Antilles Gold Launches Construction at Nueva Sabana Copper Mine

Antilles Gold has officially commenced construction at its Nueva Sabana copper and gold project in Cuba, as announced on Thursday. The initial phase of the project is being executed by Minera La Victoria (MLV), a joint venture equally owned by Antilles Gold and its partner. Current activities include the development of an access road from the national highway, earthworks for essential mine-site infrastructure, securing a reliable water supply, and connecting high-tension power lines.

These preparatory works are paving the way for the engineering, procurement, and construction (EPC) contractor, China’s Xinhai Mining, to begin its operations next month. Xinhai’s focus will be on laying the foundations for processing and support facilities at the site. The company is in the process of finalizing detailed engineering plans and coordinating the shipment of necessary equipment, vehicles, and accommodation structures from China.

Funding Strategies Amid Sanctions

Under the terms of the EPC contract, the Nueva Sabana mine is slated for commissioning by the end of 2026. To navigate the financing challenges posed by US sanctions, which have limited traditional project lending options, Antilles Gold has outlined its funding arrangements. The company is providing a $5 million interest-bearing loan to MLV, partly funded through anticipated proceeds from the liquidation of its EnviroGold (Las Lagunas) subsidiary.

In a strategic move, Xinhai will extend a $17.1 million credit facility to MLV by deferring part of its EPC progress payments. MLV also plans to secure an additional $8 million in gold loans from investors in Asia and Australia, which will be repaid from future gold-concentrate sales. Furthermore, it will receive a $5 million prepayment against concentrate deliveries. The legal aspects of these transactions are being managed by a Spanish law firm working with local associates, with completion expected within two months.

Projected Financial Impact

A financial analysis released in November indicated that the mine could generate approximately $63 million in surplus cash within the first 20 months of operation, after all loans are repaid. This projection is based on gold prices at $3,250 per ounce and copper prices at $9,250 per tonne. Additionally, the project could yield a further $101 million from copper and gold concentrate production. 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, expressed optimism regarding the project’s momentum. He noted that construction has begun less than two years after securing the necessary concessions, despite the ongoing financing challenges. Johnson also mentioned the potential for retained earnings from the Nueva Sabana project’s first two years of operations to fully fund the joint venture’s subsequent development—the La Demajagua gold, silver, and antimony project. This ambitious expansion reflects Antilles Gold’s commitment to advancing its operations in Cuba’s mining sector.