Is the Cuban regime’s gold rush over before it even started?

In its conclusive report for 2023, the Geology Directorate of the Cuban Ministry of Energy and Mines (MINEM) announced the completion of exploratory work two plus Sleepone of the following mineral resources About the island that has aroused the most interest In the last two years.

Much of this interest comes from prospecting reports issued by the Australian company Antilles Gold, which has discovered reserves of estimated value of that precious metal in Isla de la Juventud (at the La Demajagua mine) and Ciego de Ávila (in Have claimed. El Pilar Site).

The MINEM report indicates that it Geological exploration of the Oro Meloneras deposit in Villa Clara, “was an objective that had been in the geology plan for many years.” But work there resulted in a gold resource estimate “lower than estimated due to the high geological complexity of the deposit”.

Without giving details about these results, MINEM’s Geology Directorate said that at the end of 2021 the company Geominera Camagüey had completed the exploration of the Jacinto gold deposit in Camagüey. In June 2023, a techno-economic feasibility study of the deposit there was completed, concluding that it is “the second largest known gold deposit in the country.”

Is there reason to expect that in the near future these deposits will become a source of funding for the governance of the island? Determining the commercial value of a deposit depends on technical factors, laboratory tests and, above all, investors willing to take the risk of doing things that require time before they can generate dividends.

At the end of 2023, Antilles Gold had three projects in Cuba in the development stage. One of them involves restarting small mining operations in the Sierra Maestra, including the historic El Cobre deposit in Santiago de Cuba. The other two include the La Demazagua and El Pilar open-pit gold and silver mines.

Later, according to business reports last October, the Australian firm estimated the existence of 500,000 to 600,000 tonnes of gold with a recovery of 37.45 grams of the precious mineral per tonne.

In partnership with state-owned Geominera SA, with which Antilles has a joint venture, The Australian firm will submit a resource estimate for El Pilar this January. Next May, construction of the mining operation will begin, which will cost 20 million Australian dollars and last ten months.

And while reports of Antilles gold are full of optimism, the reality is not so clear. For example, in 2022 The mining company announced plans to begin construction of the La Demazagua open pit mine in October 2023. However, Antilles has not updated the progress of these works and has focused its promotional interest on the Ciego de Ávila project.

Similarly, last November the stock market publication stockhead reported that Antilles launched a fundraising campaign raising just over a million dollars To promote the development of both the projects.

According to that report, the Nueva Sabana mine, which includes several deposits in the El Pilar area, is “one of two short-term projects that the explorer has added to its portfolio for development in a half joint venture with a mining company in Cuba. Government, Geominera”.

According to that report, The construction phase of Nueva Sabana is scheduled to begin in June next yearAnd it will start producing gold ten months later, in March 2025.

According to La Demajagua, according to stockheadThe resources received from the sale of shares will also be used to conduct metallurgical testing for the mineral concentrate processing plant.

While waiting for this campaign to have the desired impact, it is worth asking: Is it worth it for investors to put their money in Cuba’s gold reserves?Are there better options closer to Central American countries?

For example, Nicaragua is experiencing a gold boom that has led exports of that mineral to exceed $1 billion in 2023. Since 2019, gold has been the country’s main export product, displacing coffee, a crop that had dominated economic activity, to the extent that there are agricultural exploitation areas that have been converted into mines.

The Observatory of Economic Complexity (OEC) ranked the Central American nation as the 50th gold exporter on the planet in 2021, placing it above its neighbors Honduras (83rd), Panama (93rd), Guatemala (135th), Costa Rica (141st) .) and El Salvador (160).

Daniel Ortega’s regime has granted approximately 300 mining concessions since 2007, with more than 100 being studied by the local Ministry of Energy and Mines. China is also among those interested in investing in this precious metals fever.

For its part, Antilles Gold already has the Las Lagunas deposit in the Dominican Republic, where it operates a plant with a processing capacity of 100,000 tons of mineral per year.

In its 2022 investment report, The Cuban government has shown that mining is a priority among the businesses it promotes.The fourth sector on its list is behind only tourism, manufacturing industries and real estate linked to transport, storage and communications.

However, just as the announcement of the discovery of large oil reserves on the Cuban shelf nearly two decades ago and the subsequent drilling and study in those areas did not make Cuba an oil exporter, It is unlikely that the island will see a gold rush in the short term. Once again everything is indicating that indifference will remain only in the news.