Aurumin is primed and ready to get back to the drill rig at its Sandstone gold project in Western Australia’s Mid West region after closing out on the final $1.07 million owing on a convertible note.
The company says it will immediately exploit its financial freedom with a firm commitment to getting its 946,000-ounce Sandstone project back to “pouring gold bars”. It has also signalled a move to add more cash to the coffers for its project pursuits and entered into a trading halt this morning as it continues to prepare for a capital-raising mission.
Management has systematically chipped away at an overhanging $6.4 million debt relating to its Sandstone acquisition last year. But it today revealed recent divestments had put it in a position to issue a final redemption notice to Collins St Asset Management to extinguish the convertible note it took on as part of the Sandstone deal.
And outside of its impressive Mid West asset, the company is still completing the sale of the iron ore rights at four tenements within its Mt Dimer operation near Southern Cross to Polaris Metals – a subsidiary of mining giant Mineral Resources. Aurumin will remain exposed to the iron ore upside at Mt Dimer through a $1-per-tonne-export royalty, with the deal further sweetened by MinRes committing to reimbursing its expenditure for approved exploration on the four tenements.
Late last November, Aurumin also completed the sale of 13 of its Mt Dimer tenements to Beacon Minerals for $3 million. But paying off the convertible note now allows the company to execute a significant gear change for its operational focus at Sandstone.
Aurumin managing director Brad Valiukas said: “It’s great to be retiring the convertible note. We now have a clean balance sheet, have maintained all of our 946koz of Resources, have trimmed the asset portfolio and sharpened our focus on getting Sandstone back to pouring gold bars.”
Valiukas said the company remained focused on generating critical mass for a production restart at Sandstone, with an immediate goal of adding to its open pit resources. He said “good gold targets” had been identified on the mining leases and they would soon be subjected to a drilling campaign.
The Sandstone project features three granted mining licenses covering 185 square kilometres of prospective ground, 12km south of the Sandstone township and about 520km north-east of Perth.
The company acquired the Central Sandstone gold project early last year and it has now clearly become its signature play, with an expanding tenement footprint and a total estimated resource of 18 million tonnes at a grade of 1.5 grams per tonne gold for 881,300 ounces in both open pit and underground operations.
The acquisition also came with a non-operating 500,000-tonne per annum carbon-in-leach gold processing plant that could be polished up for a return to work, related plant site infrastructure, operating licenses and camp facilities in the historic Sandstone township.
Aurumin is also looking to pump up its Sandstone resource with 65,000 further gold ounces from its Johnson Range project as it continues towards the magical million-ounce resource status – and possibly beyond.
Throughout the period of putting the convertible note jigsaw pieces back together to get back to a debt-free position, Aurumin retained a clear focus on its bid to become a mining company. The opportunity to make that dream a reality is now nigh.
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By Steve Butler
