ASX listed Antilles Gold is investing heavily in Cuba and is now at the pointy end of the newly emerging gold sector in the Caribbean nation and here’s why.
Cuba is the largest island in the Caribbean and is geographically close to the United States, however due to the political difficulties between Cuba and the USA during the last sixty years, geologists and explorers have not been able to study it in as much detail as other countries in the Central American region. Cuba has seen an exciting geologic evolution and is part of an active Caribbean tectonic island-arc chain and although there are no active volcanoes in Cuba today, it has had a turbulent geological past which is always a good thing when it comes to the discovery of mineral riches.
Numerous precious and base metals deposits, including extensive copper-gold prospects have already been found, however Cuba’s most important mineral resource to date is nickel. As of 2013, nickel reserves were estimated at 5.5 million tonnes, over 7 per cent of the world total. The country currently pumps out around 50,000 tonnes of nickel per annum, in addition to significant quantities of cobalt, manganese and chrome. Oil exploration in 2005 by the United States Geological Survey revealed that the North Cuba Basin could produce approximately 4.6 billion barrels of oil.
In recent years however Cuba has come to the wider attention of the mining community due to its significant endowment of gold, silver and base metals. Recently, multi-national commodity trader Trafigura and state-owned miner GeoMinera formed a joint venture that pounced on one such opportunity, proving up and commissioning the US$275 million Castellanos lead-zinc mine in the west of the country, in 2018.
However, despite many advanced base metals exploration targets that have been subject to exploration or small-scale mining in the past by Canadian, US, Russian, and Cuban companies, the island nation has basically been overlooked for mineral development by the international mining industry for decades.
Cuba’s early mining industry, like most other Central American countries in the region, began when Spanish explorers reached the Island in the early 16th century. The Spanish enslaved the local villagers and made them work the gold-rich placer deposits that were found on the island. Placer mining during this time was quite primitive, however because the deposits were virtually untapped, a considerable amount of gold was still found. After the placers were exhausted it was the lode sources that continued to produce. Today, there is only limited placer mining taking place in Cuba, however locals still work many of the same rivers and streams that were mined as early as the 16th century.
The gold deposits are generally hosted in igneous and metamorphic rocks, where free-milling gold is found in stained quartz deposits, though gold is also found associated with arsenopyrite, chalcopyrite, and telluride ores. There are several distinct mining districts in Cuba where gold has been mined. The Santa Clara area in central Cuba has mines that date back to the early Spanish conquest. San Jose is one of the larger mines in this district and produces free-milling gold in dirty quartz veins. Around the regional center of Camaguey, there are several mines including the Florencia Mine and this is the area that hosts Antilles’ Golden Hills concessions. Some very rich gold veins were discovered in this region and worked at numerous mines and prospects where veins were scattered and unstructured. The total production is unknown, however some of these discoveries were noted to be quite rich.
Gold and other minerals have been mined on Isla de la Juventud – the Isle of Youth – a small island approximately 100km south of mainland Cuba. Considerable quartz veins have been charted across the island which produced high-grade gold deposits in many locations. Antilles’ flagship La Demajagua gold/silver project is located on this island which boasts the historical Delita deposit with an estimated reserve of 1.5 million ounces of gold. Delita has previously been mined only on a modest scale, with artisanal operations and smaller mining groups having extracted high-grade gold ores via underground operations between 1947 and 1989. Since its closure, the mine has been subject to several exploration campaigns by Canadian explorers, generating a drilling database of more than 50,000m. Antilles originally began negotiations to acquire La Demajagua in late 2018 and finalized the transaction in August 2020.
Interestingly, Cuba is without the dense jungle encountered in many other countries in Central America so access is much easier. The climate of Cuba is considered semitropical, but the terrain varies depending on location.
With the recent change in US-Cuban relations, Cuba is becoming once again a prospecting destination for gold explorers around the world. From a jurisdictional point of view, the Cuban Government is now actively encouraging foreign investment in the mining sector, has acceptable foreign investment, mining and environmental laws and has approved an excellent fiscal regime for Antilles’ La Demajagua gold/ silver project – the company’s first mining development.
Incentives provided by the Cuban government include 15 per cent corporate tax waived for 8 years, no import duty on capital equipment, no withholding tax on foreign services or dividends, GST of 10 per cent reduced to 5 per cent and Government Gold Royalty fixed at 3 per cent. Additionally, the Cuban government has created a “proceeds account” in a European or Canadian bank to receive all project loans and receipts from gold sales, and to disperse payments directly to foreign suppliers, service providers, and lenders, as well as dividends to shareholders. This means that the only funds paid to Cuba will be for the payment of employees, local creditors, and Government charges.
