Just weeks after celebrating its third-year anniversary as a listed company, Auric Mining is aiming to hold a unique role in the Australian resources sector as a relative junior with two operating gold mines.
Since launching on the ASX back in February 2021, Auric has already produced more than 9700 ounces during two mining campaigns with joint venture (JV) partner BML Ventures at its Jeffreys Find operation in Western Australia’s Goldfields region, returning a total gold revenue last year of $29.28 million for the first stage of the two-year project.
And just last month, the company recorded multiple high-grade intercepts from grade-control drilling at its Munda gold project near Widgiemooltha, close to Jeffreys Find, including a 1m hit grading 184.6 grams per tonne gold. Auric now has plans in train to have a starter pit at Munda producing gold as early as this year, before expanding the mine in 2025 and beyond.
While management has already banked $4.7 million in free cash from the first stage at Jeffreys Find – and expects an even better result this year – it has claimed Munda to be the “big game” of its current operations.
The company was established in 2020 to explore for gold and other deposits in WA’s Widgiemooltha and Norseman areas where it holds 640 square kilometres of tenements in four project areas.
The gold producer’s first mining campaign at Jeffreys Find saw 36,180 dry metric tonnes processed at a reconciled head grade of 1.58g/t gold for 1721 ounces at a calculated recovery of 93.04 per cent. In the second phase, 139,685 dry metric tonnes were processed at a head grade of 1.93g/t for 8020 gold ounces at a recovery of 92.58 per cent.
All ore was processed at the Greenfields Mill in Coolgardie and stage two of the project is set to kick off within weeks, with all approvals in place, ahead of a projected conclusion late this year or early in 2025.
The Jeffreys Find deposit boasts a resource of 1.21 million tonnes of ore grading 1.22g/t gold for a total of 47,200 ounces, with a mine life of just under two years. Last year, Auric revealed it had sold 1264 ounces at a record price of $3131 per ounce to the Perth Mint for a gross revenue of nearly $4 million.
With the second campaign at Jeffreys Find set to kick off, BML has executed a contract with FMR Investments to toll mill a minimum 300,000 tonnes of ore at the Greenfields Mill in Coolgardie throughout the year. BML expects to put its first parcel through the mill in April, while Auric has paid $1 million as a working capital contribution to its JV partner for this year’s operations. Outside that payment, BML will incur and pay all additional mining costs and expenses.
After completing the final phase of mining, the two partners will subtract all costs before again splitting the surplus cash proceeds on a 50:50 basis. Auric is expecting first cash from the second phase of mining at Jeffreys Find in the last quarter of this year and further cash in first quarter of next year.
The company plans to put its surplus cash to work by continuing with the development of its Munda gold deposit, alongside broader exploration around Norseman.
It is our intention to progress the development of Munda throughout 2024 with our key ambition being to commence mining late in 2024/early 2025. There is still a lot of work to be done, but it’s an exciting time for the Company. We have the necessary funds to undertake all the pre-mining work we need to without requiring any further equity funding. Auric Mining managing director Mark English
A recently-released scoping study on Munda outlined a cashflow surplus of $76.9 million under a base-case scenario using an assumed gold price of $2600 per ounce. Today’s Australian gold price is sitting at more than $3119 an ounce.
The site sits just 3km south-west of Mincor Resources’ Widgiemooltha gold project, which has a mineral resource of 4.3 million tonnes at 2g/t tonne gold for 273,600 ounces.
Auric commissioned Kalgoorlie consulting firm Minecomp to conduct an independent scoping study to evaluate the viability of open pit mining at Munda, in addition to third-party toll treatment. The analysis pointed towards robust project economics across a broad range of gold prices, providing justifications for further work to refine material inputs and to enhance economics at Munda.
The deposit sits 98km south of Kalgoorlie and within Auric’s greater Widgiemooltha gold project.
The company recently drilled 351 holes at Munda as part of a grade-control campaign, with assays already received from 244 holes sunk representing about 70 per cent of the program back from the laboratory.
Drill highlights include a 9m section grading 21.37g/t gold from 18m including the impressive 1m at 184.6g/t from 24m. Additional high-grade results show a 4m section going 20.13g/t gold from 28m including 1m reading 77.18g/t from 29m and 4m at 18.84g/t from just 11m including 1m at 68.94g/t from 13m.
Wider assays include a 16m hit grading a solid 12.54g/t gold from just 8m, in addition to 11m going 4.51g/t from 40m including 2m reading 18.11g/t from 42m.
Management says a resource model will be developed for the volume defined by the grade-control drilling once all results are received, which will then lead to a refined model for the deposit and further assessment of development options.
The drill pattern of the company’s latest campaign covered the starter pit outlined in the recent scoping study within a larger area of near-surface mineralisation and was completed by Kalgoorlie-based Total Drilling Services.
A seven-hole reverse-circulation (RC) drilling campaign has kicked off to test several targets about 1km to the east of the Munda gold deposit and within the mining lease. The rig, operated by Kalgoorlie-based Kennedy Drilling, will then drill 10 grade-control holes at Munda to add further detail to two areas of mineralisation defined by the previous program.
Auric says the assay results received to date reaffirm the frequent high grades and limited continuity of gold mineralisation, while the use of close-spaced grade-control drilling will be essential to detailed definition and mining of the deposit. Management says metallurgical sampling is ongoing with several ore types well represented in the grade-control drilling.
In addition to its Jeffreys Find mine and greater Widgiemooltha operation, which includes the Munda deposit, Auric also holds the Spargoville project about 30km north of Widgiemooltha, that combines eight tenements. It sits along strike from the Wattle Dam gold mine that produced 268,000 gold ounces at a grade of 10g/t from 2006 to 2013 and is considered one of Australia’s highest-grade mines from that time.
The company also holds the Chalice West project that covers about 534sq km over three tenements within shouting distance of the Chalice gold mine that produced more than 670,000 gold ounces. While the area is highly-prospective for gold, an air-core (AC) and RC drill campaign has also highlighted the site’s potential for both nickel and rare earths.
However, Auric’s primary focus this year remains on producing gold from Jeffreys Find and developing Munda into an operating project by the end of the year.
While many other commodities have suffered significant dips in price in the past six months, including nickel and lithium, gold remains steady – and the company has proven it knows how to get it out of the ground.
So, with plenty of money in the bank from its successful first mining campaign at Jeffreys Find and with more still to come, Auric could well find itself in the enviable position of holding two producing gold mines before the end of the year.
Is your ASX-listed company doing something interesting? Contact: office@bullsnbears.com.au