The first $4.7 million chapter has been written in Auric Mining’s remarkable money story at its humble Jeffreys Find gold mine near Norseman in Western Australia that many others would have ignored.
Proving good things can come in relatively small packages, Auric has produced more than 9700 ounces during two mining campaigns with joint venture (JV) partner BML Ventures, returning a total gold revenue of $29.28 million for the first stage of the two-year project.
All of the ore was processed at the Greenfields Mill in Coolgardie and stage two of the project is set to kick off early next year, ahead of a projected conclusion in late 2024 or early 2025. Management says its total cash surplus for the company during the two stage-one mining operations comes to more than $4.7 million after GST and splitting the proceeds with BML.
Earlier this 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.
High gold prices added significant sweetness to the first year’s final tally, with the JV selling its wares at a glittering average price of $3006 per ounce. And it believes it will reap at least similar numbers from the second phase.
The first campaign saw 36,180 dry metric tonnes processed at a reconciled head grade of 1.58 grams per tonne gold for 1721 ounces at a calculated recovery of 93.04 per cent. In the second campaign, 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.
Management says planning is well underway for next year, with BML working on the parameters for a final pit. Auric says that considering the stage-one pit was premised on a gold price of $2600 per ounce, a more expansive approach to mining may be on the cards next year.
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.
BML, an experienced, Kalgoorlie-based mining contractor, is incurring and paying all costs in relation to mining the gold resource at Jeffreys Find. The two companies then retain an equal share of the net cash surplus after the payment of all mining and processing costs, providing Auric with a substantial cash boost.
Auric Mining managing director Mark English said: “Stage One of mining has taken six months - not long to generate almost $30 million in gross revenue and $9.5 million in total surplus cash to be split by the partners. The second campaign returned a head grade of 1.93 grams per tonne, way ahead of the first campaign which produced at 1.58 g/t. Better still was an average gold price of $3,021/ounce for the second parcel which yielded more than 8,000 ounces.”
The company was established in 2020 to explore for gold and other deposits in WA’s Widgiemooltha and Norseman areas. It has 640 square kilometres of tenements in four project areas.
Management says revenue from the Jeffreys Find project will allow it to inject millions of dollars into its ongoing development – and more specifically at its 100 per cent-owned Munda gold deposit near Widgiemooltha. While Jeffreys Find has rattled the company’s tin, it rates Munda as its “big game”.
Munda hosts a resource of about 198,700 ounces of gold at a grade of 1.38g/t and is conveniently located about 34km south-west of the mining town of Kambalda. It sits just 3km south-west of Mincor Resources’ Widgiemooltha gold project, which has a mineral resource of 4.3 million tonnes at 2g/t gold for 273,600 ounces.
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 gold price in Australia is still hovering up near $3082 an ounce.
Auric has already launched a grade-control drilling campaign at the deposit and plans to have a starter pit at Munda producing gold as early as next year, before expanding the mine in 2025 and beyond.
Sometimes it is not the size of the dog in the fight, but the size of the fight in the dog – and the comparatively diminutive Jeffreys Find has definitely given Auric the financial bite to be able to roll out its bigger plans.
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By Michael Philipps
