La Demajagua Gold/Silver Project

The La Demajagua mineral deposit which incorporates the dormant Delita Mine has been assessed by Western Australian mining consultants, Cube Consulting, to have an Exploration Target in the following range:

LA DEMAJAGUA EXPLORATION TARGET (above 1.0 g/t Au)

Tonnes Grade (Au g/t) oz Au
Lower 16,000,000 2.3 1,200,000
Upper 20,000,000 2.7 1,700,000
LOWER
Tonnes 16,000,000
Grade (Au g/t) 2.3
oz Au 1,200,000
Grade (Ag g/t) 17
oz Ag 8,700,000
Tonnes Grade (Ag g/t) oz Ag
Lower 16,000,000 17 8,700,000
Upper 20,000,000 25 14,800,000
UPPER
Tonnes 20,000,000
Grade (Au g/t) 2.7
oz Au 1,700,000
Grade (Ag g/t) 25
oz Ag 14,800,000

Cube Consulting have designed a 25,000m drilling program to add to data available from 50,000m of historic drilling to establish resources for the planned Stage One open pit mine.  (refer ASX Announcement  10 November, 2020)

A Preliminary Feasibility Study for Stage One, including the drilling program, is expected to be completed in Q3 2021.

Location La Demajagua Gold/Silver Project

Open Pit Mine & Concentrate Production

Antilles Gold holds 49% of Cuban registered company, Minera La Victoria SA (“MLV”), which is currently carrying out feasibility studies to confirm the viability of developing an 800,000 tpa open pit mine at La Demajagua to produce approximately 60,000 tpa of refractory concentrate.

The planned 6 year mine life is expected to be followed by a 10 year underground operation at a reduced production rate.

The Cuban Government’s mining company, GeoMinera SA, holds 51% of MLV.      

As part of its due diligence process before entering into the La Demajagua Joint Venture, Antilles Gold had access to data from 50,000m of historical drilling undertaken primarily by reputable Canadian mining companies.

This data was used by Antilles Gold’s consultants to establish non JORC compliant resources for the La Demajagua ore body and a basic mine plan.

The Company has undertaken a Preliminary Economic Assessment (“PEA”) of the capital and operating costs to produce 60,000 tpa of refractory concentrate that indicated attractive commercial results.

Based on testwork by a major Canadian metallurgical research group, the grade of the La Demajagua concentrate is expected to be in the order of 48g/t Au and 380g/t Ag with a relatively high arsenic content.

For the purposes of the PEA it was assumed the La Demajagua concentrate will have a value similar to that advised by a Chinese smelting company permitted to import and process concentrate with high arsenic content.

The PEA indicated a total capital cost for developing the planned Stage One open pit mine, concentrator, and power station to be approximately US$73 million including the cost of feasibility studies, project management and administration, and interest during construction.

Projections of profitability and the estimated NPV for the project cannot be reported prior to establishing JORC compliant Indicated Resources which are expected in Q3 2021.

The Definitive Feasibility Study (“DFS”) for the project is expected to be published in September 2022 with construction completion and commissioning targeted for the end of 2023.

Antilles Gold will contribute US$13.0 million of equity to the Joint Venture company during 2021/2022 for its 49% shareholding of the Stage One open pit operation. Of this amount, approximately US$7.0 million will be spent on feasibility studies, project management, and administration, and the balance on mine infrastructure.

Antilles Gold is responsible for arranging approximately US$60.0 million of financing for the project.

It is anticipated that around half of this amount will be provided by credit from suppliers of plant and equipment for mining, the concentrator, and power station.

Doré Production

Antilles Gold intends to evaluate the possibility of constructing a 100,000 tpa Albion/CIL process plant at either La Demajagua, or possibly Las Lagunas in the Dominican Republic, depending on the outcome of ongoing US sanctions against Cuba, and the availability of project finance for either location.

If a plant is developed it would operate as a processing hub for regional concentrates, and the second generation design would incorporate modifications found necessary at the Group’s first Albion/CIL project at Las Lagunas and incorporated in the plant subsequently installed by the Albion patent holder, Glencore Technology, in Armenia. 

The Armenian plant  recovers 95% of gold from a clean arsenopyrite concentrate similar to that which will be produced at La Demajagua.

Selected plant and equipment including a sophisticated and well maintained oxygen plant from the Group’s completed Las Lagunas tailings retreatment project could be incorporated in the new plant.

The PEA undertaken by Antilles Gold for a 100,000 tpa Albion/CIL processing plant was based on a 10 year project life with 60,000 tpa of concentrate being supplied from the La Demajagua mine and 40,000 tpa by an international metal trader interested in supporting the concept of developing a processing hub for regional concentrates.

