Aura Minerals (ORA.TSX) announced gold production of 6,925 ounces and gold sales of 7,175 ounces from its 100%-owned San Andres Gold Mine in Honduras for the third quarter of 2009. Because the company closed the acquisition of San Andres on August 25, 2009, this data only accounts for production from the aforementioned date through September 30, 2009. Aura stated that these figures are preliminary and may differ slightly from third quarter earnings, which will be announced in the coming weeks. The company also noted that the operational improvements at San Andres will begin to have a positive effect on production and cash flow beginning in the fourth quarter of 2009. Aura went on to say that full integration of the new mining contractor on site has led to a significant increase in mine production in September of 2009 on a month-over-month basis.
Patrick Downey, Aura’s President and CEO, commented that “we are very pleased with the operational performance of the San Andres Mine, and we will continue to focus our efforts to optimize throughput and recovery in the coming quarters. On this basis, we expect to see ongoing cash cost reductions during the fourth quarter of 2009 and into 2010. The acquisition of the San Andres Mine is the first step toward Aura Minerals achieving its stated goal of becoming a mid-tier gold producer. We anticipate the completion of the acquisition of the SF/SV Mines in approximately four to six months, which will solidify Aura Minerals’ position as a +220,000 ounce-per-year producer.”
In addition to Downey and his team focusing their efforts on optimizing the new mines acquired earlier this year from Yamana Gold (AUY), the company has also been busy moving forward other projects contained in its pipeline. CEO Downey went on to say, “We have also accelerated engineering and development efforts at the Aranzazu Mine in Zacatecas, Mexico with the stated goal of recommencing production in second quarter of 2010. Recent drill results and our upcoming resource update lead us to believe that this mine could be developed into a large bulk tonnage underground operation and work will continue through 2010 to determine the full potential of this deposit. The recently completed PEA for the Serrote Deposit also shows that the Company has a viable fully permitted development project in an area of excellent infrastructure in a mining friendly jurisdiction in Brazil. We plan to continue to optimize the project, including improvements in metallurgical recovery, magnetite marketing studies and additional drilling at the nearby Caboclo target which is still open in all directions.”
Aura also stated that the acquisition of the Sao Francisco and Sao Vicente Gold Mines in Brazil is proceeding on schedule. At the company’s 100% owned Aranzazu Mine in Zacatecas, Mexico, engineering and project development has progressed substantially, such that a mine restart is expected in the second quarter of 2010. Aura has completed 12,200 meters of close-spaced core drilling at Aranzazu, and based on results to date, an additional 14,000 meters of drilling have been approved. Commissioning is expected in April 2010, which is targeting initial throughput of 2,600 tonnes-per-day by July 2010, and confirmatory metallurgical testwork is has been initiated for the continued optimization of copper and gold recovery. The company also intends to begin an engineering study in 2010 to examine the potential to develop Aranzazu as a high-tonnage, bulk-mining operation. According to Aura “the deposit has excellent mining widths and ground conditions and a 2,200 meter strike extent which is still open at both ends. Furthermore, the deposit is still open down-dip with a number of deep holes showing that there is good potential to expand the deposit in this direction as well as along strike.”
The Aura team has made a concerted effort to increase the visibility of their under-followed company, which will produce roughly 220,000 ounce of gold producers in 2010. This will vault Aura into the intermediate-size gold producer strata and may yield a valuation bump as CEO Patrick Downey continues to inform the marketplace of the company’s increased leverage to the gold price.
Aura Minerals is a Canadian resource company that owns the Aranzazu copper-gold-silver mine in Zacatecas, Mexico and is also developing its advanced stage Serrote da Laje copper-gold-iron ore deposit at its wholly-owned Arapiraca project in the State of Alagoas, Brazil. The company also has extensive exploration land holdings in Brazil, including iron ore and nickel targets in the Carajas region, State of Para, Brazil. Aura will assume control of the Sao Francisco and Sao Vicente gold mines in Brazil pursuant to its agreement with Yamana Gold, subject to regulatory approvals. In early morning trading shares of ORA.TSX were down C$0.06 to C$3.16 while the gold price was down $8.53 to $1,053.55 per ounce.
