Todate 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: mattbirney@bullsnbears.com.au
