Production, construction grinds to a halt at Aura Minerals’ Aranzazu
TORONTO (miningweekly.com) – Canadian midtier gold and copper producer Aura Minerals has provisionally suspended all mining activities and capital projects, including underground development work at the Aranzazu project, in Mexico, after the company failed to raise the required capital.
Aura on Thursday said it had been unable to internally generate, or externally raise, the financing required in the current mining and commodity price environment to maintain or expand the current operations.
Copper concentrate processing would continue until the stockpiles had been depleted.
The Toronto-based miner, which owned other copper/gold/silver mines in Mexico, Honduras and Brazil, highlighted that despite it having been able to lift output and reduce costs of its concentrate shipments, the majority of Aranzazu's site costs were fixed.
The company was in the midst of expanding the current 2 600 t/d operation to 4 000 t/d by early this year, at a cost of $107-million.
The expansion would have lifted Aranzazu's net present value by $145-million to $200-million.
Aura expected to review the operation’s mining and development plans, site costs and capital expenditures during the first half of the year, and planned to release a revised bankable National Instrument (NI) 43-101 report on the project that might comprise a smaller-scale expansion plan than that included in the preliminary economic assessment in 2012.
“Although this decision is a difficult and concerning one, in particular for Aranzazu's affected employees and the local community, it will preserve our cash position during these uncertain economic times. We will be providing severance benefits in accordance with Mexican law as well as training and outplacement services for all the employees affected by the suspension.
“We will also keep in place our systems and certain personnel to ensure that our safety, environmental, regulatory and social standards are maintained during the suspension,” Aura president and CEO Jim Bannantine said.
The company did not specify how many workers would be laid off.
Aura planned to use the results of the updated bankable NI 43-101 to secure additional financing to reopen and expand Aranzazu.
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