Antilles Gold Limited

Overview

Antilles Gold (ASX:AAU, OTCQB:ANTMF) is an Australian mining company focused on gold and copper projects in Cuba through joint ventures with the Cuban Government’s mining company, GeoMinera.

With a change in the US‐Cuba relations, Cuba is becoming a destination for miners. To encourage foreign investments in its mining sector, the Cuban Government has instituted attractive investment laws and realistic mining and environmental regulations. The country also offers investment incentives, including a waiver of 15 percent income tax for eight years, no import duties, and no withholding tax on foreign services or dividends. Royalties on metal sales are fixed at an industry standard of 3 percent.

Additionally, the Cuban Government allows JV loans and sales proceeds to be deposited in a foreign bank account for disbursement directly to creditors, effectively eliminating country credit risk.

Several international companies have established operations in Cuba, including Toronto‐based mining giant Sherritt International and Australian oil & gas company Melbana Energy. Commodities trading company Trafigura also has a major presence in Cuba, commissioning the US$300‐million Castellanos base metals mine in 2017, which was developed in a joint venture with GeoMinera.

Antilles Gold’s partnership and excellent relations with GeoMinera has resulted in rapid project permitting and access to several new development opportunities for the Australian company.

Antilles Gold offers strong growth potential through two near‐term development projects, Nueva Sabana and La Demajagua, and two exploration projects, El Pilar porphyry system and Sierra Maestra copper concessions.

The Nueva Sabana is a near‐term, gold‐copper mine development within a 50:50 JV with GeoMinera, and is expected to initially produce around 55 grams per tonne (g/t) gold in a concentrate from a high‐grade gold cap followed by ~25 percent copper concentrate. Project development strategy includes finalizing the mineral resource estimate (MRE) in January 2024, completing the feasibility study by April 2024, and beginning the 10‐month construction program in June 2024. The project is expected to generate strong cash flow from mid‐2025.

The second proposed mine development is La Demajagua open-pit mine, which is likely to produce ~50,000 tpa of gold arsenopyrite concentrate (32 g/t gold, 27 percent arsenic), and ~10,000 tpa of gold antimony concentrate (28.8 g/t gold, 48 percent antimony, 1,200 g/t silver) for nine years. According to the plans, construction will commence in late 2024, with commissioning in mid‐2026. La Demajagua will also include the construction of a commercial concentrate processing facility to treat La Demajagua’s gold arsenopyrite concentrate and imported gold pyrite concentrate, with the capacity to produce 100,000 oz gold per year in dore, which will further increase JV profit and cashflow.

The company’s two exploration projects comprise the 17,800‐hectare El Pilar Concession in Central Cuba covering a cluster of three copper‐gold porphyry deposits (El Pilar, Gaspar and San Nicholas), and three concessions totaling 54,000 hectares within the producing Sierra Maestra copper belt in Southeast Cuba, with indications of porphyry deposits highly prospective for copper, gold and molybdenum.

Antilles aims to recommence drilling of the El Pilar porphyry system in mid‐2024 after its concession has been transferred to a new JV with GeoMinera. Importantly, there is a likelihood for Antilles to become the majority owner of the new JV, which would permit the future transfer of a controlling interest to a major mining group for any mine development.

Antilles intends to invest part of the expected surplus cash flow from the Nueva Sabana mine to fund the exploration of major copper targets, including the El Pilar copper‐gold porphyry system, and the Sierra Maestra copper belt.

Company Highlights

• Antilles Gold Limited is an Australian mining company listed on the ASX (AAU) and OTCQB (ANTMF).
• The company is focused on gold and copper projects in Cuba through joint ventures with the Cuban government’s mining company GeoMinera. The relationship with GeoMinera opens new development opportunities for Antilles and de-risks permitting processes.
• The company is engaged in four development projects: 1) Nueva Sabana gold‐copper mine; 2) La Demajagua gold mine; 3) El Pilar porphyry copper project; and 4) Sierra Maestra copper concessions. Of these, Nueva Sabana and La Demajagua offer near‐term development opportunities.
• The Nueva Sabana is a near‐term gold‐copper mine development project with a 10‐month construction beginning in June 2024. The project is expected to generate strong cash flow from concentrate sales from mid‐2025.
• The second mine development project is La Demajagua, an open-pit mine gold project where construction will commence in late 2024 and commissioning begins mid‐2026. The project includes the construction of a commercial concentrate processing facility capable of producing 100,000 oz of gold per year in dore. This project will also produce approximately 10,000 tons per annum (tpa) of antimony‐gold concentrate (30,000 oz gold equivalent per year).
• The company’s two exploration projects include the El Pilar copper‐gold porphyry system and three concessions in the Sierra Maestra copper belt.
• Investment in Cuba offers several benefits, including richness in minerals, lower operating costs and royalties, stable government and regulations, several investment incentives and the availability of a skilled workforce.

