Aureka Limited (ASX:AKA) has risen from the ashes of previously ASX-listed Navarre Minerals to become one of Australia’s most promising gold plays with a suite of prospective assets within the richly endowed historic goldfield regions of Victoria.
From its ill-fated decision to purchase the Mt Carlton gold mine in Queensland from large goldie Evolution Mining in 2021, the company has bounced back under new management and with an ASX re-listing under its new moniker.
The company commanded a market cap of $156 million in 2022, but imploded under the weight of operating a loss-making mine.
What has come since makes for an interesting and perhaps instructive story.
James Gurry was a new non-executive director who had witnessed Navarre’s descent into administration in June 2023, having joined the board a month earlier.
Gurry recognised the potential of the company’s portfolio of Victorian gold exploration assets and was pivotal in the push to bring the company back to life. He became managing director and executive chairman in the following months.
A deed of company arrangement was locked in by late 2023 to buy back the company and return it to its roots as a gold-focused Victorian explorer.
This was followed with a $1.7m convertible note raising, initiated in April 2024 and completed a few months later.
This was the first stage in a two-step process to begin the re-capitalisation process and included a $525,000 payment to Navarre’s administrators for the Victorian assets.
The assets included the company’s flagship Stawell Corridor gold project in Victoria’s Wimmera region, about 240 kilometres west northwest of Melbourne.
The project consists of an impressive 304,000-ounce gold resource grading at 2.43 grams per tonne (g/t) at its Irvine deposit, which runs from shallow depths to 400 metres.
The project also contains an exploration target of 3.4 million tonnes to 5.2.mt across its Resolution and Adventure prospects for 280,000 ounces to 420,000 ounces of gold grading at 2-3g/t.
With the assets secured, a plan was hatched to piece together the prerequisites needed to convince the ASX to allow the company to relist on the market.
Gurry hired experienced mining executive Richard Taylor, who has worked with SensOre Mining, PanAust and MMG, to join him on the board as a non-executive director.
Geologist Ken Bush was drafted to lend his expertise and knowledge of the local geology to formulate an exploration plan to help the directors’ relisting endeavours. Bush is also contracted to $450m market-capped Southern Cross Gold, a nearby gold company which astounded the market with its run of superlative assays.
Another Southern Cross alumnus Angela Lorrigan, a technical expert in narrow-vein geology, also joined the board.
The new directors banded together other “true believers” who knew of the company’s suite of prospective assets and launched stage two of the recapitalisation process. This comprised an expected $6m equity raise immediately before the company sought ASX approval to rejoin the local bourse.
Cornerstone private investor Dunkeld Pastoral Company was secured with a commitment for $1m and the company was off to the races in its hunt for the balance of funds it needed.
In October, much to the company’s delight, prospective investors subscribed for a total of $9m worth of shares, although management decided to keep to its original plan for a $6m capital raise.
The company issued 60 million shares at 10 cents apiece, bringing total shares in the entity today to about 102 million after all the previous Navarre shares were consolidated as part of the recapitalisation.
More than 300 of the original Navarre shareholders applied for shares, a testament to their belief in the quality of the company’s assets.
The company’s shares were back on the ASX boards in late November, before it rebrand as Aureka Ltd - which encapsulates Victoria’s emblematic “Eureka” and the gold symbol “Au” - on December 6.
Management says it is planning a 7000m drill program this year with a strong focus on Irvine – for 5000m of drilling - and its Tandarra gold project.
Tandarra is part of the Bendigo zone Aureka holds in a joint venture with ASX-listed Catalyst Metals. Catalyst owns 51 per cent and manages the project.
At the height of the company’s battle to relist in June last year, after raising the convertible note funds and paying the administrators, it was hit with an unexpected bill for $373,000 for its 49pc share of a drilling program Catalyst undertook at Tandarra to test the potential of its Lawry and Upton Road prospects.
Management began scratching their collective heads as to whether they should maintain the company’s share of the partnership at 49pc or dilute their ownership.
The fact that Aureka chose to pay the costs and maintain its stake in the project, at a time when cash was being raised for its resurrection, speaks volumes for its belief in Tandarra.
The joint venture project sits along the Whitelaw gold corridor and the Tandarra fault, extending for 13km along the two faults. The Whitelaw corridor is considered to be a major structural control of gold mineralisation north of Bendigo.
As prospective as Tandarra is for Aureka, Irvine’s mineral resource and the wider Stawell project is the name of the game.
Irvine’s targets remain open along strike and at depth. The company recently kicked off a diamond drilling program for 2000m at the Resolution lode aiming to drill high-grade shoots to significantly expand and upgrade the resource.
Management says minor sulphide minerals have been observed 212m downhole and detailed geological logging remains ongoing.
Previous impressive gold hits at Irvine consist of a 5m slice at 10g/t, 9.4m going 5.3g/t and a 10.8m section running at 4.5g/t.
Irvine sits 20km from the 5-million-ounce operating Stawell gold mine.
The joint venture Tandarra project sits 50km northwest of Agnico Eagle’s world-beating Fosterville gold operation and 40km north of the 22m-ounce Bendigo goldfields.
Fosterville’s underground mine is one of the richest gold mines globally. It produced 225,000 ounces of gold last year at a stunningly low cost of US$653 (A$1031) per ounce. That’s not too shabby when you consider the company more than likely received a minimum of triple that price last year for each ounce sold, based on last year’s average gold prices.
At today’s price of US$2911 (A$4596) per ounce, the margins are astonishingly generous.
Aureka’s latest drilling program comprises six diamond holes for about 1000m at the Lawry prospect to increase the project’s mineralised footprint.
The drilling stretches 100m north and south of the previous program, where multiple gold mineralised zones extend into fresh rock.
Previous gold results of 12.9m grading 33.1g/t from 66.4m, including 0.5m at a super grade of 831g/t, and a 9m slice running at 14.8g/t gold indicate its prospectivity.
Tandarra has three main prospects - Tomorrow-Macnaughton and Lawry. Tomorrow is regarded as the most advanced prospect.
Aureka also has the St Arnaud gold project in the historic St Arnaud goldfields that stretches across 819 square kilometres of tenements. A maiden drilling program intersected high-grade gold including 9m at 6.1g/t, 20m going 1.8g/t and a 6.2m hit at 3.7g/t.
The company is planning geophysical surveys and 3500m of air core drilling at St Arnaud, in addition to a 1200m diamond drilling campaign beneath shallow cover.
Management estimates more than $5m has been spent on exploration at St Arnaud with $20m spent on Irvine’s exploration programs and a further $7m outlaid at Tandarra.
Based on that expenditure and the potential likelihood the company will encounter further mineralisation at the three deposits, Aureka’s $17m market cap doesn’t appear to be too stretched.
The company’s 102 million shares on issue are significantly less than many other goldies, which often have billions of shares on company registers.
Aureka is also sitting on a cool $5m in the bank.
From what initially seemed a hopeless position, the use of market know-how and good old perseverance from some wise heads has seen Aureka rise from the depths and now takes its place among the most promising of junior gold plays.
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