Aura Minerals Announces Positive Preliminary Economic Assessment on Its Expansion Study for the Aranzazu Project

VANCOUVER, BRITISH COLUMBIA--(Marketwire - July 18, 2012) - Aura Minerals Inc. ("Aura Minerals" or the "Company") (TSX:ORA) is pleased to announce it has received the results of the preliminary economic assessment study (the "PEA") on a mine and mill expansion at its wholly-owned Aranzazu copper project ("Aranzazu") in Zacatecas State, Mexico.

The PEA, prepared by AMC Mining Consultants (Canada) Ltd. ("AMC"), evaluates a feed rate expansion from the current 2,600 tonnes per day ("tpd") to 4,000 tpd and 5,600 tpd, culminating a positive economic assessment to enable the Company to take the Project forward.

Highlights

• Expansion of the current 2,600 tpd operation to 4,000 tpd by January 2015;
  
• Expanded operation, with roaster capability, has NPV of $200 million, a $145 million improvement over current operation;
  
• Capital requirement of $107 million to be funded with internally generated cash flows including $65 million from Aranzazu operations;
  
• Partial roasting selected as the long-term solution to decrease arsenic levels with commissioning of the roaster to coincide with the expansion;
  
• Ore-body remains open along strike and at depth allowing further future expansion;
  
• Feasibility study and long lead time engineering and procurement to commence immediately.

		Base Case 2,600 tpd	4,000 tpd	5,600 tpd
Mine life		25 years	18 years	13 years
Metal production,annual average
	Copper (pounds)	19,950,000	30,000,000	41,750,000
	Gold (ounces)	12,100	16,700	22,900
	Silver (ounces)	280,000	410,000	570,000
Cash flow from operations, annual average		$12.5 million	$37 million	$55 million
Cash cost per pound of payable Cu, net of credits		$1.90	$1.15	$1.09
Capital investment 2012-2014		$62 million	$107 million	$124 million
Incremental capital versus the base case		-	$45 million	$62 million
NPV at 8% discount, after tax		$55 million	$200 million	$219 million
Incremental NPV versus the base case		-	$145 million	$164 million
Internal rate of return, after-tax		-	71%	63%

Note: Economic results are based on analyst consensus pricing for copper, gold and silver. These forecasts include higher near term pricing followed by a gradual decrease to long term expectations of $2.70/lb, $1,216/oz and $21/oz, respectively. All dollar figures are in US$.

The PEA is preliminary in nature. It includes Inferred mineral resources that are considered too speculative geologically to have the economic considerations applied to them that would enable them to be categorized as mineral reserves. There is no certainty that the PEA will be realized. Mineral resources that are not mineral reserves do not have demonstrated economic viability.

Jim Bannantine, President and CEO of Aura Minerals, stated: "The results of the Preliminary Economic Assessment is an important milestone for the Aranzazu Project as it outlines the solution to two key issues limiting the Project's current performance: undersized mine and plant capacity and the current arsenic grades in our concentrate. The PEA confirms that the Project's value is greatly improved by expanding the plant capacity to 4,000 tpd and installing a roaster to eliminate the high levels of arsenic in our product.

The roaster, with an approximate cost of $22 million and a two year installation and commissioning period, is believed to be our most effective solution to decrease arsenic levels. Recent updates to the underground grade control model indicate an expected life of mine average of 1.6% arsenic in the concentrate. By roasting, concentrate arsenic grades can be reduced to levels where minimal penalties are applicable.

The expansion to 4,000 tpd will require modifications to our current plant and a progressive ramp up in our underground development. We expect these investments will require 2.5 years to complete thus enabling achievement of the expanded throughput levels by January 2015.

The PEA demonstrated that an expansion to 5,600 tpd provides the greatest net present value however the 4,000 tpd case has greater synergies with our current plant configuration thus providing a more efficient stepping stone for an even larger expansion phase in the future which would require a newer, larger plant. The 4,000 tpd case features minimal investment in plant capital that would have a very short useful life in the case of a larger expansion. A larger expansion beyond 5,600 tpd would require longer term activities such as additional exploration drilling (the deposit is still open on strike and at depth), new land acquisition for a potential new plant site, new environmental permits and significantly more capital expenditure.

Based on the positive results of the PEA, the next step is to commence the feasibility study and advance engineering for the expanded Aranzazu Project."

