RE:Aura to stop investing in Gold RoadAgree no big deal and a net positive. Gold Road was a big drag on cost per OZ and was losing money last report Gold Road production cost $2,100US oz. I was not a fan of Gold Road high US labour costs.
All other Aura mines under $900US oz. Gold Road had operational issues miners didn't want to be vaccinated for COVID and other labour issues, plus they coudn't find enough gold reserves. Smart not to take on Gold Road loan and in the end its not a big deal. Hopfully they can now put more attention into getting Almas built and into production, this is the reason I believe share price is down. Almas is the next big opportunity to increase production, remember even withought Almas, Aura is on pace for 260K ozs this year an increase of over +20% from last year. Current earnings forcast today for 2021 $1.27 per share and 2022 is $2.70 per share.
Analyst price target next 12mos $20.23.
Third quarter earnings to be released Nov 9th and conference call Nov 10th 9am-ET next week. From Aura press release this morning:
The Share Purchase was completed for nominal cash consideration of US$1 and the assumption by GMRC of liabilities owing to PPG Arizona Holdings LP (“PPG”), an affiliate of Pandion Mine Finance, LP, under an amended and restated pre-paid forward gold purchase agreement (the “A&R PPF”). Pursuant to the terms of the A&R PPF, GRMC is required to pay PPG approximately US$ 35 million in cash pursuant to scheduled payments (the “GRMC Debt”). The GRMC Debt is guaranteed by Z79, and secured by the Goad Road mine, as well as Z79’s ownership interest in GRMC. Aura is not a guarantor of the GRMC Debt. GRMC and Z79 are currently in discussions with PPG regarding the A&R PPF and alternatives.
Aura’s decision to stop investing in Z79 and GRMC is the result of the Company's decision prioritize capital allocation and management efforts to its much larger current operating assets (the San Andres gold mine in Honduras, the Ernesto/Pau-a -Pique gold mine in Brazil, the Aranzazu copper-gold-silver mine in Mexico) and its larger projects with higher potential, such as the Almas and Matupa gold projects in Brazil. Of the total 191,389 Gold Equivalent Ounces (“GEO”) produced by all Aura’s subsidiaries in the first 9 months of 2021, only 9,614 GEO came from the Gold Road mine (5% of total) and the Company’s management expectations were that the percentage contribution to total production at Gold Road would have continued to reduce once planned new projects are put in production in the coming years.