Aurumin is set to clear the final outstanding amount owing on a convertible note and become debt free having completed the sale of its suite of thirteen Mt Dimer tenements to Beacon Minerals for $3 million.
When the sale of Mt Dimer was first disclosed back in mid-November, Aurumin was carrying an overhanging commitment of around $4.4 million from an original $6.4 million convertible note held by Collins St Asset Management, relating to last year’s purchase of its Sandstone Gold Project.
With the $3m banked, applied alongside cash on hand, Aurumin will have a clean balance sheet, a new institutional shareholder in Collins St Asset Management and a clear path ahead to developing its Sandstone Gold project.
Aurumin's managing director, Brad Valiukas, said: "The Company is now net-debt-free and in a position to close out the remaining convertible note with available cash. In addition, we maintain upside from the Mt Dimer mining tenements, from future exploration and production. The support from the board and existing shareholders, through 7 Enterprises and Middle Island, respectively, has been great during this process and in the completed placement. We are also pleased to welcome Collins St as a shareholder and appreciate their support in the placement.”
The Mt Dimer tenement package, originally pegged for gold, lies 120km north-east of Southern Cross and comprises five mining leases, one prospecting licence, two miscellaneous licences and five miscellaneous applications.
Following completion of the sale, Beacon will take over all 13 of the Mt Dimer tenements, while Aurumin will retain some upside exposure to Beacon’s operations on the ground via a 2 per cent net smelter return royalty on any future gold production above 12,000 ounces and on all other minerals.
Aurumin’s balance sheet is poised to receive a further shot in the arm having also sold the iron ore rights at Mt Dimer to Polaris Metals – a subsidiary of mining giant Mineral Resources.
The Polaris sale included one exploration licence and three exploration licence applications for an initial cash payment of $250,000, a $250,000 progress payment on approval of a first program of works and additional progress payments up to a total of $1 million on a decision to mine, on approvals to mine and on the start of mining.
Aurumin will also receive a $1-per-tonne-export royalty on iron ore with the deal further sweetened by MinRes committing to reimbursing Aurumin’s expenditure for approved exploration on the four tenements.
In addition, Aurumin has also received firm commitments for a placement comprising a total of 50M shares at $0.025 per share to raise a total of $1.25 million to Collins St Asset Management (34,504,512 shares), Middle Island Resources (5,495,488 shares) and 7 Enterprises (10,000,000 shares), at a 14 per cent premium to the last closing price, in conjunction with the sale completion and convertible note reduction.
There will be one free attaching option for each share issued, with an exercise price of $0.06 and an expiry date of 22 December 2026.
Aurumin says its recent divestments and capital rationalisation will allow it to focus more on its three granted Sandstone Gold Project mining licenses which cover 185 square kilometres of prospective ground, 12km south of the Sandstone township and about 520km north-east of Perth.
At the time of settlement of Aurumin’s Sandstone purchase in March last year, the project contained a JORC-compliant mineral resource of 22 million tonnes at a grade of 1.1 grams per tonne gold for 748,000 ounces of gold.
The Sandstone ground and resource came with a non-operating, 500,000-tonne per annum carbon-in-leach gold processing plant, related infrastructure, operating licenses and camp facilities in the Sandstone township.
Since then, Sandstone’s resource has grown to just shy of the million-ounce mark, sitting at 946,000 ounces of gold in both open pit and underground operations, all within its granted mining leases.
Aurumin has also revealed plans to augment the resource with the 65,000 ounces of gold from its Johnson Range project to help kickstart its new operation and to advance the Shillington-Two Mile complex at Sandstone and better define its underground potential.
Management says it is now looking forward to seeing Beacon put Mt Dimer into production and processing the ore at Jaurdi. It is also maintaining exploration ground around the Mt Dimer mining tenements and in the wider area.
At Sandstone, Aurumin is engaged in ongoing open-pit resource definition, with the Shillington and Two-Mile Hill resource zones recently updated and nine other smaller resources to be reviewed.
Having executed a series of corporate and financial deals freeing the company from its debt shackles, Aurumin is now squarely focused on executing the comprehensive exploration program it has developed to assess the greater potential at Sandstone and clearing through the million-ounce resource mark and beyond.
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By Doug Bright