Summary Project Description

Mineral Resource:

The PEA is based on the Measured, Indicated and Inferred mineral resources as of September 30, 2011 and summarized below:

Category*	Cut-off Grade Copper (%)	Tonnes ('000)	Copper (%)	Copper ('000 lbs)	Gold (g/t)	Gold ('000 oz)	Silver (g/t)	Silver ('000 oz)
Measured	0.8	8,338	1.36	250,215	0.82	219	14.06	3,768
Indicated	0.8	9,432	1.63	338,523	0.56	171	21.45	6,504
Measured and Indicated	0.8	17,770	1.50	588,738	0.68	390	17.98	10,272
Inferred	0.8	5,808	1.40	178,902	0.58	94	17.64	3,295

* Based on 0.8% copper cut-off grade. Numbers may not add due to rounding. For additional information on the mineral resource estimate, please see the National Instrument 43-101 ("NI 43-101") compliant technical report dated November 30, 2011 entitled "NI 43-101 Technical Report and Resource Estimate on the Aranzazu Property, Zacatecas State, Mexico" prepared for Aura Minerals by William J. Lewis, B.Sc., P.Geo. of Micon International Limited, a copy of which may be found on the Company's profile on SEDAR at http://www.sedar.com/.

Capital Expenditure:

Expanding to 4,000 tpd will require approximately $107 million of capital investment in 2012 to 2014, summarized below:

		$US millions
Mining
	Mine development	$26
	Mobile equipment	14
Process
	Concentrator	10
	Pastefill plant & thickeners	16
	Concentrate roaster	22
Tailings pond and other surface capital		7
Contingency		12
Total capital investment 2013 and 2014		$107

Mining:

The underground mine has been designed to facilitate the extraction of 4,000 tpd through the application of transverse long hole open stoping, a low-cost bulk mining technique suitable for the significant mineralized mining width and strong continuity of Aranzazu resources. Paste backfill is integral to the project to maximize both resource recovery and mining productivity. Modern trackless mobile equipment will be used for the majority of mining activities.

An extensive underground development program that attains 700 m/month of advance is required to develop and maintain access to adequate resources to sustain 4,000 tpd of production. Underground project infrastructure will include ventilation shafts and fans, a centralized pumping station, a modern maintenance facility, electrical substations, fueling facility and other ancillary installations.

Material handling from the underground workings to the concentrator will be accomplished by a modern fleet of haulage trucks via an extensive ramp system connected to two existing surface portals. Primary crushing will continue to be performed on surface.

The planned underground infrastructure and mining method would equally support a potential increase in production beyond 4,000 tpd with an incremental investment in fixed plant and mobile equipment.

Processing:

Various arsenic treatment routes were considered including differential flotation, alkaline sulphide leaching and partial roasting. The partial roasting alternative was selected on the basis of it having a lower operating cost for similar capital costs and also as being well-proven technology with a high degree of process certainty. The preliminary design is based on commercial scale operations modified to capture arsenic in a wet scrubber and stabilize it as insoluble ferric arsenate for environmentally secure disposal off site in an approved hazardous waste facility. For the PEA, a worst case scenario was assumed where offsite transport and storage of this ferric arsenate product was included in the operating costs. Subject to testing and permitting, there may be opportunities in the future to dispose of this material underground by mixing it with the cemented paste backfill. These opportunities will save approximately $80 per dry metric of copper concentrate versus the economic analysis included in the PEA.

The expansion of the processing plant to 4,000 tpd capacity will consist of an additional 9' x 16' primary ball mill and two 50m³ tank flotation cells. This will provide not only sufficient additional rougher flotation capacity but also to allow for reconfiguration of the cleaner circuit to further optimize final concentrate quality. Additional crushing capacity will be achieved by more fully utilizing the available runtime of the existing equipment so the expansion to 4,000 tpd is capital efficient. The installation of the additional equipment can also be carried out with minimal disruption to current production.

A new tailings thickener and the paste backfill plant will also improve the recovery of water from tailings to the extent that the existing fresh water supply system does not require any capacity upgrade. Several tailings disposal options were evaluated. The existing tailings storage facility offers short-term capacity, while the majority of the tailings from the expanded production scenario will be stored in a new facility to be developed to the east of the current operation.

Arsenic Update

The Company's current estimate of arsenic in the final concentrate is approximately 1.6% over the life of mine based on our current plant configuration. We are in the process of further refinements to this estimate.