Key Projects

Nueva Sabana Project

Nueva Sabana is the company’s near‐term, gold‐copper mine development project. The project is held in a 50:50 JV with the Cuban Government’s mining company GeoMinera. It will be an open-pit mine developed on the El Pilar oxide deposit in central Cuba.

Results from 24,000 metres of historical drilling results, 1,800 metres drilled in 2022, and the 10,000 metres drilled in 2023 will be used to establish a mineral resource estimate (MRE) in January 2024. A feasibility study for the proposed development of the oxide deposit will follow soon after that, and the 10‐month construction phase is expected to begin in June 2024.

Recent drilling has shown outstanding grades for gold and copper, and increasing lateral and vertical boundaries of the copper domain. The results reinforce the prospect of near‐term development of the low‐capex Nueva Sabana mine at El Pilar. The outstanding grades in the gold domain extend from the surface to a depth of 40 to 50 metres, and robust grades in the underlying copper domain continue for a further 50 to 70 metres.

The proposed mining rate for the project will be 650,000 tpa of ore with a low waste‐to‐ore ratio. The anticipated initial production of 55 g/t gold concentrate will be followed by ~25 percent copper concentrate.

The estimated project cost is approximately $23 million, of which $3 million is shareholders equity with the balance of $20 million funded through an advance on purchases of the gold concentrate by an international commodities trader.

Chinese engineering group, Prominer Mining Technology, which has extensive experience in designing and constructing gold and copper concentrators, is expected to supply the crushing and flotation circuits for the Nueva Sabana mine.

La Demajagua Project

La Demajagua involves the development of a gold‐antimony‐silver deposit as an open-pit mine by the joint venture company, Minera La Victoria.

The project covers 900 hectares of mining concession on the Isle of Youth, 60 nautical miles from mainland Cuba. The project site is 35 kilometres from the port city of Nueva Gerona and enjoys excellent infrastructure in terms of accessibility by highway, and availability of water, electricity and fiber optic cable.

The project has an MRE of 905,000 oz gold equivalent for the open-pit operation. The MRE was calculated from results from 29,000 metres of drilling undertaken by the JV, and selective results from about 50,000 metres of historic drilling and revised after the receipt of additional antimony assays. The project expects mining of about 815,000 tpa ore to produce two concentrates: 50,000 tpa of gold‐arsenopyrite and 10,000 tpa of gold‐antimony‐silver for nine years.

The project will also include a commercial concentrate processing facility to produce gold dore. The facility will comprise a 75,000‐tpa two‐stage fluidized‐bed roaster and a 100,000‐tpa carbon-in-leach (CIL) circuit. It is expected to process 50,000 tpa gold arsenopyrite concentrate, and 35,000 tpa gold oxide ore from La Demajagua, and 25,000 tpa of imported gold pyrite concentrate. The overall production target is 100,000 oz gold per year in dore for overseas refining. Chinese engineering firm BGRIMM Technology Group, which has extensive experience in designing and constructing roasters, is expected to supply the turnkey process plant.

Total mine development cost is estimated at US$145 million, which will be funded by US$60 million in equity, which includes contribution by a third shareholder in the project, and the balance of US$85 million in debt. The life‐of‐mine cash surplus is estimated at ~US$600 million, with an NPV of about US$330 million based on US$1,800/oz gold, and US$13,000/t antimony.

Completion of the definitive feasibility study is expected in September 2024, and construction is anticipated to commence in late 2024, with commissioning targeted for mid‐2026.

El Pilar Copper‐Gold Porphyry System Project

El Pilar is an exploration project with a cluster of three copper‐gold porphyry deposits: El Pilar, Gaspar and Camilo. The project comprises 752 hectares of exploration licenses and 17,000 hectares of reconnaissance permits. The project will be transferred to a planned new joint venture, which is expected to permit majority foreign ownership.

The project site benefits from established infrastructure with access to a major highway, high‐tension power, and a 60 kilometre rail link to Palo Alto port.

Previous mapping, soil sampling, ground magnetics, an aeromagnetic survey and 24,000 metres of shallow drilling confirmed the existence of copper‐gold mineralization and identified the exposures as potentially a large, leached porphyry system. The surface exposures at El Pilar are leached phyllic caps to a cluster of copper‐gold porphyry cores. The extent of surficial hydrothermal alteration indicates the porphyry intrusions have large dimensions, and potential depths greater than 1,000 metres.

