Aguia Resources is on the cusp of launching production at its high-grade Santa Barbara gold project in Colombia. The project, which was previously explored by other operators, is set to begin operations within weeks. Following Aguia’s acquisition of the asset in April, as part of its acquisition of ASX-listed Andean Gold, the company has made significant strides toward recommissioning the project. This move positions Aguia to exploit some of the richest gold-bearing veins discovered during prior exploration, offering potential for substantial returns.
Santa Barbara: A High-Grade Gold Opportunity
Santa Barbara’s gold potential has been well-documented, with previous bulk samples demonstrating impressive results. These samples were processed through a pilot plant at an extraordinary average grade of 20 grams per tonne (g/t) of gold. Some of the veins in the area have even yielded concentrations of up to an ounce of gold per tonne, making Santa Barbara one of the most promising high-grade gold deposits in the region. Aguia Resources intends to focus its initial efforts on these high-grade veins, which could generate substantial revenues from the outset.
Since acquiring the project, Aguia has moved swiftly to prepare for its revival. The company has already completed key infrastructure work, including the installation of a compressed air system, which is vital for the rehabilitation of the underground mining operations. The system, purchased in September, is now operational, ensuring that conditions are suitable for the continuation of the project’s underground development.
Underground Development: Unlocking Santa Barbara’s Potential
The groundwork for the Santa Barbara project was laid by previous operators, who discovered a series of high-grade gold-bearing quartz veins, particularly in the Mariana and Santa Barbara zones. These veins have an average grade of almost one ounce of gold per tonne, which positions them as a crucial element in Aguia’s plans for the project.
The company is making significant headway in underground development, with a new adit being constructed at the Mariana structure to allow access to deeper, untouched gold-bearing zones. Additionally, a crosscut passage from the Santa Barbara workings has been completed, linking it to the new Mariana development. This connection removes a key bottleneck and significantly improves the efficiency of material removal from the site.
Once the underground refurbishment is complete, Aguia expects the Santa Barbara project to ramp up production to 50 tonnes per day (tpd) at an average grade of 20 grams per tonne. This level of output would generate an estimated $125,000 per day in revenue, providing the company with a solid cash flow foundation as the project gains momentum.
A Comprehensive Approach to Expansion
Above ground, Aguia has been re-commissioning the existing 30 tpd processing facility to handle the material extracted from the underground workings. In parallel, the company is working on expanding the facility’s capacity to 50 tpd to accommodate higher production volumes.
To facilitate this expansion, Aguia has contracted Oro Sinu SAS, a Medellín-based engineering and fabrication company, to design and build a new crushing circuit. The new circuit will include several components, such as a run-of-mine bin, crusher feeders, conveyors, primary and secondary jaw crushers, a screen, and a tertiary pulverizer crusher to manage oversized material. Additionally, four new agitation tanks have been added to the system, which will increase the capacity for gold production.
As part of its infrastructure overhaul, Aguia has also purchased several pieces of ancillary equipment, including a thickener, a Merrill Crowe precipitation system, gold room equipment, and underground two-tonne wagons. These upgrades are designed to support the project’s long-term viability and improve efficiency.
The company has expanded the on-site camp to accommodate a larger workforce, with additional facilities such as a laboratory, medical center, and office spaces. This expansion of infrastructure is essential to support the increased activity at Santa Barbara as production ramps up.
Short-Term Cash Flow and Long-Term Growth
Aguia Resources’ primary focus in the short term is to bring Santa Barbara back online as quickly as possible, generating much-needed cash flow for the company. This short-term focus is critical as Aguia also advances its long-term strategy to become a significant player in the organic phosphate industry in southern Brazil.
Earlier this year, Aguia won a six-year legal battle with local ranchers who had attempted to block production at the company’s Tres Estradas mine in Rio Grande do Sul, Brazil. With this legal hurdle behind them, Aguia has also secured a long-term lease for a processing plant that will require minimal investment to bring online. With full environmental approvals in place, Aguia is now on track to produce 100,000 tonnes of rock phosphate per year by mid-2025, with plans to ramp up production to 300,000 tonnes annually over time.
Strong Economics Back Phosphate Project
Aguia’s phosphate project, located at the Tres Estradas mine, is expected to be a significant revenue generator for the company. A recent bankable feasibility study, which showcased the strong economics of the project, estimated that producing 300,000 tonnes per year over an 18-year mine life would generate $22 million in EBITDA annually. With a capital expenditure of $26 million, the project has an anticipated payback period of just 2.9 years, with a robust internal rate of return of 54.7%.
This high return on investment underscores the potential of Aguia’s phosphate business, which complements the company’s gold operations at Santa Barbara. By diversifying its revenue streams, Aguia is positioning itself for growth in both the precious metals and agricultural sectors, creating a more resilient and profitable business model in the years ahead.
Looking Ahead: A Bright Future for Aguia Resources
As Aguia Resources prepares to re-commence production at Santa Barbara, the company is poised to capitalize on the high-grade gold potential of the project. With underground development moving forward and a comprehensive expansion plan in place, Aguia is well-positioned to achieve its goal of ramping up production to 50 tpd. This, combined with the company’s growing phosphate operations in Brazil, sets the stage for significant growth and profitability in the near future.
Aguia’s ability to rapidly advance the Santa Barbara project and secure key infrastructure and approvals for its phosphate operations demonstrates the company’s strong execution capabilities. With a diversified portfolio and solid plans for expansion, Aguia Resources is a company to watch as it continues to unlock the value of its high-grade gold and phosphate assets.
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