Auric Mining has the first gold pour from its Jeffreys Find gold project near Norseman in Western Australia at its fingertips, with management confirming it had started milling its first batch of ore.
The company’s first 30,000 tonnes of ore will be processed at the Greenfields Mill in Coolgardie by end of this month, with another 100,000 tonnes waiting at the mine ready for trucking. It says its total expected throughput will be between 150,000 and 180,000 tonnes.
Auric’s joint venture partner and experienced mining contractor, Kalgoorlie-based BML Ventures, will incur and pay all costs in relation to mining the gold resource at Jeffreys Find, which is modelled at 1.21 million tonnes grading 1.22 grams per tonne gold for a total of 47,200 ounces. The two companies will 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 that is expected to land by October.
The company originally budgeted the project at a gold price of $2600 per ounce and with today’s price hovering at about $2900, it should expect to fill its pockets a little more by the end of this quarter. Management says the gold price jump above its initial estimate could result in an additional $5.7 million free cash.
Auric Mining managing director Mark English said: “This is a first-class result for Auric and its partner, BML Ventures Pty Ltd (BML) of Kalgoorlie. Once the first batch has been processed through the mill, we will be able to reconcile gold recovered against the grade control model greatly adding to confidence in the project economics. That is only weeks away. This project is right on track to achieve our ambition of mining and processing 150,000 to 180,000 tonnes from the mine, in the first phase.”
Management plans to put its surplus cash to work by continuing with the development of its Munda gold deposit at Widgiemooltha and with broader exploration in the Norseman area, where it holds about 640 square kilometres of tenements in four project areas.
Munda hosts a resource of about 198,700 ounces of gold at a grade of 1.38 grams per tonne and is conveniently located about 34km south-west of the mining town of Kambalda. Interestingly, it also 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.
The area around Widgiemooltha also boasts some big gold camps such as Gold Fields’ St Ives mine with more than 15 million ounces, the Higginsville gold mine at more than 2 million ounces, Chalice Mining with about 600,000 ounces and Maximus Resources’ Wattle Dam mine at about 260,000 ounces. Recent drilling by Auric at its Munda deposit turned some heads with high-grade hits, including one at 13m grading 14.62g/t gold.
Last month, the company revealed details from a scoping study on its Munda deposit supporting the potential for open-pit mining and the processing of ore at an existing toll treatment plant and outlined a cashflow surplus of $76.9 million under a base-case gold price scenario.
Auric listed on the ASX just three years ago and has moved with purpose to reach today’s milestone at Jeffreys Find. Now, with the first produced gold imminent and a substantial chunk of cash expected to be sitting in its bank account at the end of this quarter, the company is poised to self-fund its Munda gold development and explore further gold anomalism on its ground.
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By Andrew Duffy
