The Serrote project is an advanced stage greenfield copper-gold development asset, currently under construction in Brazil

CASE STUDY

Serrote is an advanced stage, greenfield copper-gold asset in a mining-friendly region of northeastern Brazil. Benefiting from existing permits and excellent access to infrastructure, the project presents a low capital intensity and defensive investment opportunity. The asset is a well-understood and conventional, low strip deposit amenable to open pit mining that will employ proven processing technology to produce copper concentrate.

Appian acquired the Serrote project from Aura Minerals in March 2018 for a total consideration of US$40m (US$10m deferred), following a 6-month due diligence period. The transaction demonstrated the benefits of unlocking value from non-core assets within a broader portfolio, with Aura Minerals’ market capitalization increasing circa 70% within a 2-month period.

Prior to the successful carve-out of Serrote by Appian, the asset was non-core to Aura Minerals, who were focusing on their three producing operations in Honduras and Brazil, as well as working to restart the copper-gold-silver Aranzazu mine in Mexico. The sale of a non-core asset enabled Aura Minerals to focus on the core elements within their portfolio and provided them with sufficient capital to successfully do so.

Originally scoped to be a large tonnage, low grade project, the internal Appian technical team has re-scoped the development plan from first principals to optimize project economics and returns. The attractive capital profile and development timeline identified by Appian defines a clear path to a low cost operation. Following the successful completion of an updated definitive feasibility study and lean-design engineering for the Serrote project, construction has commenced and is progressing towards commercial production.

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