Auric tops bonanza year with new gold milling contract

Auric Mining and its joint venture (JV) partner BML Ventures have locked in a new toll milling deal to process up to an additional 120,000 tonnes of ore from its Jeffreys Find gold mine near Norseman, WA.

When added to the balance of an existing toll milling agreement that Auric has with the Greenfields mill near Coolgardie in WA, the new contract will now give Auric a shot at milling up to 262,000 tonnes of gold-bearing ore in the final stage of its very successful campaign to get some quick and easy cash flows from its Jeffrey’s Find project near Norseman.

Milling operations for the new contract will be conducted by Focus Minerals at its Three Mile Hill plant in Coolgardie that is almost adjacent to the Greenfield’s mill where the balance of the ore is being milled.

Trucking of ore has already commenced and toll treating should be under way by the end of next week at Three Mile Hill that has a capacity of 1.2 million tonnes per annum.

Under the agreement Focus will process between 50,000 and up to 120,000 tonnes of ore at its facility, which, together with the existing 300,000-tonne contract at Greenfields, will take total ore mined from Jeffrey Find to 420,000 tonnes since starting 12 months ago.

Auric says its currently has 60,000 tonnes of ore sitting on the run of mine (ROM) pad and the first run will see about 40,000 tonnes put through Three Mile Hill.

In addition to the Focus deal, the JV still has 142,000 tonnes of ore left to process through the Greenfields Mill and that run will kick off at the end of November.

We have finalised one of our key milestones for 2024, two mills producing gold will ensure a bonanza finish to the Jeffreys Find Gold Mine in early 2025. The stellar gold price continues to boost the surplus cash flow from the joint venture with BML and exceeds all our expectations.

To date Auric and BML have managed to produce ore in both stage one and the recently completed stage two of the project at a solid 1.6 grams per tonne (g/t).

Under the agreement, BML bears all the mining, trucking and milling costs. After the gold is sold, BML is reimbursed for all direct costs and the balance is split equally between the partners.

So far only two interim dividends of $2 million have been distributed to both partners during the year, leaving a considerable amount of additional surplus cash still sitting in the JV coffers which will be further added to after the final campaigns. Auric says its is expecting a decent cheque in December and more in early 2025 once all cost reconciliations have been agreed.

The company’s focus will then turn to its 100 per cent owned Munda gold project, near Widgiemooltha in Western Australia’s Goldfields region.

Munda was highlighted by the company in a scoping study last year that outlined plans to produce between 112,000 and 129,000 ounces of gold from toll treating during a mine life of three to five years in conjunction with third-party toll treating at a local mill.

Having recently secured all the mineral rights including lithium and nickel from the surface to 150m in the planned mining area, Auric is pushing ahead with a trial pit, potentially allowing it to start mining at the beginning of next year.

The total resource of 200,000 ounces, with grades above 2 grams per tonne as confirmed by recent grade-control drilling campaign, is forecast to generate a serious free surplus cash of $76.9 million using a gold price of US$2600 per ounce.

With today’s rampant Australian gold price hitting $4138 an ounce and just shy of an all-time high of $4160, Auric’s timing could not be better.

In an uber-high priced gold environment, milling capacity is hard to get and whilst many other hopefuls are now starting to scramble around looking for deals, Auric is way ahead of the pack with not only dual toll treating agreements in place but a mining partner in BML that appears to know what it is doing.

Even though the Jeffrey’s find toll treating campaign has been a multi-million-dollar success for Auric, the real prize is Munda that is capable of producing a wall of cash for the $57m market-capped Auric.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au