Aura Minerals (TSX: ORA) has entered into a new and improved offtake agreement with Trafigura following a competitive bidding process with respect to copper and gold concentrate produced at the company’s Aranzazu mine.
This agreement is effective as of the beginning of 2022 and continues until the end of 2024. The company’s current offtake agreement in place with IXM Metals will remain in force until the end of 2021.
As result of the improved market conditions for copper, Aura expects Aranzazu to achieve “material savings” under the new agreement, improving gross margins by 4 percentage points compared to the existing deal.
“In 2018 our priority was to restart Aranzazu under a detailed and sustainable production plan. Since we restarted the project last year, we have been investing in geology and exploration in order to increase the life of mine as well, besides optimizing operational efficiencies. As result, we have been able to exceed initial expectations set in the feasibility study for certain KPIs, such as recoveries and dilution,” Aura president and CEO Rodrigo Barbosa commented.
During the past quarter, Aranzazu experienced an increase in production compared to the previous quarter as well as the third quarter of 2019. Production totals for Q3 2020 were 5,881 oz gold and 6,921 klb copper.
Shares of Aura Minerals were up 3.6% as of 1 p.m. ET Thursday. The company has a market capitalization of C$919.6 million.