold-copper oxide deposit, after which the relevant concession will be transferred to a mining joint venture for subsequent development.
The company is aiming to develop a low cost, open-pit mine to produce gold and copper concentrates at the El Pilar oxide deposit, for around 5 years from its expected commissioning in 2025.
The Exploration Target Range for the deposit is currently being estimated based on assays from over 80 RC (reverse circulation) drill holes into the oxide zone undertaken by a Canadian mining company in the 1990s which indicated the gold will be free-milling.
This aspect and the leaching efficiency of the copper ore underlying the gold-rich cap will be confirmed by metallurgical test work after a near-term cored drilling program.
New Horizons polymetallic belt
Antilles is planning to undertake a 15,000-metre diamond drilling program on the 40-kilometre long New Horizons VMS style polymetallic mineral belt in central Cuba once the targets are better defined by an airborne geophysical survey in early 2023.
Based on historic geological and mining data, it is anticipated that several pits will be developed within the New Horizons concession to provide ore to a centralised processing plant producing both copper and zinc concentrates with gold and silver credits, with commissioning possible in 2026.
Confidence that a project will be realised at New Horiozons is based on copper and zinc grades, evident remaining ore at four shallow mines operated by Russian mining companies until they withdrew from Cuba, and an additional 16 identified mineral exposures within the belt.
“At least three producing mines by the end of 2026”
The joint venture partners’ objective is to progressively expand operations to include at least three producing medium sized mines by the end of 2026 which should collectively generate substantial profits, some of which can be directed to the exploration of more significant prospects such as the major El Pilar porphyry system.
As a consequence of the opportunity to reinvest early cash flow from the proposed La Demajagua sulphide gold-silver mine, and the El Pilar oxide gold-copper mine, the projects that follow should require minimal capital contributions from Antilles after its initial equity of US$13 million for its 49% share of the La Demajagua open pit mine.
Over half of this amount has been subscribed to date.
Antilles will also spend about US$5.0 million over the next two years on the proposed preliminary exploration and scoping studies of the two concessions currently included in the exploration agreement with GeoMinera.
“First mover in a new frontier”
Antilles executive chairman Brian Johnson said that he was highly confident the joint venture’s objectives would be realised, and lead to increasing dividend flow and growth in the value of the company’s investment in Cuba.
As a “first mover in a new frontier”, the company is well placed in its relationship with GeoMinera to fast track permitting and project development in a stable environment for foreign investment, whereas the increasingly populist Governments in Latin America are causing difficulties for the mining sector in those countries.
Resolution of claims
Antilles expects to benefit from the resolution of over US$30 million of claims against the Dominican Republic government resulting from breach of contract by the government on a previous project.
The claims are currently being arbitrated by a unit of the World Bank in Washington DC with proceedings to be completed in June 2023.
Funds received from the arbitration will be applied to progressing activities in Cuba.
Experienced management team
Antilles has an experienced management team in place to achieve its objectives, including its recently appointed exploration director, Dr Christian Grainger.
Dr Grainger has spent 25 years exploring successfully in Latin American countries, with the last 12 years spent in Colombia where his discoveries were the basis for two junior Canadian companies, achieving market values of US$1.2 billion and US$800 million.
Dr Grainger identified the El Pilar porphyry system in central Cuba late last year, after it had been overlooked previously by several explorers.
The company’s initial objective is to participate with GeoMinera in the progressive development of a series of mid-sized mines to establish a profitable multi-mineral mining company.
If grades of the very large El Pilar porphyry deposit that were encountered at the surface continue at depth, as is expected, a significant uplift in the value of the company should occur.
Assays from initial drill holes are expected to be received from September 2022 and will be the first milestone in this process.
Activities planned through to mid-2024
La Demajagua gold-silver mine
- Updated JORC Resources for Open Pit Mine - July 2022
- Finalisation of JORC Resources and Mine Plan - September 2022
- Finalisation of Metallurgical Test Work - September 2022
- Finalisation of Concentrate Off-take Agreement - October 2022
- Finalisation of Definitive Feasibility Study - November 2022
- Commencement of Mine Infrastructure Construction - January 2023
- Finalisation of Project Financing - March 2023
- Commencement of Mine Construction - July 2023
- Commissioning of Mine - June 2024
El Pilar copper-gold porphyry system
- Exploration Target Range established for gold and copper at El Pilar oxide deposit - June 2022 Commencement of 14,000m drilling program - July 2022
- Initial drill results for El Pilar gold-copper oxide deposit - September 2022
- JORC Resources for El Pilar gold-copper oxide deposit - December 2022
- Scoping Study for El Pilar gold-copper oxide deposit - March 2023
- Transfer of El Pilar gold-copper deposit to mining joint venture with GeoMinera - December 2023 Commencement of construction of El Pilar gold-copper oxide mine - March 2024
- Progressive drill results for El Pilar copper-gold porphyry deposit - September 2022 to February 2023 Initial JORC Resources for El Pilar copper-gold porphyry deposit - June 2023
- Initial Scoping Study for El Pilar copper-gold porphyry deposit - September 2023
New Horizons polymetallic belt
- Airborne Geophysical Survey - January 2023
- Commencement of 15,000m drilling program - March 2023
- Progressive drilling results June 2023 - October 2023
- Initial JORC Resources - December 2023
- Initial Scoping Study for production of copper and zinc concentrates - February 2024
- Transfer of New Horizons Concession to mining joint venture with GeoMinera - June 2024