Other international companies such as Toronto-based mining giant Sherritt International, John Deere and Mitsubishi are now successfully operating in the country and commodities trading company Trafigura has recently commissioned the US$300 million Castellanos base metals mine which was developed in a joint venture with GeoMinera.
Antilles has also gained exclusive permission to review all existing data and exploration results over several highly prospective copper/gold properties in Cuba and the company intends to engage an expert in Cuban geology to undertake an initial review before nominating the prospects it wishes to have included in a formal International Economic Assessment, which is equivalent to an exploration licence. The formal agreement will set out Antilles’ obligation and budget to fund a negotiated work program planned to conduct preliminary exploration on the prospects chosen. The carrot dangling at the end of the stick is that the appropriate mining concessions may be included in a joint venture for future development.
Antilles’ joint venture company for the La Demajagua gold mine development, Minera La Victoria SA, is now fully functional and is managing current exploration and mining activities which are centered on a 25,000m drilling program and the project’s bankable feasibility study. Management says the company intends to participate in the development of two or three mid-sized mines through the newly minted joint venture company.
Antilles recently agreed on a US$3 million work program and budget to explore and potentially develop the Golden Hills copper-gold project in the Guaimaro-Jobabo region, about 550km south-east of the capital Havana. The project is made up of three concessions covering an estimated 15-20km of strike, some 100km from the regional center of Camaguey. The Golden Hills concessions host a multitude of volcanogenic massive sulfide, or “VMS” deposits outlined by previous exploration. The shallow oxide portions of the three deposits were mined in the late 1990s by GeoMinera. Antilles’ first-pass evaluation of the deposits indicates that deeper, interconnected roots of the VMS system remain targets that have been largely untested by modern exploration. The Golden Hills gold-copper oxide deposits are seemingly underlain by a large mineralised system hosting several gold and copper enriched sulfide bodies. The deposit stratigraphy at Golden Hills can be traced along more than a whopping 7km of strike, with previous drilling by Canadian-based MacDonald Mine in the 1990s returning significant intercepts of disseminated to massive sulfide copper-gold mineralisation. However, most holes only penetrated to about 80m depth and may have merely scratched the surface of the VMS system.
Management is also looking at the possible development of multiple pits and a centralized concentrator based on five advanced projects in the region which will benefit the already planned Golden Hills exploration kick-off planned for early next year.
The NSW based company is helmed by mining industry veteran Brian Johnson who established Antilles Gold originally as PanTerra Gold back in 2006. Antilles is now crystalizing its strategy for growth in Cuba as its joint venture with GeoMinera now has a near term development on the horizon. The La Demajagua open pit mine expected to be commissioned in early 2024 could be followed by the establishment of a centralized concentrator to treat ore from five previously explored sulfide gold deposits at Guaimaro in southeast Cuba.
The La Demajagua mine site is entirely accessible from the port city of Nueva Gerona by 40km of paved two-lane highway. The site is connected to the electricity grid, water supply and fibre optic cable. The planned underground operations at La Demajagua would extend the mine life to approximately 16 years with the second stage benefiting from the installed concentrator and power station. Perth-based mining expert Cube Consulting has outlined a substantial “exploration target” for the historic mine pointing to the potential for a deposit of between 16 and 20 million tonnes at a grade of 2.3 to 2.7 g/t gold and a handy 17 to 23 g/t of silver. Utilizing Cube’s projections, the deposit may even host more than 1.2 million ounces of gold and 8.7 million ounces of silver. According to the company, metallurgical test work undertaken as part of previous feasibility studies indicates that the Delita ores can produce a concentrate grading as high as 50 g/t gold and 400 g/t silver, which could deliver more than 95,000 ounces of gold and 770,000 ounces of silver sales to Antilles per annum.
However, the golden ticket on the table for Antilles could potentially lie within the six mining concessions now under review that host numerous copper and copper-gold deposits – and it probably doesn’t hurt either that Antilles is one of the few western mineral explorers to have navigated its way through the political scene in Cuba, an underexplored jurisdiction that may well be harboring multiple mineral surprises.
This article on the Antilles Gold projects in Cuba first appeared on TheWest.com.au and is reprinted here by permission of the author.
Matt Birney, Managing Editor of Bulls N Bears and the former WA Opposition Leader. Bulls N Bears reports sponsored ASX listed company news as it happens related to small and mid-cap companies.