Antilles Gold Ltd (ASX:AAU, OTCQB:ANTMF) has received all results from its recent 1,800-metre drilling program at El Pilar in central Cuba which was aimed primarily at validating 28,000 metres of historic drilling on the outcropping gold-copper oxide deposit.
Encouraging results justify exploration
The company feels the encouraging results prove the case for proceeding with a 10,000-metre cored drilling program to establish the deposit’s JORC resources.
In addition to a number of “outstanding intercepts” highlighted below for gold and copper in the 65-metre to 75-metre-deep oxide deposit, one of the holes penetrated 134 metres from below the upper gold domain through the lower copper domain, and into an underlying sulphide zone with an average grade over this length of 1.23% copper and was open at depth.
Highlights
Gold oxide zone
- 20 metres at 2.87 g/t gold from surface including 3 metres at 13.81 g/t;
- 13.4 metres at 3.53 g/t from 14.3 metres;
- 53.5 metres at 10.92 g/t from 12 metres including 18.4 metres at 14.00 g/t from 45 metres; and
- 18 metres at 2 g/t from 4 metres.
- 30.4 metres at 0.55% copper from 49.5 metres including 8 metres at 1.39% from 53.5 metres;
- 18.5 metres at 5.52% from 59 metres; and
- 18 metres at 1.08% from 32.5 metres including 3.8 metres at 3.83% from 38.5 metres.
These assays are considered to be preliminary as they were undertaken at the Cuban Government’s LACEMI (Laboratorio Central de Minerales) laboratory in Havana, which is not JORC-certified.
All assays will be replicated at SGS’s laboratory in Canada within the next four to six weeks.
Development of low cap-ex mine
In order to progress the possible development of a low cap-ex mine on the El Pilar oxide deposit, the following things need to happen, several preconditions need to be fulfilled:
- The government is excising an area nominated by Antilles Gold from the 18,000-hectare El Pilar concession held within the company’s Exploration Agreement with GeoMinera to create a new concession for oxide ore, with mining to be restricted to a depth of 100 metres.
- The government will then propose a value for the new concession as a basis for negotiations with Antilles Gold to determine the amount the company will contribute for pre-development activities to earn 49% ownership of the concession.
- The earn-in amount is expected to be relatively low as the concession’s market value will only emerge when JORC resources and a scoping study have been completed for the deposit in about nine months.
- Antilles Gold has requested that the new oxide concession be transferred to the existing joint venture company, Minera La Victoria SA (MLV) for development. This will obviate the requirement for a new joint venture to be negotiated, which would otherwise be time-consuming.
- The gold and copper concentrates to be produced from the oxide deposit are expected to have low levels of contaminants and will be sold into a market with strong demand for such products.
- Early discussions with international concentrate traders have indicated that buyers will support project financing.
The porphyry concession will be transferred to a new joint venture between Antilles Gold and GeoMinera, and the company will request that the level of foreign ownership be increased from the current industry maximum of 49% which, if approved, would improve the prospect of attracting future participation of a major mining group in what could be a significant project.
Antilles Gold’s ‘at-risk’ expenditure on its initial review of the potential of the El Pilar deposit is not expected to exceed US$2.5 million and will be spread over the next six to nine months in advance of the new concessions being transferred to joint ventures.
Capital raising
Executive chairman Brian Johnson said: “It is disappointing to have to undertake the current issue of shares at a depressed share price but it is important to have funding available to maintain the momentum of activities in Cuba including the progress of its exploration program and to reinforce its relationship with GeoMinera and Cuban authorities.
“On completion of the current raising, the company’s activities in Cuba will be fully funded through to July 2023, and in the interim period will be working with a supportive London-based merchant bank, and specific mining companies with operations in Latin America, to arrange funding for exploration activities in the second half of 2023, and for 2024, with the aim of minimising, or eliminating, further near-term dilution.”