Canadian junior exploration company Denarius Metals has officially started mining activities at its Zancudo gold-silver project in Colombia.
The first production from the project is anticipated in the second quarter of 2025 (Q2 2025).
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This milestone reflects the company’s efforts throughout 2024 to advance the project’s development and construction, secure the necessary mining licence and gain approval for the environmental impact study (EIS).
In 2024, it prioritised the Zancudo and Aguablanca projects in Spain, with both expected to start operations within the next 12 months, thus providing internal cash flow.
The company also announced that the European Commission has recognised Aguablanca as a strategic project.
Denarius Metals has secured the long-term economics of its projects by signing offtake contracts with global companies for 100% of concentrate production.
An eight-year contract with Trafigura for Zancudo’s gold-silver concentrate and an agreement with Boliden Commercial for Aguablanca’s nickel-copper concentrate were signed in 2024.
Additionally, a prepayment agreement with Trafigura in February 2025 provided $2.5m (C3.6m) upfront, with up to $6.5m more expected as construction milestones are reached at the Zancudo project.
The Zancudo project’s development plan, executed by the company’s mine contractor, aims to open four primary fronts within the next four to six months.
Concurrently, early production activities have commenced, with mining already under way in accessible areas.
The contractor is stockpiling ore on-site, with deliveries to Trafigura under an offtake contract set to begin by the end of April.
All processing plant equipment has arrived and is stored at the site, with earthworks starting soon and installation of the plant scheduled over the summer. The plant is set to commence operations by Q4 2025.
To mitigate the impact of permitting and licensing delays experienced in 2024, Denarius Metals improved its financial liquidity by amending the terms of its convertible debentures and selling a 29% equity interest in Rio Narcea Recursos (RNR), Aguablanca project’s owner, back to the RNR Shareholder Group, retaining a 21% fully paid equity interest.
In December 2023, Denarius Metals signed a definitive agreement to acquire a 50% stake in RNR for a cash consideration of €25m ($27m).