Las Lagunas Albion/CIL Plant, Dominican Republic

History of the Delita Mine

The La Demajagua gold/silver project on the Isle of Youth approximately 60km south of mainland Cuba incorporates the historic workings of the Delita mine.

Mining in Cuba

Cuba has a history of mining dating back to at least the days of Columbus and the Spanish settlement that followed.  The geology of the island is varied giving rise to different types of mineral deposits scattered across the island.  During the past century, a number of metal mining centres have been developed to exploit these deposits.

Cuba has some of the world’s largest deposits of nickel, cobalt, manganese and chromium.  The US Bureau of Mines estimates that Cuba hosts 40% of the world’s nickel resources.

Sherritt Gordon of Canada has maintained a nickel refining operation in Cuba for over twenty five years.

More recently, the EMINCAR joint venture between Trafigura and the Government’s mining company GeoMinera, commissioned the US$275 million Castellanos base metals mine in 2017/18, and increasing interest from international mining companies in participating in the emerging mining sector is evident with a number of mining and exploration joint venture agreements signed in the past three years.

Site Location

The dormant Delita mine and associated gold deposit is located on the Isle of Youth and is accessible from the port town of Nueva Gerona by 40km of paved two-lane highway.  The property is about 4km inland from tidewater on the west side of the island.

The property, which is at an elevation of a 20m above sea level, lies in a gently rolling landscape with no major relief.

Delita History

The Delita deposit was discovered around 1900 but it received only cursory attention until the 1920s when a North American company acquired the concession, but production was minimal until after World War ll.

In the period 1947 – 1950, approximately 60,000 – 70,000 t of ore were mined underground at Delita.  As mining progressed in depth, the material changed from shallow, oxide-zone material, to sulphidic arsenic mineralization.  Some reports suggest that 60,000 t were mined at a recovered grade of 14 g/t gold.  A 40 tpd beneficiation plant was constructed to drive off arsenic and sulphur, and concentrates were shipped offshore to a smelter for direct refining.  The property was abandoned in 1958 when the concentrator ceased operating.

During the 1970s and 1980s, regional exploration, mapping and geophysical surveys were conducted, and between 1977 and 1980, trenching and drilling were conducted on the Delita property.  This work expanded resources considerably.

Following a 1980 study, a new shaft was sunk and a flotation and gravity process plant constructed, with approximately 80,000 t of ore processed through the plant.  High recoveries of gold and silver, reporting to flotation and gravity concentrates, were achieved in the plant, which had a nominal 60-80 tpd capacity.  However, the inability to process the refractory concentrates prevented operations from being expanded to full scale production.

Concentrate product at the mine site effectively amounted to about 5000 t of 30-60 g/t Au, 15-30% As, and 20-30% S.

A 1,000 t experimental block was mined in 1984 to test mining conditions and provide material for metallurgical testing.  An auriferous arsenopyrite concentrate was produced but the operators were not able to market or process this material.

Pre-Feasibility Studies

Boliden Contech, working under a technical assistance program for Cuba, prepared a Prefeasibility Study of the Delita deposit in June 1990.  It was concluded that the project was not viable at gold prices prevailing at that time, primarily because the metallurgical treatment was likely to be expensive and a costly undercut-and-fill method was proposed for underground mining.

In May 1992, Minproc Engineers prepared a Prefeasibility Study of Delita for Matlock Mining NL of Australia.  Minproc evaluated metallurgical test work and concluded that the project was economically viable.

Minera Mantua SA acquired its interest in the Delita project in 1993 and engaged Davey Engineering to conduct a Preliminary Feasibility Study for the project, which was completed in March 1995.

In summary, Davey Engineering reported;

“Mine production schedules will allow a milling rate of 715,000 tpy (1,959 tpd) ore at an average head grade of 4.6 g/t gold from the combined open pit and underground operation.

The overall process is based on crushing and SAG milling run of mine ore, followed by flotation to produce concentrate which is to be fed to a pressure autoclave.  The residue will then be treated in a carbon-in-leach (CIL) circuit for gold extraction followed by stripping and electrowinning with gold and silver produced in the form of doré bar, which would be shipped off-shore for final refining to gold and silver bullion.  Tailings would be filtered and deposited with mine waste rock.”   

Minera La Victoria intends to mine underground at a mining rate of around 500,000 tpa for up to 10 years after completing open pit operations, and may use an Albion/CIL processing plant to produce doré rather than a pressure autoclave as proposed by Davey Engineering.

ANTILLES GOLD LIMITED
ASX CODE AAU
55 Kirkham Road
Bowral NSW 2576
Australia
+ 61 2 4861 1740
ANTILLES GOLD LIMITED
ASX CODE AAU
55 Kirkham Road
Bowral NSW 2576
Australia
+ 61 2 4861 1740