ASX-listed Antilles Gold reported on Thursday that construction had started at the Nueva Sabana copper/gold project in Cuba.

The early works are being carried out by Minera La Victoria (MLV), the 50:50 joint venture (JV) developing the project, and include establishing an access road from the national highway, earthworks for mine-site infrastructure, securing water supply and connecting high-tension power. These activities will allow China’s Xinhai Mining, contractor for the engineering, procurement and construction (EPC) package, to begin its on-site work next month with a focus on foundations for processing and support facilities.

Xinhai, which will build and operate the concentrator, is finalising detailed engineering and arranging the shipment of equipment, vehicles, camp accommodation and other structures from China. Under the EPC contract, the mine must be commissioned before the end of 2026.

Antilles Gold also outlined funding arrangements to advance construction in a financing environment constrained by US sanctions, which the company says has made traditional project lending unavailable. The site works, project management and administration will be supported by a $5-million interest-bearing loan from Antilles to MLV, funded partly through expected proceeds from the liquidation of its EnviroGold (Las Lagunas) subsidiary.

In addition, Xinhai will extend a $17.1-million credit facility to MLV by deferring a portion of its EPC progress payments. MLV plans to raise a further $8-million in gold loans from Asian and Australian investors, to be repaid from gold-concentrate sales, and will receive a $5-million prepayment against concentrate deliveries. All loan documentation and related security arrangements are being prepared by a Spanish law firm with Cuban associates and are expected to be completed within two months.

A financial analysis of the project’s first 4.6-year stage, released in November, indicated the mine could generate about $63-million in surplus cash within 20 months of commissioning, after repaying all loans, based on gold at $3 250/oz and copper at $9 250/t. A further $101-million could be realised from copper/gold concentrate production. At higher metals prices of $4 000/oz gold and $10 000/t copper, total surplus cash could reach $164-million.

Antilles Gold chairperson Brian Johnson said the start of construction less than two years after securing the concession underscored the project’s momentum, despite financing challenges. He added that, if strong metals prices persisted, retained earnings from Nueva Sabana’s first two years of operations could fully fund the JV’s next development, the La Demajagua gold/silver/antimony project.