Our near term plan, 2012 through 2014, is to mitigate arsenic levels and penalties by:

• Optimizing our mix of ore feed to the plant with the aim of producing a low arsenic and high arsenic product as opposed to one homogenous product, which would enhance the economic value of the concentrate above what is assumed in this PEA;
  
• Continuing metallurgical test work on differential flotation to optimize copper recoveries while suppressing arsenic;
  
• Continuing to work with concentrate off takers to optimize net smelter returns;
  
• Ore control procedures will use recently purchased underground equipment to optimize short term grade control variability.

Our long term plan, 2015 and beyond, is to implement partial roasting which will effectively eliminate arsenic from our concentrates. Partial roasting is a well known technology with several operations around the world which reduces arsenic in the concentrate in a safe, efficient and environmentally friendly manner. AMEC has completed a positive desktop study and has been commissioned to enhance this study to the conceptual level. This desktop study is now being followed up with bench and pilot scale roaster testing, which has already been initiated. Discussions with roaster suppliers have also been started as well as preliminary discussions with SEMARNAT, the Mexican Environmental Authority, for the permitting of the roaster. The Company expects that all necessary permits will be granted.

Technical Disclosure

The PEA was prepared under the direction of AMC by leading independent industry professionals, all Qualified Persons under NI-43-101. The Qualified Person for Aura Minerals is Bruce Butcher, P. Eng., Vice President, Technical Services, who has reviewed and approved this news release.

The NI 43-101 compliant technical report supporting the PEA, including a description of the Project resources, mine plan, metallurgy, capital costs, operating costs and financial analysis will be filed with the appropriate regulatory authorities within 45 calendar days of the date of this news release.

About the Aranzazu Mine

The Aranzazu mine is located within the Municipality of Concepción del Oro in the north eastern region of the State of Zacatecas, Mexico, and covers approximately 11,380 hectares, including the historical, past producing El Cobre area. The property can be accessed by paved highway from both the city of Zacatecas located 250 kilometres to the southwest and from the city of Saltillo located 112 kilometres to the northeast. Both Zacatecas and Saltillo are serviced by daily domestic and international flights. The Aranzazu mine consists of both open-pit and underground mine operations and an upgraded 2,600 tonne per day mill, which produces a copper-gold-silver concentrate using conventional flotation. Aura Minerals acquired the Aranzazu mine in June 2008 and holds a 100% interest in the asset.

About Aura Minerals

Aura Minerals is a Canadian mid-tier gold and copper production company focused on the exploration, development and operation of gold and base metal projects in the Americas. The Company's producing assets include the San Andres gold mine in Honduras, the Sao Francisco and Sao Vicente gold mines in Brazil and the copper-gold-silver Aranzazu Mine in Mexico. The Company's core exploration asset is the feasibility-stage copper-gold-iron ore Serrote Project in Brazil. The Company also has the Inaja iron ore project currently optioned to Vale.

For further information, please visit Aura Minerals' web site at www.auraminerals.com.

Cautionary Note

The PEA should not be considered to be a pre-feasibility or feasibility study, as the economics and technical viability of the expansion of the Project have not been demonstrated at this time. The PEA is preliminary in nature and includes inferred mineral resources that are considered too geologically speculative at this time to have the economic considerations applied to them to be categorized as mineral reserves. There is no certainty that the production profile concluded in the PEA will be realized. Actual results may vary, perhaps materially.

Some statements contained in this news release are forward-looking statements. All statements, other than of historical fact, that address activities, events or developments that the Company believes, expects or anticipates will or may occur in the future, including, without limitation, expansion at the Project and a reduction in arsenic levels, mine life and potential value, are forward-looking statements. These statements generally are identified by words such as "believes", "expects", "may", "will", "should", "anticipate" and similar language, or convey estimates and statements that describe the Company's future plans, objectives or goals. Since forward-looking statements are based on assumptions and address future events and conditions, by their very nature they involve inherent risks and uncertainties, many of which are beyond the Company's ability to control or predict. Factors that could cause actual results or events to differ materially from current expectations include, without limitation, failure to establish estimated mineral resources, the failure to meet estimated production levels, the failure to realize expected margins and valuations, including cash flow forecasts and projected capital and operating costs, changes in world copper, gold and silver prices and other risks discussed in the section entitled "Risk Factors" in the Company's Annual Information Form. Readers are cautioned not to place undue reliance on forward-looking statements, which speak only as of the date thereof. The Company does not undertake to update any forward-looking statement that may be made from time to time except in accordance with applicable securities laws.