Antilles Gold locks in gold-copper offtake deals to help finance Nueva Sabana mine in Cuba

Antilles Gold (ASX: AAU) has received a boost for its plans to develop the Nueva Sabana mine in Cuba with the signing of an offtake agreement that will help finance the project’s development.

Antilles’ 50%-owned Cuban mining company Minera La Victoria and a major global commodities trading house have signed two offtake agreements for the purchase of gold and copper-gold concentrates from the mine.

Notably, the proposed payables for metals are 12% higher for the gold concentrate and the copper-gold concentrate than those estimated in the Nueva Sabana pre-feasibility study the company released in January.

Major step forward

Antilles Gold chair Brian Johnson said the finalisation of the concentrate offtake agreements was a major step forward in arranging financing for the Nueva Sabana project, with the company’s negotiations with potential lenders progressing well.

“The mine is fully permitted and the aim is to finalise the financing within the next three months to allow construction commencement, with commissioning 12 months later,” Mr Johnson said.

The offtake agreements are for 100% of the gold concentrates and copper-gold concentrates produced at Nueva Sabana, which is currently estimated to have an initial life of approximately 4.5 years.

The unnamed counterparty is a major global commodities trading house with a diverse portfolio including substantial interests in metals and minerals.

Cuban partnership

Antilles Gold and joint venture partner GeoMinera SA – the state mining company of Cuba – are developing two previously explored mineral deposits on the island to produce gold, silver, antimony and copper concentrates, while exploring potentially large porphyry copper deposits.

Metallurgical test work at the construction-ready Nueva Sabana project has indicated the first stage of the mine will produce a gold concentrate from the gold zone at surface for approximately 18 months, followed by a blended copper-gold concentrate for approximately twice that duration.

Following the expenditure on pre-development costs, approximately $46 million remains to be spent on mine construction including a 10% contingency, spares, first fills and commissioning.