INVESTING USD4-8 MILLION IN EXPLORATION

Mexico 2020 | ENERGY | VIP INTERVIEW

TBY talks to Rodrigo Barbosa, CEO of Aura Minerals, on Mexican mining, the “360-degree mining” concept, and safety considerations.

What role does Mexico play within Aura Minerals' international business strategy, and why did the company decide to invest here?

When I joined Aura Minerals, we had projects in Honduras and Brazil. Mexico was not the best place to do mining because of past losses and problems. Today, Mexico is becoming one of our major operations, and the more we learn about the country, the more we see it is a top-tier place to invest in the world. Based on our analysis and learning since we reopened our operations here, we like three things about Mexico: it is a natural mining country—it has great mines; it has all the mining infrastructure, suppliers, parts, technology, and know-how, together with excellent labor; and all the legal framework and processes for acquiring and renewing permits and concessions are in place. Certainly, there is room to improve, though when we compare it to other countries, Mexico has a good transparency and straightforward process. We are currently looking for opportunities either to invest in other projects in Mexico or to expand our existing production. Aura Minerals has come to stay and grow in Mexico.

What have been the main advancements in the Aranzazu mine since Aura Minerals restarted its operations in December 2018?

We had a great start for the first three to four months where we saw opportunities to fast track production at Aranzazu Mine. However, we had a bump from the fourth to the seventh month where we had to learn how to work more closely with our contractors. We needed better communication and planning together as well as a better understand of our respective responsibilities and the decision-making process. Now, we are on the right track. On some of our numbers, we are ahead of our initial plan. Aranzazu Mine is a difficult mine; it is not as rich as our neighbors. Its copper grades are not that high compared to other mines. We have thinner veins, meaning we have to be more precise about where we mine. However, our team has been adept at understanding and adjusting to the complexity and has been successful in dealing with a more difficult mine.

When will Aura Minerals invest in exploring its early stage targets?

In the first year, we focused on how to restart the Aranzazu Mine and did a precise and detailed plan for this. In the second year, we did the restart and focused on an efficient ramp up before starting production. Now, as we move into the third year and phase, it is about how we expand our geological understanding and hopefully increase our operation management to double capacity, though that would take a few more years. We are now close to 40 million pounds of copper equivalent per year production from Aranzazu Mine. With our projected increase of 20-30%, this would take production close to 50-55 million pounds of copper equivalent per year. However, it will take at least 12 months to start this increase in production. That is our mid-term plan because we have to do all the geological studies followed by the technical studies before ramping up production.

What is the main objective behind your 360-degree mining concept?

Aura Minerals has a concept called 360-degree mining, which is an intuitive approach. We are bringing in a different way of managing mining companies that has less structures, less layers, and less centralized decision-making processes. To do this, you have to create an environment where middle managers really understand the values of the company and how they should make decisions, hence 360-degree mining. Managers have to ensure they have fully analyzed the impact on the environment, society, and communities as well as our employees before making a decision. Those are the three major angles they have to look at. Then, they need to consider the values inside each of these three categories. For example, one of the values we are promoting is safety as a priority. Another is how to hire staff, manage the best talent so they can grow and progress within the company, and help those who perform badly to improve or go. Once one has an understanding of this 360-degree management approach and its underlying values, it leads to fast decision making. We are still in the process, though the results have been extremely positive. We have mapped everyone in the company, and everyone has their own development plan.

I saw that Aura has also reviewed it Mission and Vision, can you describe more about it?

Our impact over the communities and employee's safety is being discussed and considered in all our decisions. We are very focused on excellence in whatever we do, we want to be among the best with safety, community, operational efficiency, our employees and talent management. When you add all of it, we reached our new mission which is “To find, mine and deliver the planet's most important and essential minerals that enable the world and humankind to create, innovate, and prosper” and our Vision which is “To be one of the most trusted, responsible, well-respected and results-driven mining companies.” When you add the new Mission, Vision and the 360 degree than you can have a clear understanding about us and you can feel all of it in Aranzazu, for example.

Empowerment, opportunity and personal growth. How are Aura developing these 360-degree mining's concepts locally?

Empowerment means providing a rewarding and meaningful opportunity to the approximately 3,000 people in six countries, in a wide variety of trades and professions, from geologists and miners, to engineers, electricians, mechanics, accountants, information technology specialists, and more. We give employment preference to the people from communities where we operate. Over 85% of our workforce are local people. Creating job opportunities for them is one of the most powerful positive social benefits of our business, especially when we are able to offer new opportunities for women, youth, and residents of remote areas with limited alternatives. At Aura, we promote an inclusive and diverse environment where every professional is valued and respected for who they are, and has the opportunity to develop their potential

Mining is more than its employees. What are the programs created by Aura to improve local development?

The wealth generated from our mining activities helps to reduce poverty and contributes to improving well-being and prosperity where we operate. We work with local governments, community leaders, and NGOs to contribute to community needs: Local development, quality of life, and education. We believe investing in these areas is the best way for us to contribute to building self-sustaining communities that will continue to prosper after our operations end. For instance, in Concepción del Oro we work with the mayor and the National Employment Service to prepare people for the job opportunities at Aranzazu and other companies or to create their own business.

Safety is a challenge in mining industry. How does it work at Aura?

We engage with our employees to foster a culture prioritizing health and safety. At Aura, safety is the responsibility of our entire team: employees, partners, contractors, and suppliers. Create an environment where we never, under any circumstances, compromise on health and safety. By using effective risk management and resilient management systems, we believe the goal of Zero Harm for occupational health is achievable.