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Aura Minerals Inc. ("Aura Minerals" or the
"Company") (TSX:ORA - News) is pleased to announce
the declaration of commercial production at the copper-gold-silver Aranzazu mine effective February 1, 2011. The Company is
also pleased to report significant improvements in gold production for the
fourth quarter of 2010 and to provide production guidance for 2011. The
Company plans to release 2010 financial results and cash cost guidance for
2011 before the start of trading on March 31st, 2011. All dollar figures are
in United States dollars unless otherwise indicated.
Highlights
-- Total
Q4/2010 gold production of 44,449 ounces, an increase of 16% over
Q3/2010. Costs for
Q4/2010 are expected to be significantly below those
of Q3/2010;
-- Total gold production for 2010
of 137,519 ounces, meeting the upper end
of guidance of
130,000 - 139,000 ounces;
-- 2011 production guidance of
200,000 - 210,000 ounces of gold and
approximately 16.5
million pounds of payable copper;
-- Commercial production for the Aranzazu Mine was declared February 1,
2011, upon the mine
and mill having substantially passed mechanical
completion and
commissioning. All three mills have been operating
consistently for
several weeks along with the flotation plant,
filtration and
tailings disposal systems and reached a consistent 2,000
tonnes
per day ("tpd") throughput rate over the
past 10 days. The
Company expects to
ramp up the Aranzazu Mine to achieve full
production
of 2,600 tpd later this quarter. The Aranzazu
Mine is scheduled to
produce payable
metal of approximately 16.5 million lbs of copper,
10,000 ounces of
gold and 200,000 ounces of silver in 2011. Planning is
also in the early
stages for future expansion of the operation to 4,500
- 5,000 tpd;
-- Ongoing exploration at the San
Andres gold mine, the Sao Vicente gold
mine and the Aranzazu Mine, focused on converting resources to
reserves;
and
-- Waste stripping program at the
Sao Francisco Mine proceeding as planned.
"Although 2010 was a difficult year for the Company, we ended the
year on a strong note with production meeting our revised guidance. We also
saw significant cash cost reductions in Honduras and Brazil during the fourth
quarter, with notable improvements in production levels at all gold
operations. We continued to advance the Aranzazu
Mine to completion of construction and commissioning during the last quarter.
The declaration of commercial production at the beginning of this month for
this key asset is a significant milestone for the Company," commented
Patrick Downey, President and Chief Executive Officer of Aura Minerals.
"We have substantially completed all of our capital improvements at the
San Andres Mine and can now focus on strategic developments at both Brazilian
operations. In that regard, we recently appointed Mr. Neil Hepworth as
Vice-President, Operations - Brazil. Neil was most recently Vice-President,
Operations of Crew Gold Corp. where he was responsible for the operational
turnaround of Crew Gold prior to its acquisition by Severstal
Gold N.V. in late 2010. Neil's initial mandate is to complete a detailed
review of all operational issues at both mines, including review of mine
plans, capital expenditures and unit costs. We look forward to continuing
improvements at all our operations and strong ramp-up of production at the Aranzazu Mine through 2011."
Mine Operating Updates and 2011 Production Guidance
San Andres Gold Mine
Gold production at the San Andres Mine for Q4/2010 was 19,469 ounces,
which was slightly below target for the quarter, but 21% above the previous
quarter's production. Fourth quarter production was affected by the mining of
more mixed oxide/sulphide ore, which has a lower
recovery and a longer leach cycle, and by a lower than optimum pH in the
heap, which has been rectified. Year to date gold production at the San
Andres Mine was 70,640 ounces. As a result of the significant improvements
made at this operation over the last two years, the Company expects to see
improved recoveries in Q1/2011 and beyond. Production guidance for 2011 for
the San Andres Mine is expected to be between 80,000 - 90,000 ounces of gold.
Capital programs are essentially complete at the San Andres Mine with
sustaining capital expenditures of approximately $5 million planned for 2011.
Included in capital improvements to this operation is a new feed system for
the secondary crusher, to ensure a consistent crush size to the pads. This is
scheduled for completion Q2/2011.
The focus at the San Andres Mine will be on exploration and reserve
expansion. The San Andres Mine has approximately 1.6 million ounces of gold
in resources outside of current reserves. Most of these resources are in the
Measured and Indicated category and are mainly located just outside of the
reserve pit. The Company received its drill permit in Q4/2010 and completed
drilling within the Twin Hills pit in late January.
Sao Francisco Gold Mine
As previously announced, to allow mine operations to focus solely on
waste stripping and provide adequate time to complete needed upgrades at the
crushing and gravity circuits, the Company implemented a three to four month
dedicated waste stripping program at the Sao Francisco Mine, effective
December 1, 2010. During this period, mining of ore is being deferred, but
heap leaching of the ore on the leach pads is continuing. Gold production at
the Sao Francisco Mine for Q4/2010 was 12,922 ounces, 4% above the previous
quarter's production. Year to date gold production at the Sao Francisco Mine,
since acquisition on May 1st, was 36,278 ounces.
