Toronto-listed Aura Minerals has become the sole shareholder of Borborema Inc, the company that controls a namesake openpit gold project in Rio Grande do Norte, Brazil.
Dundee Resources, a subsidiary of TSX-listed Dundee Corporation, has elected to convert its 20% equity interest in Borborema into a net smelter royalty of 1.50% on the first 1.5-million ounces of gold sold and 1% on the next 500 000 oz.
“We are grateful for Dundee’s technical insights in getting us to this stage. Both our teams worked hard together and both companies will benefit as we advance this project to construction and production by early 2025,” says CEO Rodrigo Barbosa.
The company has also unveiled the results of a feasibility study for the project, outlining plans to produce 748 000 oz of gold over an initial 11.3-year mine life, with additional upside. The mine will produce gold at an all-in sustaining cost (AISC) of $949/oz, including the royalty paid to Dundee. If excluded, the AISC would be $923/oz.
“Our optimism extends beyond the current findings, as a potential additional 1.265-million ounces are expected to be converted to reserves following the completion of a 5.3 km road relocation, besides new resources that should be added in the future as the orebody remains opened along strike and down dip,” says Barbosa.
The study calculates a net present value of $182-million and an aftertax internal rate of return of 21.9%, using a gold price of $1 712/oz.
Following the completion of the feasibility study, Aura anticipates the start of full construction with an estimated construction budget of $188-million.