Aguia Resources will shortly kick its uber high-grade Santa Barbara gold project into production. The Columbian project was worked by previous operators years ago and is now only weeks away from a restart. Previous bulk samples from Santa-Barbara went through the pilot plant at an impressive 20 grams per tonne gold and some veins are grading an ounce to the tonne gold.
Aguia Resources will shortly kick its uber high-grade Santa Barbara gold project into production. The Columbian project was worked by previous operators years ago and is now only weeks away from a restart. Previous bulk samples from Santa-Barbara went through the pilot plant at an impressive 20 grams per tonne gold and some veins are grading an ounce to the tonne gold. Aguia will look to exploit those high-grade veins up front.
Since acquiring the project in April as part of its takeover of ASX-listed Andean Gold, the company has wasted no time preparing for the project’s recommissioning, which it now believes will be within weeks.
To facilitate the all-important rehabilitation of the underground operations, the compressed air system purchased in September, has been installed and provides the necessary conditions to allow development to progress.
Underground development by the previous owners uncovered a series of high-grade gold-bearing quartz veins, in particular, the Mariana and Santa Barbara enrichments that both run at an average grade of almost one ounce of gold per tonne.
Management says these systems are key to the success of future operations and a new adit is being built on the Mariana structure to access deeper workings below the historically mined zones.
Additionally, a completed crosscut passage from the Santa Barbara workings now connects with the new Mariana development, removing a major bottleneck and allowing for a much-improved circuit for the removal of underground material through the Santa Barbara adit.
Once the underground refurbishment is complete and production begins, the company expects the project to gradually ramp up output to 50 tonnes per day (tpd), at an average grade of 20 grams per tonne, generating $125,000 a day in revenue.
Aguia Resources executive chairman Warwick Grigor said: “Aguia’s high-grade Santa Barbara gold project is expected to re-commence underground development imminently with processing of mineralised material scheduled over the coming weeks. Santa Barbara is an outstanding gold project and shareholders should be reminded that the Mariana and Santa Barbara veins host average gold grades approaching one ounce per tonne and these are the veins on which first mining will focus.”
Above ground, the existing 30tpd processing facility has been re-commissioned to handle material from underground development while the upgrades to increase its capacity to 50tpd are underway.
Oro Sinu SAS, a Medellin-based engineering and fabrication company, has been contracted to design and construct a new crushing circuit.
The expanded circuit includes a run-of-mine bin, crusher feeders, conveyors, primary and secondary jaw crushers, a screen and a tertiary pulveriser crusher to manage oversized material. Four new agitation tanks have also been added which will allow for increased gold production.
Already purchased ancillary equipment, to be supplied by Oro Sinu, includes a thickener, a Merrill Crowe precipitation system, gold room equipment and several underground two-tonne wagons.
The company has expanded site infrastructure to accommodate a bigger workforce at site, including enlarging the existing camp and constructing a new containerised camp with facilities such as a laboratory, medical centre and offices.
Aguia’s primary focus in the past few months has been all about bringing Santa Barbara back online and generating some much-needed, short-term cashflow, however, the company has recently made some significant progress on its plan to also become an organic phosphate producer in southern Brazil.
After recently winning a six-year legal stoush with local ranchers who had tried to block production of ore from its Tres Estradas mine in Rio Grande do Sul, in Brazil, the company revealed it has also locked away a long-term lease on a processing plant that only needs minimal expenditure to get up to speed.
With the full environmental approvals in its back pocket, Aguia believes it is on track now to produce 100,000 tonnes of rock phosphate per year by mid-2025, eventually ramping up to 300,000t per annum.
A 2023 bankable feasibility study - backed by strong economics - concluded that by producing 300,000 tonnes per annum across an 18-year mine life, with capital expenditure of $26 million, the project would spit out $22m a year in EBITDA. The payback period is anticipated to be 2.9 years on the back of a significant 54.7 per cent internal rate of return.
Notably, the company has inked a deal to lease an existing plant, rather than build its own which means the $26m capital expenditure assumption should be reduced to an almost negligible number, making the economics and rate of return even better.
Aguia has always regarded itself as an exploration business with two near-term cash flow opportunities, notwithstanding the regulatory hurdles and high capital expenditure that have always been the inhibiting factors. The past two months, however, appear to have proved seminal for the mining hopeful. To paraphrase a well-worn idiom, fortune nearly always conspires to favour the brave.
Aquia is looking brave right now.
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