20-F/A: Aura Almas Project: Reserves Up, Production Targets Rise

Aura Minerals' Almas Project in Brazil reports significantly increased gold reserves and positive economics, driven by expanded operations and higher gold prices.

Summary

• The Almas Project has a 12-year mine life, from 2026 to 2037, with open pit mining until Q1 2033 and underground mining from Q4 2026 to 2033.
• Total Mineral Reserves increased by 72% in tonnage to 33,878 kt and 32% in contained gold to 891 koz Au compared to the 2024 estimate.
• The average reserve grade decreased by 25% from 1.07 g/t Au to 0.82 g/t Au, primarily due to lower open-pit cut-off grades and the inclusion of Paiol Underground reserves.
• The processing plant's peak throughput is targeted at 3,000 ktpa (3 Mtpa) starting in 2027, up from 2.0 Mtpa in 2025.
• In 2025, the mine produced approximately 57,827 ounces of gold from 2.0 million tonnes of mill feed, with an average gold head grade of 1.01 g/t and an average gold recovery of 88.5%.
• The project's after-tax Net Present Value (NPV) at a 5% discount rate is approximately US$1,190 million, with an undiscounted after-tax net cash flow of US$1,536 million.
• All-in Sustaining Costs (AISC) are estimated at US$1,451/oz Au produced, with cash costs at US$1,250/oz Au produced.
• Expansion capital costs total US$95 million, including US$43 million for plant expansion, and life-of-mine sustaining capital totals US$136 million.
• Mine closure and reclamation costs are estimated at US$24.3 million for the entire project.

Sentiment

Score: 8

Explanation: StockSavvy.ai views this as a strong positive update, reflecting significant growth in gold reserves, robust project economics, and clear plans for operational expansion and underground development. The identified risks and lower-than-expected recovery are noted but appear manageable within the broader positive context.

Positives

• Mineral Reserves increased significantly by 72% in tonnage (33,878 kt) and 32% in contained gold (891 koz Au) compared to the previous year.
• The project demonstrates strong economic viability with an after-tax NPV of US$1,190 million at a 5% discount rate and an undiscounted after-tax net cash flow of US$1,536 million.
• A 12-year mine life (2026-2037) is projected, providing long-term production stability.
• The processing plant is planned for an expansion to 3 Mtpa throughput by 2027, indicating growth potential.
• Underground Mineral Reserves for Paiol are reported for the first time, adding 4,817 kt at 1.16 g/t Au, diversifying mining methods and extending mine life.
• The project's All-in Sustaining Costs (AISC) of US$1,451/oz Au are competitive within the industry.
• Environmental geochemistry studies indicate a low potential for acid rock drainage (ARD) or metals leaching (ML).
• Aura Minerals is benefiting from a reduced Brazilian Corporate Income Tax rate of 15% due to tax incentives from SUDAM.

Negatives

• Average gold recovery in 2025 was approximately 88.5%, which is below the long-term design expectation of 92.5%.
• The metallurgical behavior of underground ore has not yet been confirmed through domain-specific test work, leading to a conservative 85.17% recovery assumption.
• The Quality Control (QC) sample insertion rate is below the levels defined in the company's protocols, requiring an increase to meet expected rates.
• Permitting for the Cata Funda deposit was suspended in November 2025 to address documentation gaps, with resumption anticipated in the second half of 2026.
• Some variability and outliers were noted in Certified Reference Materials (CRMs) in QA/QC data, although not considered material to the MRE.

Risks

• The project's after-tax NPV is highly sensitive to metal prices, head grades, and metallurgical recoveries, with a 10% reduction in metal prices reducing NPV by 17%.
• Timely approval of operating licenses for Paiol Underground, Cata Funda, and Vira Saia is essential to maintain the projected production schedule and avoid disruptions.
• The Cata Funda Waste Rock Storage Facility (WRSF) does not have sufficient capacity for all projected waste, requiring evaluation of alternative disposal strategies.
• The current underground dewatering system, relying on a chain of pumps, could be interrupted by a single pump failure, although the mine is characterized as generally dry.
• The TSF capacity increase to 23.7 Mm³ requires a new permit, which is part of the consolidated EIA submission planned for H2 2026.
• The airflow requirement for underground operations is at the lower end of the expected range for this scale, requiring rigorous ventilation management.
• Lack of a redundant power feed for underground operations poses a risk of full power outage, impacting ventilation, pumping, and life-safety systems.

Future Outlook

Aura Minerals plans to expand the processing plant to achieve a throughput of 3 Mtpa by 2027. Initial underground production at the Paiol mine is scheduled for 2028, with open pit mining at Vira Saia starting in 2027 and Cata Funda in 2030. The company anticipates continued optimization of processing parameters to improve gold recovery towards targeted levels and will undertake dedicated metallurgical test work for underground ore.

