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Brazil-focused mining company Ero Copper (TSX: ERO, NYSE: ERO) has provided an update to the mineral reserve and resource estimates along with a life-of-mine (LOM) production plan for its Xavantina gold operations located in Mato Grosso state.
The latest mineral reserve and resource update incorporates drilling activities through September 30, 2022, while mining depletion has been updated through the effective date of the estimate, October 31, 2022.
Compared to the 2021 estimate, proven and probable reserves at Xavantina have increased by 18% to 362,000 oz., including a 15% increase at the Santo Antônio vein and a 45% increase at the Matinha vein. This reserve estimate represents a compound annual growth rate (CAGR) of approximately 95% from 2018 to 2022.
There is also a 22% increase in measured and indicated mineral resources at Xavantina, inclusive of mineral reserves, as compared to the 2021 estimate. The M+I resource is estimated at 1.3 million tonnes averaging 10.7 g/t gold for 436,000 oz. of contained gold. Inferred resources amounted to 441,000 tonnes grading 8.5 g/t gold for 120,000 oz.
“Since acquiring the mine in 2016 with no mineral reserves, no mine life and approximately 25,000 ounces of annual gold production, we have added significant value to this operation through our investments in exploration and underground infrastructure,” Ero Copper CEO David Strang stated, adding that Xavantina is expected to produce over 50,000 oz. of gold this year.
“Importantly, we continue to see strong additional exploration potential at both the Santo Antônio and Matinha veins as well as across our regional exploration targets,” he added.
Moving forward, Strang said the hope to identify an additional vein that can serve as a third source of ore for the Xavantina mill, which would allow the company to achieve potential throughput rates of up to 300,000 tonnes per annum.
With the added mineral reserves and resources, the LOM has now been extended to 2028, and the Xavantina operations are expected to achieve over 60,000 oz. of gold production beginning in 2024 following the commencement of production from the Matinha vein in the second half of 2023.
According to Ero Copper, the updated LOM production plan reflects an 8% increase in projected mill head grades when compared to the same-year projections outlined in its 2022 five-year outlook. An excess mill capacity of approximately 25% is also expected to offer further expansion potential, the company said.
Xavantina, formerly known as the NX gold mine, is situated approximately 670 km east of the capital city of Cuiabá, consisting of fully integrated underground mining and processing facilities. Current mining operations are focused on the Santo Antônio vein.
The first regional exploration program at Xavantina commenced in early 2021, focusing on the underexplored, 31,716-hectare land package held by Ero Copper. The company owns a 97.6% interest in the gold mine.
Shares of Ero Copper shot up 3.5% by 12:15 p.m. Toronto time, giving the Vancouver-based company a market capitalization of C$2.2 billion ($1.6bn).