Capital spending at the Sao Francisco Mine for 2011 is approximately
$21 million, of which $15 million relates to the cost of the dedicated waste
stripping program to the end of Q1/2011 and the balance is sustaining
capital. Starting in Q2/2011, the Company expects to recommence mining of ore
and operation of the crusher-gravity circuit at the Sao Francisco Mine, with
the mining of increasingly higher head grades later in 2011. This will result
in ongoing improvements in production and corresponding reductions in cash
costs. The Company continues to review all operating aspects at the Sao
Francisco Mine, including changing to larger, more efficient haul trucks. The
Company will provide ongoing updates throughout 2011.
Production at the Sao Francisco Mine in 2011 is expected to be between
60,000 - 65,000 ounces of gold. Certain additional operational initiatives
are still being evaluated which would be expected to increase operational
productivity, improve overall gold recovery and continue to lower cash
operating costs. These initiatives include:
-- Using
an owner-operated fleet to transport crushed ore from the
crushing/gravity
plant to the leach pad, instead of the current contract
fleet. The estimated
capital cost for this program is less than $2
million and the
change from contract to owner-operated haulage of
crushed ore is
expected to occur later in 2011;
-- Installation of a 1,000 tpd agitated leach circuit to treat the gravity
circuit tailings and
to increase overall gold recovery by approximately
10,000 ounces per
annum, at an estimated capital cost of $12-16 million;
and
-- Modifying the operation of the
crushing/gravity circuit, including a
possible relocation
of the primary crusher to the pit rim, thereby
significantly
reducing haulage costs.
The Company believes that achieving a sustainable mine plan through
the dedicated waste stripping program, combined with the operational changes
outlined above, is expected to allow production of approximately 100,000
ounces of gold at estimated cash costs of between $700 and $800 per ounce in
2012 when mine grades are significantly higher. However, one of the key
challenges facing the Company is the continued strength of the Brazilian Real
currency and the high local inflation rate which continues to have a negative
impact on smaller scale operations.
Sao Vicente Gold Mine
Operations are generally on a steady-state basis at the Sao Vicente
Mine with the key focus being on improving maintenance practices to ensure
better availability of the process plant. Gold production at the Sao Vicente
Mine for Q4/2010 was 12,058 ounces, 22% above the previous quarter's
production. Year to date gold production at the Sao Vicente Mine, since
acquisition on May 1st, was 30,601 ounces.
Capital expenditures at the Sao Vicente Mine will be approximately $6
million for 2011. The main focus will be exploration as there is significant
opportunity to grow both the resource and reserve base at this mine.
Production guidance for the Sao Vicente Mine for 2011 is 45,000-52,000 ounces
of gold.
Aranzazu
Copper-Gold-Silver Mine
The Company declared commercial production for the Aranzazu
Mine effective February 1, 2011, at which time the mine and mill
substantially passed mechanical completion and commissioning. All three
primary grind mills have been operating consistently for several weeks along
with the rougher flotation plant, filtration and tailings disposal systems.
The Aranzazu Mine has not yet reached design
capacity of 2,600 tonnes per day due to certain
mechanical issues with water supply pumps and mill bearing failures which
have now been rectified, as well as the late mobilization of the mining
contractor and the slow ramp-up of underground operations due to severe
competition for skilled labour in Mexico. The
Company expects the Aranzazu Mine to achieve full
production at 2,600 tpd later this quarter. The Aranzazu Mine is scheduled to produce payable metal of
approximately 16.5 million lbs of copper, 10,000 ounces of gold and 200,000
ounces of silver for 2011. Mining for 2011 will be a combination of open pit
and underground, including underground development. The open pits are
currently mining a mixture of oxide and sulphide
ores, which effects recovery in the mill. However, concentrate grades are at
25% with excellent precious metal grades and with the commissioning of the
re-grind milling circuit and cleaner flotation circuits later this quarter,
these grades and recoveries will increase to design. The Company will also
transition to a majority sulphide feed by the end
of Q1/2011.
Engineering studies are in the early stages for future expansion of
the operation to 4,500 - 5,000 tpd. The Company
also plans to release further drilling results later this month, from along
strike and at depth.
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 includes 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.
For further information, please visit Aura Minerals' web site at
www.auraminerals.com.
Cautionary Statement:
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.
Contact:
Patrick Downey
Aura Minerals Inc.
President & Chief Executive Officer
(604) 669-4777
(604) 696-0212 (FAX)
info@auraminerals.com
www.auraminerals.com
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