Industry Context

StockSavvy.ai notes that the Almas Project's significant increase in Mineral Reserves and robust economic indicators align with a positive outlook for gold producers, especially given the current strong gold price environment. The strategic focus on expanding existing operations and developing underground resources reflects a common industry strategy to maximize asset value, extend mine life, and diversify production sources. The planned plant expansion to 3 Mtpa positions Aura Minerals for increased scale and potential economies of scale, a trend observed among mid-tier producers aiming to enhance their market position.

Comparison to Industry Standards

• StockSavvy.ai observes that the Almas Project's All-in Sustaining Costs (AISC) of US$1,451/oz Au are competitive within the gold mining industry, particularly for a mid-tier producer operating in Brazil. This compares favorably to the average AISC for gold miners, which often range from US$1,200 to US$1,600/oz, indicating efficient operations.
• The projected 12-year mine life is a solid duration for a gold project, providing long-term cash flow visibility, comparable to other established gold mines globally.
• The planned expansion of the processing plant to 3 Mtpa throughput is a significant increase, positioning Almas to achieve economies of scale similar to other growing gold operations, such as Equinox Gold's Santa Luz or Kinross Gold's Paracatu operations in Brazil, which also process large volumes of lower-grade ore.
• The average gold recovery of 88.5% in 2025, while below the long-term design of 92.5%, is within a reasonable range for Carbon-in-Leach (CIL) plants processing similar orogenic gold deposits, though continuous optimization is expected to bring it closer to design targets.
• The first-time reporting of underground Mineral Reserves at Paiol, with a higher average grade of 1.16 g/t Au, indicates a strategic move to higher-value ore, a common practice in mature open-pit mines transitioning to underground extensions, similar to what has been seen at operations like Gold Fields' South Deep mine in South Africa or Kirkland Lake Gold's Fosterville mine in Australia.

Stakeholder Impact

• Shareholders: Benefit from significantly increased Mineral Reserves, strong economic viability (high NPV), and a long mine life, indicating potential for sustained returns.
• Employees: Benefit from continued operations, planned plant expansion, and the development of underground mining, which suggests job security and potential for new employment opportunities.
• Local Communities (Almas, Quilombola communities): Impacted by mining activities, but benefit from community investment programs, employment opportunities, and ongoing community engagement efforts by Aura Minerals.
• Suppliers and Contractors: Benefit from ongoing operational needs, including mining services, consumables, and maintenance, as the project expands and continues production.
• Creditors: The strong economic viability and positive cash flow support the company's ability to meet its financial obligations.

Next Steps

• Develop and execute a standard protocol for treating missing intervals and analytical values in Mineral Resource estimation.
• Refine grade restriction approaches using statistical and visual tools to better preserve high grades locally.
• Incorporate new drilling results into the Vira Saia model and generate a robust geological framework.
• Conduct close operational follow-up for Paiol Underground, Cata Funda, and Vira Saia permitting processes to ensure alignment with the planned mine sequencing.
• Reassess slope design parameters for saprolite and weathered rock domains in all three open pits to ensure consistency with recommended angles.
• Implement a comprehensive underground metallurgical test work program to validate the 85.17% recovery assumption for underground ore.
• Evaluate bottlenecks in the grinding and classification circuit to ensure adequate particle size control as throughput approaches 2.7 Mtpa.
• Complete commissioning and performance verification of the thermal carbon regeneration system prior to full Phase 3 ramp-up.
• Continue with permitting of the Cata Funda and Vira Saia areas.
• Formalize management systems for environmental and social aspects to incorporate a full Plan-Do-Check-Act cycle.
• Continue active community engagement to address concerns related to Cata Funda and Vira Saia's proximity to local communities.
• Enhance cost tracking and financial planning by monitoring real-time expenditures and updating sensitivity analyses.

Key Dates

Recommendation

The substantial increase in Mineral Reserves (72% tonnage, 32% contained gold), particularly the first-time reporting of underground reserves, coupled with a robust after-tax NPV of US$1.19 billion and a 12-year mine life, signals significant long-term value creation. The planned plant expansion to 3 Mtpa and positive economic analysis, even with conservative recovery assumptions for underground ore, position Aura Minerals for sustained production growth and strong cash flows in a favorable gold price environment. While permitting delays for some deposits and lower-than-expected recovery are noted, these appear manageable within the broader positive context, making the stock an attractive investment.

Keywords

Gold mining, Mineral reserves, Mineral resources, Brazil, Almas Project, Gold production, SEC filing, Mining economics, Metallurgical recovery, Underground mining, Open pit mining, Capital costs, Operating costs, Environmental permitting, Tailings storage facility