Ground magnetics and induced polarization surveys in early 2023 have confirmed a cluster of three potentially large porphyry intrusives – El Pilar, Gaspar and Camilo. A six‐hole initial program has demonstrated positive results with good copper intercepts in porphyry‐style veining and has indicated the proximity of drilling to the core of El Pilar porphyry intrusive. In particular, drill hole PDH‐004A assayed 1.23 percent copper over its length of 134 metres from 49 metres.

An extensive two‐year drilling program will be conducted from mid‐2024 and the company notes it may seek financial support for the program from a major mining company.

Sierra Maestra Copper Belt Project

The project is an exploration project covering three highly prospective concessions for copper, gold and molybdenum in the Sierra Maestra copper belt in southeast Cuba. It includes a 3,600-hectare geological investigation license in La Cristina, a 49,000‐hectare reconnaissance license in Vega Grande, and a 1,100‐hectare reconnaissance license in Buey Cabon.

The copper belt spans more than 200 kilometres of Cretaceous‐age geology intruded by Eocene stocks, which are the source of widespread gold and base‐metals mineralization. The project is near the El Cobre mine which is the oldest operating copper mine in the Americas. The concessions incorporate a series of copper‐gold‐molybdenum zones that display significant footprints of hydrothermal alteration normally associated with potentially large porphyry systems.

An extensive, two‐year prospecting program will be carried out on the three concessions, commencing in Q1 2024, to identify drill targets.

Management Team

Brian Johnson – Executive Chairman

Brian Johnson is a graduate of civil engineering from the University of Western Australia and a member of the Institute of Engineers, Australia. He has rich experience in the construction and mining industries in Australia, Southeast Asia and North America. He was instrumental in establishing successful companies in the iron ore and coal sectors. Previously, he has served as a director of two listed gold producers, and of companies with stock exchange listings in London, New York, Vancouver and Australia.

James Tyers – Chief Executive Officer

James Tyers is a member of the AusIMM and has more than 30 years of experience in the mining industry, holding senior management roles in gold and iron ore operations. He has been associated with the Palm Springs Gold Mine in the Kimberley region of Western Australia, and the Cornishman Project, a JV between Troy Resources and Sons of Gwalia. He has experience developing and operating iron ore projects in the mid‐west of Western Australia. He was responsible for developing the Las Lagunas Project and is the project director for the La Demajagua gold mine in Cuba.

Ugo Carlo – Non‐executive Director

Ugo Carlo has more than 30 years of experience in the Australian mining industry. Throughout his career, he has served in several senior leadership roles at Rocklands Richfield, Austral Coal and Conzinc Rio Tinto Australia Group. He is also a former director of the Port Kembla Coal Terminal, the New South Wales Joint Coal Board, and interim chairman of the New South Wales Minerals Council.

Angela Pankhurst – Non‐executive Director

Angela Pankhurst has more than 20 years of experience as an executive and non‐executive director, primarily in the mining industry. She has been a senior executive for companies with projects in Kazakhstan, Nigeria, Vietnam, South Africa and Australia. She has held senior leadership positions at Antilles Gold and Central Asia Resources. She is currently a director of Consolidated Zinc and a director of Imritec.

Tracey Aitkin – Chief Financial Officer

Tracey Aitkin is a professional member of CPA Australia and has more than 30 years of rich experience in finance, administration and staff management across a range of industries, including mining, manufacturing, retail, transport and agriculture. She joined the company in 2009 and was named CFO in 2010.

Dr. Jinxing Ji – Technical Director

Dr. Jinxing Ji is a seasoned metallurgist with six years of research experience in universities and 26 years of practical experience in the mining industry related to gold, silver, copper, zinc and lead. His broad experience includes due diligence, metallurgical test work, pre‐feasibility study, feasibility study, detailed design, plant commissioning support, and operational support for projects in Turkey, Greece, Canada, China, Romania, Brazil and Papua New Guinea.

Steve Mertens – Mining Director

Steve Mertens is a mining engineer with more than 20 years of industry experience across a range of commodities, including nine years based in Latin America. He has been associated with the Goro Nickel Project in New Caledonia and the Mina de Cobre Project in Panama. Prior to his current role as general manager for the Minera La Victoria JV company, he was the mining manager for Antilles Gold’s Las Lagunas operation in the Dominican Republic.

Chris Grainger – Exploration Director

Chris Grainger holds a PhD in economic geology from the University of Western Australia. He is an Australian geologist with more than 25 years of international experience with involvement in grassroots and brownfield exploration, as well as resource definition and development, with a focus on precious and base metals in South and Central America and the Caribbean. He has been associated with Continental Gold’s Buritica gold‐silver project, and Cordoba Minerals’ Alacran copper‐gold project.

*This article was written in collaboration with Couloir Capital.