Auric Mining is a step closer to a maiden gold pour from its Jeffreys Find project near Norseman in Western Australia with the first 30,000 tonnes of gold ore set for processing once transported to Greenfields Mill in Coolgardie.
The company says mining at the site has been ongoing for four weeks and it has triple road trains secured to haul the first ore to Coolgardie, where it will be processed as a 30,000-tonne parcel.
Jeffreys Find’s gold deposit has a resource of 1.21 million tonnes grading 1.22 grams per tonne for a total of 47,200 ounces. Metallurgical testwork undertaken by Auric has predicted gold recoveries of between 90 per cent and 95 per cent.
Auric’s business partner BML will incur and pay all costs in relation to mining the gold resources. The two companies will then retain an equal share of the net cash surplus after payment of all mining and processing costs.
Once the first stage of the operation is complete, BML is expected to expand the mine to the final pit design next year. Mining is predicted to be completed by the end of next year.
Management says the project was originally budgeted at a gold price of $2600 per ounce. The precious yellow metal is currently trading at about $2900 per ounce, so the company expects to receive a significant cash boost once the processed gold is sold at the end of next quarter.
Auric Mining managing director Mark English said: “Everything is going better than expected, including our partnership with BML. With the surging gold price well above our budgets we expect to generate more cash than anticipated. The first ore will soon arrive at the Greenfields Mill, and it won’t be long before gold bars are poured.”
Auric was established to explore for gold and to develop the precious metal and other deposits in WA’s Widgiemooltha and Norseman areas. The company has 640 square kilometres of tenements in four project areas. At Widgiemooltha, its Munda deposit hosts a resource of 198,700 ounces of gold at a grade of 1.38g/t.
The company’s total JORC resource base is 5.69 million tonnes at 1.35g/t gold for 245,900 ounces, with contributions from its Munda and Jeffreys Find deposits. Recent drilling at Munda includes high-grade intercepts such as 13m grading 14.62g/t.
Auric has begun a scoping study for the Munda deposit and expects the report to be completed by the end of this month. While the price of gold has dropped from its dizzying heights of more than $3000 per ounce a couple of months ago, the current price is well above its original budget for mining at Jeffreys Find.
Once first gold is poured at Coolgardie and then sold, the company should be in a strong financial position to assess its next moves, including its results from the scoping study at Munda.
Auric previously estimated its slice of the pie, after accounting for mining and toll-treating costs, would be somewhere between $5 million and $8.5 million in free cash … and that was at the lower gold market price.
Now it is looking like an even better earn for a company with a market capitalisation of just under $5.8 million.
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By Michael Philipps
