Aguia maiden pour triggers gold rush at Colombian project

Six months after picking up the once-dormant uber high-grade Santa Barbara gold project in Colombia through its takeover of Andean Mining, Aguia Resources has successfully recommissioned a 30-tonne-per-day (tpd) pilot plant and triggered a gold rush with a maiden pour of the yellow metal. 

The initial pour - achieved in record time - kicked off much-needed cashflow at a critical time for Aguia as it pushes forward with ambitious expansion plans to increase its processing capacity by 66 per cent to 50tpd within the next three months.

Management says it is part way through ramping up production capacity, with the underground development continuing at a steady pace. Its onsite team is currently preparing the first high-grade production stope ready for mining. 

Aguia Resources executive chairman Warwick Grigor said: “It is only six months ago that Aguia completed the takeover of Andean Mining. Since then, it has prepared for and recommissioned the 30tpd pilot plant, achieving the first gold pour in what must be record time. Achieving this milestone on capital expenditure of less than $2m so far should be very pleasing to shareholders.”

With extensive underground rehabilitation now under its belt, including a new ventilation system, the company will shortly fire up the definition drilling rigs to extend the Santa Barbara and Mariana vein systems and build its resource base.

Regulatory constraints have stopped Aguia from officially referring to Santa Barbara as a ‘mine’ until JORC-compliant resources are established. The company also needs a maiden resource estimate before it can announce production guidance.

Management says historical exploration has confirmed gold-bearing quartz veins contain exceptionally rich mineralisation, with previous assays returning grades close to one ounce of gold per tonne. 

As part of its ongoing exploration efforts, Aguia has started to excavate a new crosscut from the Santa Barbara workings to remove a major bottleneck and provide a much-improved circuit to access deeper, untapped zones of the neighbouring Mariana system. 

The upgrade will also allow for underground material to be removed through the Santa Barbara adit.

With the existing above-ground treatment plant already operational, the company is pushing ahead with the construction of a new crushing circuit to grow production. The crushing circuit was designed by Medellin-based engineering and fabrication company Oro Sinu SAS.

The expanded circuit includes a run-of-mine bin, crusher feeders, conveyors, primary and secondary jaw crushers, a screen and a tertiary pulveriser crusher to manage oversized material. Four new agitation tanks have been added to allow for increased gold production.

Oro Sinu has already purchased ancillary equipment including a thickener, Merrill Crowe precipitation system, gold room equipment and several underground two-tonne wagons.

Aguia’s rapid development of Santa Barbara fits well with the company’s broader growth strategy of running multiple income producing resource projects in South America. 

It plans to use the cashflow from Santa Barbara to fund the capital requirements of its southern Brazilian Tres Estradas organic phosphate mine in Rio Grande do Sul, another near-production project.

With the full environmental approvals in its back pocket, Aguia believes it is on track to produce 100,000t of rock phosphate per year by the middle of the year, eventually ramping up to 300,000t per annum.

To keep its funding requirements low, the company recently revealed it had moved away from the idea of building its own processing plant. Instead, it has locked away a long-term lease on a nearby processing plant that needs minimal expenditure to get up to speed.

The shift appears a smart move, since a 2023 bankable feasibility study suggested that a standalone 300,000t production plant could have cost the company as much as $26 million to build.

The study also forecast annual earnings before interest, tax, depreciation and amortisation of $22m for an 18-year mine life with a payback period of just 2.9 years. Given the company has instead chosen to lease an existing plant, the project’s economics and rate of return look even better.

A year ago, Aguia was languishing in the backwaters of the ASX junior explorers index, with little money and a project bogged down in long term legal issues.

Wind the clock forward a year, and under its new stewardship, the company appears to be starting to make serious waves with cash coming into the kitty from Santa Barbara, backed by a runaway gold price, which is currently trading just shy of its all-time highs at US$2760 (A$4423) per ounce.

If it is able to get production up and running by mid-year at its Los Tres phosphate project, 2025 could shape up to be a game-changing year for Aguia.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au