Antilles Gold Ltd (ASX:AAU, OTCQB:ANTMF) has delivered a 25% boost in the resource at the La Demajagua gold-silver deposit in Cuba.
The resource now clocks in at 10.3 million tonnes of ore, grading 2.74 g/t gold and 29.3 g/t silver for 908,000 gold ounces and 9.707 million silver ounces.
Mineral resource statement (reported at a 0.8 g/t gold cut-off grade).
The company established its latest resource on 50,000 metres of historical drilling, as well as more recent assays from 28,000 metres of cored drilling to support a proposed open-pit mine at La Demajagua.
Ultimately, Antilles believes the additional 2.6 million tonnes of ore — nested within the indicated and inferred resource categories — should extend the mine life of its proposed open-pit operation from anywhere between six to eight years.
What’s on the cards?
Moving ahead, the company will consider what impact another 188,000 contained gold ounces would have on the open-pit mine’s economics, as detailed in a scoping study released in late February.
More broadly, the MRE for the La Demajagua open pit will be finalised after all outstanding assays are received next month.
A definitive feasibility study is also in the pipeline, scheduled for release in November this year.
From there, Antilles plans to work on mine infrastructure over the first half of 2023, with mine construction to follow in the succeeding 12 months.
The explorer aims to send out its first concentrate shipment in July 2024.
With so much activity planned in the next two years, Antilles concedes its drilling program for the proposed underground operation will probably be deferred until 2028.
However, it reassured investors that drilling would be completed in time for any development to ensure continuity of operations.
Let’s talk financials
Commenting on the update, Antilles Gold executive chairman Brian Johnson said that any increased life of the La Demajagua open-pit mine would assist the company’s joint venture with Cuban mining company GeoMinera to arrange project finance.
Antilles has begun discussions with prospective financiers that are not impacted by US sanctions and has budgeted 12 months to have finance in place.
Around US$15 million of the US$65 million of third-party funding required for the La Demajagua mine may be provided as credit by the Chinese suppliers of the project concentrator, as well as the heavy mining equipment, backed by the China Exim Bank or insurance company Sinosure.
Antilles may provide a short-term loan of up to US$15 million to the joint venture, which could come from:
- anticipated proceeds from US$30 million of claims against the Dominican Republic Government, which are currently being arbitrated by a unit of the World Bank;
- conversion of listed options in April 2023; or
- from an issue of shares or notes later in 2023.
Johnson said he was confident that a project loan of US$35 million can be arranged for the joint venture, where the lender will be repaid from a proportion of the proceeds from concentrate sales under a life of mine offtake agreement.
An important next step in the bankability of the proposed mine will be negotiating the concentrate offtake agreement.