Antilles Gold faces cash pressure while Cuban mine restart remains blocked

Cuban mine restart remains blocked by US sanction

Antilles Gold Limited (ASX:AAU) has spent another quarter marking time in Cuba, after its 50%-owned joint venture company Minera La Victoria SA was designated a Specially Designated National by the US Treasury’s Office of Foreign Assets Control in June. The company suspended its direct participation in the venture’s administration and management while it assessed the consequences and possible remedies.

There was no construction activity at the Nueva Sabana gold-copper mine beyond site security, while no work was undertaken at the La Demajagua gold-silver-antimony project or the El Pilar and San Nicholas porphyry copper properties. The company’s June Cuban JV sanction had already halted Nueva Sabana engineering and construction, and the latest report confirms that the operational pause is continuing rather than being resolved.

GEM proposal offers conditional route to sanction relief

Antilles Gold says it has submitted a proposal to the US Department of State involving changes to the joint venture’s operation and structure. The stated aim is either to support the lifting of the sanction or secure an OFAC licence allowing Minera La Victoria to transact with US entities or people.

A binding August memorandum of understanding with Global Emerging Markets, described as a US$3.4 billion alternative investment group, is central to that effort. Subject to the sanction being lifted, a GEM subsidiary would subscribe US$18 million for a 25% stake in Antilles Gold Inc. GEM would also support a broader ownership restructure designed to put at least 51% of Antilles Gold Inc in US hands by 30 June 2028, alongside a board reconstitution involving a US independent chair and two GEM-nominated US directors.

GEM has applied to OFAC for a licence to negotiate with Minera La Victoria, Antilles Gold Inc and the Department of State. Those negotiations cannot begin until the licence is issued, leaving the proposed investment, governance changes and mine restart conditional on a regulatory step that has not yet occurred. The proposed arrangement would also retain surplus cash from the first two years of Nueva Sabana operations as equity for La Demajagua rather than distribute it as dividends.

Cash runway narrows as projects remain inactive

Antilles Gold reported US$882,000 in cash at 30 September, equivalent to A$1.262 million. The Appendix 5B records a US$348,000 operating cash outflow and a further US$383,000 invested as loans advanced to the joint venture during the quarter, partly offset by US$13,000 of net financing inflow and US$10,000 from exchange-rate movements. On its ASX cash-runway measure, which excludes the joint-venture loan advance, the company estimates 2.53 quarters of funding.

The company plans to minimise group overheads, reduce Havana office costs and maintain site security during the December quarter. It also says it will continue negotiations aimed at lifting the sanction so Nueva Sabana construction and the La Demajagua definitive feasibility study can resume. The La Christina concession expired in August and will not be renewed, narrowing the exploration portfolio while the two larger mine projects remain dormant.