News Summary
On December 8, 2025, Aura Minerals announced the results of a positive Feasibility Study (FS) for its 100%-owned Era Dorada Gold Project in Guatemala. The study outlines a fully-licensed underground mining project with the following key metrics:
– Mineral Reserves: Proven and Probable Mineral Reserves of 1.75 million gold equivalent ounces (GEO) at a grade of 6.23 g/t AuEq.
– Production: Average annual production of 111,000 GEO for the first four years, with a Life of Mine (LOM) of 16.8 years.
– Capital Costs: Initial implementation CAPEX is estimated at US$382 million.
– Operating Costs: Average LOM All-In Sustaining Cost (AISC) is projected at US$1,178 per ounce.
– Economics: The project demonstrates robust financial metrics with an after-tax Net Present Value (NPV) at a 5% discount rate of US$1,344.5 million and an after-tax Internal Rate of Return (IRR) of 35.6%. The payback period is 2.82 years.
– Assumptions: The base case financial model uses a gold price of US$3,177/oz and a silver price of US$37.2/oz. At spot prices of US$4,200/oz gold, the CEO notes the after-tax NPV increases to US$2.17 billion with a leveraged IRR of 68%.
Material Impact
The release of the Feasibility Study for Era Dorada is a material and positive development, serving as a significant de-risking event for what is now the company’s flagship growth project. This study successfully converts a large portion of the previously defined Mineral Resources into bankable Mineral Reserves and lays out a clear path to production.
Comparison with Previous PEA (June 9, 2025):
– De-risking: The progression from a Preliminary Economic Assessment (PEA) to a Feasibility Study represents a major step forward, increasing the level of engineering, confidence in cost estimates, and overall project definition.
– Production Profile: The FS outlines a stronger initial production profile (111k GEO/year for 4 years) compared to the PEA (91k oz Au/year for 4 years).
– Capital Costs: A key risk highlighted is the substantial increase in initial CAPEX, which has risen by 45% from US$264 million in the PEA to US$382 million in the FS. While this reflects higher accuracy, it also represents a larger funding hurdle.
– Economics & Gold Price: The project’s economics are compelling but are heavily leveraged to the high gold price assumption of US$3,177/oz, a significant increase from the PEA’s $2,410/oz base case. While reflective of the current market in this timeline, it exposes the project’s valuation to gold price volatility.
Context of Historical Performance:
The positive FS follows a string of successful execution milestones for Aura, which builds significant management credibility.
1. Borborema Mine: Achieved commercial production in September 2025, on time and on budget, and is now contributing to the company’s production profile. This was a critical deliverable that management successfully executed.
2. MSG Mine Acquisition: The acquisition of the Serra Grande mine was announced in June 2025 and successfully closed on December 1, 2025, just a week before this FS release. This adds another producing asset and demonstrates the company’s ability to execute on its M&A strategy.
3. Financial Strength: The company completed a ~US$218 million IPO on the Nasdaq in July 2025, bolstering its balance sheet to fund these growth initiatives. As of Q3 2025, the company maintained a strong balance sheet with $351 million in cash and low net debt.
In conclusion, the FS solidifies Era Dorada as the next major pillar of growth, following the successful commissioning of Borborema and the acquisition of MSG. It provides a clear line of sight for Aura to achieve its stated goal of producing over 450,000 GEO annually. While the increased CAPEX and reliance on high gold prices are points of caution, the de-risking of the asset and management’s proven track record make this a materially positive event.
Catalysts
– Immediate: Analyst ratings and target price revisions following the release of the robust FS economics.
– Project Financing: Details on the financing plan for the US$382 million CAPEX. Given the company’s low leverage, a combination of cash flow, existing cash, and project debt is expected.
– Final Investment Decision (FID): A formal decision from the board to proceed with construction of Era Dorada.
– Operational Integration of MSG: Updates on the operational turnaround and integration of the newly acquired Serra Grande (MSG) mine.
– Q4 and Full-Year 2025 Results: Financial results will show the first full quarter of contribution from the Borborema mine and provide updated 2026 guidance, which will be critical for valuing the expanded production profile.
Materiality Conclusion
The news is rated Material – Positive. The Feasibility Study confirms a multi-billion dollar valuation for a key growth asset, converts resources to reserves, and solidifies the company’s path to becoming a mid-tier producer. This milestone, combined with management’s stellar execution track record, outweighs the concerns over increased capex and reliance on high gold prices.
