Antilles Gold Launches Construction at Nueva Sabana Copper Mine

Construction has officially commenced at the Nueva Sabana copper and gold project in Cuba, according to a report from Antilles Gold on Thursday. The early work is being executed by Minera La Victoria (MLV), a joint venture responsible for developing the project. Initial activities include building an access road from the national highway, conducting earthworks for mine-site infrastructure, securing water supply, and connecting high-tension power.

These preparations will enable Xinhai Mining, the contractor responsible for the engineering, procurement, and construction (EPC) package, to commence its on-site operations next month. The focus will initially be on laying the foundations for processing and support facilities. Xinhai is currently finalizing detailed engineering plans and organizing the shipment of necessary equipment, vehicles, and camp accommodations from China.

Financial Framework and Project Timeline

The EPC contract stipulates that the mine must be commissioned before the end of 2026. Under challenging financial conditions exacerbated by US sanctions, Antilles Gold has outlined its funding approach to ensure progress. A $5 million interest-bearing loan will be provided by Antilles to MLV, partly funded through expected proceeds from the liquidation of its EnviroGold (Las Lagunas) subsidiary.

Additionally, Xinhai will offer a $17.1 million credit facility to MLV by deferring a portion of its EPC progress payments. MLV is also planning to secure an extra $8 million in gold loans from Asian and Australian investors, which will be repaid from gold-concentrate sales. Furthermore, the joint venture will receive a $5 million prepayment against concentrate deliveries. The legal documentation related to these financial arrangements is being prepared by a Spanish law firm in collaboration with Cuban associates, with completion expected within two months.

Projected Financial Impact

A financial analysis released in November indicated that the first stage of the project, spanning 4.6 years, could generate approximately $63 million in surplus cash within 20 months of commissioning, after settling all loans. This projection is based on gold prices of $3,250 per ounce and copper prices of $9,250 per ton. An additional $101 million could be realized from copper and gold concentrate production. Should metal prices rise to $4,000 per ounce for gold and $10,000 per ton for copper, total surplus cash could reach an impressive $164 million.

Brian Johnson, chairperson of Antilles Gold, emphasized that the initiation of construction in under two years since securing the concession demonstrates the project’s significant momentum, despite existing financing challenges. He noted that if metal prices remain robust, retained earnings from the first two years of operations at Nueva Sabana could fully finance the joint venture’s subsequent development, the La Demajagua gold, silver, and antimony project.

The Nueva Sabana project is poised to play a crucial role in the development of Cuba’s mining sector, with Antilles Gold positioning itself as a key player in the industry.