Aura suspends mining and development at Aranzazu

Vancouver – After only a few months of operations Aura Minerals (ORA-T) is temporarily suspending all mining activities and development work at its copper-gold-silver Aranzazu project in Zacatecas state, Mexico.

Aura assumed control of Aranzazu in June and spent the first three months processing low-grade stockpiled ore while awaiting an explosives permit. In mid-September the company received the needed permit and has since been mining ore from the easily-accessible, low-grade Mexicana zone.

Company president and CEO Patrick Downey now says that current copper prices have rendered mining at Mexicana uneconomic. In addition, mining the Mexicana zone interrupted efforts to reach other, higher-grade zones because mining operations restricted development work.

The move is meant to allow Aura to preserve its cash resources while ensuring it will be able to deliver metals into a future metal market with better prices. The company says it is considering further operating or capital expenditure cuts, even though the move to suspend Aranzazu will save $400,000 per month. Aura will now spend the next three to four months reviewing its development plans for Aranzazu, all the time monitoring metal prices in order to determine when to re-commence development work.

Aura bought Aranzazu for $70 million in cash and shares in the summer and immediately embarked on ambitious expansion plans. At the time of purchase the mill at Aranzazu was processing 600 tonnes of ore daily; Aura has already increased that rate to 1,100 tonnes per day. The company was expecting to commission a third 600-tonne-per-day mill before the end of the year.

The company has also been developing a ramp to access deeper, higher-grade portions of the deposit. In addition, drilling efforts have delineated new mineralized zones within reach of current or planned underground workings. The two drill rigs that had been turning at Aranzazu, one on surface and the other underground, will now sit idle.

News of the Aranzazu suspension came out after markets closed. Aura, which has a 52-week trading range of 6.5¢ to $2, has been trading around the 16¢-mark in recent days. The company has 593 million shares issued.