Name of the Project
Federation base and precious metals project.

Location
Central New South Wales, Australia.

Project Owner/s
Hera Resources, a wholly owned subsidiary of Aurelia Metals.

Project Description
The project is one of the highest-grade base metals development projects in Australia.

A feasibility study completed in October 2022 has proposed the development of a zinc/lead/copper/gold/silver underground longhole stoping operation with rock-and-paste backfill.

The mine has a proposed production target of four-million tonnes at 8.6% zinc, 5.1% lead, 1 g/t of gold, 6 g/t silver and 0.3% copper.

The operation has an estimated life-of-mine (LoM) of eight years, with a 600 000 t/y maximum mining rate, and opportunities for multiyear extensions. The project will support the production of 313 000 t of zinc, 182 000 t of lead, 98 000 oz of gold and 535 000 oz of silver over the LoM.

The project will leverage Peak and Hera processing facilities and aims to maintain the flexibility to process ores from various mines to prioritise high-feed resources.

Potential Job Creation
Not stated.

Net Present Value/Internal Rate of Return
The project has a net present value (consensus case), at a 7% discount rate, of A$186-million and an internal rate of return of 37%, with a payback of 3.2 years.

Capital Expenditure
Preproduction capital is estimated at A$108-million.

Planned Start/End Date
Aurelia is targeting all necessary project consents by mid-2023.

Latest Developments
Aurelia Metals has announced a A$140-million funding solution for its Federation metals project.

The company has secured a A$100-million facility from commodities group Trafigura, comprising a $24-million loan note advance facility to contribute to the funding to build the Federation project, and a further A$65-million environmental bond facility to provide rehabilitation bonding.

The facilities will have a four-year term from the date of financial close.

In turn, Trafigura will have an offtake agreement, starting from January 2024, for 700 000 t of any combination of zinc, lead and copper concentrate produced from the Peak processing plant, and will be granted 120-million warrants over Aurelia shares with an exercise price of 25c each over a four-year term.

Aurelia has said that a portion of the funds will be used to repay the company’s existing A$9-million term loan, while the bond facility will replace the existing A$57-million guarantee facility, releasing A$46-million of restricted cash.

In addition to the Trafigura facilities, Aurelia will also undertake a fully underwritten equity raising of A$40-million through an institutional placement and a 1-for-3.71 pro rata, accelerated nonrenounceable entitlement offer.

About A$10-million will be raised under the share placement, which will result in 112-million new shares issued at 9c each, representing a 21.7% discount to Aurelia’s last closing price.

The placement shares represent 9.1% of Aurelia’s existing issued capital.

The entitlement offer is expected to raise a further A$30-million, and will consist of an institutional entitlement offer and a retail entitlement offer.

Key Contracts, Suppliers and Consultants
None stated.

Contact Details for Project Information
Aurelia Metals, tel +61 7 3180 5000 or email office@aureliametals.com.au.