Aura Implements Gold Hedging Program for the Borborema Project and Secures more than US$14 million Towards the Project Construction
October 18 2023 - 6:00AM
Aura Minerals Inc. (TSX: ORA, B3: AURA33 and OTCQX: ORAAF)
(“Aura” or the “Company”) is pleased to announce that it
has implemented a gold hedging program for the Borborema Project
(“Hedging Program”), to de-risk and secure the return on capital
invested during the first three years of production at Borborema.
Highlights of the Hedging
Program:
- Aura has hedged about 215,000
ounces of gold between July 2025 to June 2028 (the “Period”) using
gold-collars established with several financial institutions. The
derivatives were booked at Aura’s corporate level, and the total
volume is not projected to exceed about 20% of Aura’s expected
consolidated gold production for the Period, significantly
decreasing the risk of potential over-hedging.
- Aura purchased put options that
will expire monthly over the Period, at a strike price of US$ 1,745
per ounce, with the goal of ensuring that at least 80% of the
production during the first three years of production will be sold
at approximately the price or above the price used as the base case
in the feasibility study dated October 5, 2023 and entitled
“Feasibility Study Technical Report (NI 43-101) for the Borborema
Gold Project, Currais Novos Municipality, Rio Grande do Norte,
Brazil” (the “Feasibility Study”), which is available on Aura’s
profile on SEDAR+ at www.sedarplus.com.
- Aura sold call options that will
expire monthly over the Period at a strike price of US$2,400 per
ounce, ensuring upside exposure to the gold price.
- Aura has received or will receive
premium payments from the counterparties, totaling approximately
US$ 14.5 million.
- The premium payments of US$ 14.5
million will supplement the US$100 million, already secured through
a term loan established with Banco Santander Brazil, to partially
fund the construction of the Borborema Project.
- The results of the Feasibility
Study were released on August 30, 2023, and indicated, among other
things:
- Estimated initial capital
expenditures of approximately US$188 million. Payback period
estimated at 3.2 years after completion of construction, based on a
weighted average consensus gold price of approximately US$ 1,712,
for all operational years
- Aura currently expects that
construction will be completed by February 2025 and that commercial
production will be achieved by Q3 2025
Rodrigo Barbosa, Aura’s President and CEO
commented, “We have effectively executed a hedging program for the
Borborema project. This strategy seamlessly aligns with our capital
allocation and risk management approach. By doing so, we are not
only ensuring a minimum price that enables cash flows to cover both
debt and equity investments but also curbing the overall capital
requirements for the construction phase.”
Qualified Person
The scientific and technical information
contained within this news release has been reviewed and approved
by Farshid Ghazanfari, P.Geo. Mineral resources and Geology
Director for Aura Minerals Inc. and a “qualified person" as defined
in National Instrument 43-101 – Standards of Disclosure for Mineral
Projects.
About Aura 360° Mining
Aura is focused on mining in complete terms –
thinking holistically about how its business impacts and benefits
every one of our stakeholders: our company, our shareholders, our
employees, and the countries and communities we serve. We call this
360° Mining.
Aura is a mid-tier gold and copper production
company focused on operating and developing gold and base metal
projects in the Americas. The Company has 4 operating mines
including the Aranzazu copper-gold-silver mine in Mexico, the EPP
and Almas gold mines in Brazil, and the San Andres gold mine in
Honduras. The Company’s development projects include Borborema and
Matupá both in Brazil. Aura has unmatched exploration potential
owning over 630,000 hectares of mineral rights and is currently
advancing multiple near-mine and regional targets along with the
Serra da Estrela copper project in the prolific Carajás region of
Brazil.
Forward-Looking Information
This press release contains “forward-looking
information” and “forward-looking statements”, as defined in
applicable securities laws (collectively, “forward-looking
statements”) which may include, but is not limited to, statements
with respect to the activities, events or developments that the
Company expects or anticipates will or may occur in the future,
including the proportion of production from the Borborema Project
that will be sold at or above the base case price used in the
Feasibility Study, the receipt of premium payments from
counterparties, the estimated initial capital expenditures and
payback period at Borborema and the timing of completion of
construction and achievement of commercial production at Borborema.
Often, but not always, forward-looking statements can be identified
by the use of words and phrases such as “plans,” “expects,” “is
expected,” “budget,” “scheduled,” “estimates,” “forecasts,”
“intends,” “anticipates,” or “believes” or variations (including
negative variations) of such words and phrases, or state that
certain actions, events or results “may,” “could,” “would,” “might”
or “will” be taken, occur or be achieved.
Known and unknown risks, uncertainties and other
factors, many of which are beyond the Company’s ability to predict
or control, could cause actual results to differ materially from
those contained in the forward-looking statements. Specific
reference is made to the most recent Annual Information Form on
file with certain Canadian provincial securities regulatory
authorities for a discussion of some of the factors underlying
forward-looking statements, which include, without limitation,
volatility in the prices of gold, copper and certain other
commodities, changes in debt and equity markets, the uncertainties
involved in interpreting geological data, increases in costs,
environmental compliance and changes in environmental legislation
and regulation, interest rate and exchange rate fluctuations,
general economic conditions and other risks involved in the mineral
exploration and development industry. Readers are cautioned that
the foregoing list of factors is not exhaustive of the factors that
may affect the forward-looking statements.
All forward-looking statements herein are
qualified by this cautionary statement. Accordingly, readers should
not place undue reliance on forward-looking statements. The Company
undertakes no obligation to update publicly or otherwise revise any
forward-looking statements whether as a result of new information
or future events or otherwise, except as may be required by law. If
the Company does update one or more forward-looking statements, no
inference should be drawn that it will make additional updates with
respect to those or other forward-looking statements.
Readers are encouraged to read the “The
technical report (the “Technical Report”) titled “Feasibility Study
for the Borborema Project, Currais Novos Municipality, Rio Grande
do Norte, Brazil” which is filed in SEDAR+ on October 5th, 2023.
The Borborema Technical Report is subject to the assumptions,
qualifications and procedures described in the report, as
applicable, and readers are encouraged to read the report in its
entirety.
For more information, please contact:
Investor Relations
ir@auraminerals.com
www.auraminerals.com
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