Why is Aurelia Metals (ASX:AMI) in news?

October 10, 2022 07:06 PM AEDT | By Sonal Goyal

Why is Aurelia Metals (ASX:AMI) in news? — Image source: © Agnormark | Megapixl.com

Feasibility study at Federation Mine

As per the company’s release, the company has recently completed the Federation mine feasibility study. Aurelia said that the feasibility study confirms that this mine is one of the great discoveries in the Cobar Basin in recent decades. The mine is located around 10km south of the company’s Hera Mine.

The company shared the economic and technical case for the Federation mine with a feasibility study NPV of AU$415 million. The IRR based on the spot price is 71%. The company registered a ZnEq grade of 16.7% at the mine.

According to the announcement, the company expects to gain final regulatory approvals for production activities by the mid of the calendar year 2023.

Talking about the Federation base metals project's funding, the company said it is assessing multiple options. The option comprises equity and debt at the asset and company level. It includes the potential for the introduction of a strategic partner.

The company reported that it has a cash balance of AU$46 million as of 30 September 2022 and has future operating cashflows.

Mineral resource and ore reserve update

Group mineral resource tonnage increased by 5% to 29Mt, and the group’s ore reserve tonnage increased by 30%. The increase in ore reserve was driven by the addition of maiden ore reserves for the Great Cobar and Federation deposits.
Mineral resource tonnage at Great Cobar has grown by 37%, and at Kairos, it has grown by 19%.
At Hera, the company expects ore reserve tonnage of 0.6Mt after mining depletion.
For Dargues, the company expects ore reserve tonnage of 0.4Mt after mining depletion.
For the Federation, the company said that it is expected to grow by incorporating drilling results from February 2022 onwards and drilling from underground.

Group production targets by Aurelia

The company has increased its group production target tonnage from 7.8Mt (30 June 2021) to 9.3Mt this year. It reflects an increase of 19%, driven by the completion of the Federation mine feasibility study.
At Peak mine, the peak production target NSR (net smelter return) has been increased to AU$240/t.

For Hera mine, the company said that it operates towards depletion.

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