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Latin America-focused Aura Minerals Tops TSX30 List Again
Oct. 04, 2022 01:45PM PST
Currently the precious and base metals company has three operating assets, and last year its production increased to 269,000 ounces annually.
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Gold and copper producer Aura Minerals (TSX:ORA,OTC Pink:ARMZF) topped the annual TSX30 list for the second year in a row in mid-September. Canada's senior stock exchange cited the company's share price performance as the primary factor for the accolade, noting that it's risen 683 percent over the last three years.
Additionally, the TSX described all this year’s recipients as having “demonstrated their willingness to innovate their core offering, transform how they operate, and diversify their business for resilience and growth.”
For South America-focused Aura, the award is proof positive in its initial business plan.
“Hitting the first place twice is something that we're very proud of. We're in the exact right direction,” Rodrigo Barbosa, Aura’s CEO and president, said during an interview at Gold Forum Americas in mid-September.
“Although there's still a lot to do in the company, the fact is the strategy that we built four years ago of having easy to operate, easy to build, low-cash-cost mines in multiple jurisdictions — now it's paying off.”
Currently the precious and base metals company has three operating assets, where production has increased from 120,000 ounces annually to 269,000 ounces last year. “But if you include the two greenfield projects that we have, Almas and Matupá, it will be closer to 400,000 ounces by 2024,” he said. “Not including the acquisition that we just announced.”
The news Barbosa was referring to is the acquisition of Australian gold company Big River Gold. The joint venture deal between Aura and Dundee Resources will see Aura hold an 80 percent stake in the Borborema gold project, Big River’s sole asset.
“We were looking for a project that is ready to build, fully permitted and in a country that we already operate in, so Brazil was a natural place for us,” Barbosa said about Borborema, which is located in the country. “We were very glad also that (Dundee), one of the shareholders that has been invested, decided to remain with us in the project.”
Aura focusing on location, clean energy and speed
Barbosa explained that the company is set on choosing projects that meet a variety of criteria, including jurisdiction. “We feel comfortable with Mexico, Brazil and Honduras,” he said. “We have one project in Colombia as well, but now we are waiting to see.”
Democracy, institutional representation, as well as justice and law, were other factors the CEO listed.
“Brazil has evolved as a jurisdiction since the creation of a national independent agency for mining,” he said, noting that the change has occurred over the last five years and has helped with streamlining.
“(It is) making the whole process of mineral rights very transparent,” said Barbosa. “So Brazil is moving forward in terms of jurisdiction, while we have seen some hiccups in Latin America.”
The CEO noted that one of the benefits of the projects the company has chosen is that they have access to clean energy.
“We use renewable energy in Brazil, we use renewable energy in Honduras; most of the energy that we buy comes from a plant that is just 1 kilometer from our mine,” he said. “We plan to do wind or solar in Mexico.”
In addition to being environmentally conscientious, this clean energy strategy has also reduced some of the overhead costs associated with fuel. "It's going up mostly on oil, electricity is also going up in Mexico,” Barbosa said.
“Brazil is fortunate to have over 70 percent of its electricity produced by hydroelectric power plants. So we don't see that huge impact on electricity (prices) in Brazil.”
Aside from clean energy, Aura is also prioritizing projects that are easy to develop, a factor that shareholders have appreciated.
“We like to recycle capital very fast,” said Barbosa, adding that Aura chooses projects that can move quickly toward construction.
The company’s current project has taken less than a year and half to build, which is another item of pride for the company head. “And the payback is one year from the equity, so we can recycle capital very fast,” he said.
“That's why we like shovel ready, licensed projects.”
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Securities Disclosure: I, Georgia Williams, hold no direct investment interest in any company mentioned in this article.
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