Antilles Gold Launches Construction at Nueva Sabana Copper Mine

Antilles Gold, an Australian Securities Exchange-listed company, has initiated construction at its Nueva Sabana copper and gold project located in Cuba. The project is being developed through a joint venture with Minera La Victoria, which is handling the preliminary construction activities.

The early works include creating an access road from the national highway, conducting earthworks for essential mine-site infrastructure, securing water supply, and establishing a high-tension power connection. These initial steps will pave the way for China’s Xinhai Mining, the engineering, procurement, and construction (EPC) contractor, to commence its on-site operations next month. Xinhai’s focus will be on laying the foundations for processing and support facilities, essential for the project’s success.

As part of its responsibilities, Xinhai is currently finalizing detailed engineering plans and coordinating the shipment of necessary equipment, vehicles, and accommodation structures from China. The EPC contract stipulates that the Nueva Sabana mine must be commissioned by the end of 2026.

Funding for the construction is being organized in a challenging financial environment, exacerbated by US sanctions that have hindered traditional project lending. Antilles Gold is providing a $5 million interest-bearing loan to Minera La Victoria to support site works and project management. This funding will be partially sourced from expected proceeds from the liquidation of its subsidiary EnviroGold (Las Lagunas).

In addition, Xinhai Mining will extend a credit facility of $17.1 million to Minera La Victoria by deferring part of its EPC progress payments. The joint venture also plans to secure an additional $8 million in gold loans from Asian and Australian investors, which will be repaid through sales of gold concentrate. Furthermore, the project is set to receive a $5 million prepayment against future concentrate deliveries.

All loan documentation and related security arrangements are currently being prepared by a Spanish law firm in collaboration with local Cuban associates, with completion anticipated within two months.

A financial analysis of the project’s initial 4.6-year stage, released in November, indicates that the mine could generate approximately $63 million in surplus cash within 20 months of commissioning, after repaying all loans. This projection is based on gold prices at $3,250 per ounce and copper prices at $9,250 per tonne. If metal prices rise to $4,000 per ounce for gold and $10,000 per tonne for copper, the total surplus cash could reach $164 million.

Brian Johnson, chairperson of Antilles Gold, emphasized that the commencement of construction, less than two years after securing the concession, highlights the project’s momentum despite the financing challenges. He noted that should strong metal prices continue, the retained earnings from the first two years of operations at Nueva Sabana could fully fund the joint venture’s next development project, the La Demajagua gold, silver, and antimony project.

As construction progresses, the focus will remain on establishing a robust operational foundation, ensuring that the Nueva Sabana project can meet its ambitious production goals and contribute significantly to the region’s mining landscape.