Free cash set to flow for Auric from Jeffreys Find mine
Auric Mining has entered into the free-cash phase of gold production from its Jeffreys Find mine near Norseman in Western Australia following a remarkable project journey to date of just three years.
The company’s first stage of mining has produced more than 7700 ounces of gold from the operation, with 5667 ounces sold for a gross revenue of $16.6 million. It is understood that the only first-phase costs remaining for the joint venture (JV) Auric shares with experienced Kalgoorlie-based mining contractor, BML Ventures, are for milling.
Management says the gross revenue of sales to date have covered all of the JV’s other costs, with more than 2000 ounces still to be sold. At an Australian gold price today hovering at around $3009, that would leave the JV partners to share in whatever is left from some $6 million once the milling costs are paid … and with next year’s yield still to come.
The second stage of mining is expected to begin early next year and is almost certain to lead to another splash of free cash later in 2024.
Auric says 166,000 tonnes of gold ore has been delivered to the Greenfields mill at Coolgardie, with the operation on target to process 180,000 tonnes for its first stage of production. Once mining at Jeffreys Find is completed, management believes the project will earn the JV partners gross revenue of more than $28 million and a cash surplus to share of at least $8 million.
Ore is currently running through the mill at about 1.97 grams per tonne, however Auric has a further 15,000 tonnes of lower-grade ore that is expected to slightly bring down the average grade.
Auric Mining managing director Mark English said: “Overall, it’s a tremendous result for Auric. I don’t know of any other junior miners in the last couple of years that have gone from tenement acquisition to mining and free cash in the timeframe we have.”
The company was established in 2020 to explore for gold and other deposits in WA’s Widgiemooltha and Norseman areas. It has 640 square kilometres of tenements in four project areas.
Management plans to put its surplus cash to work by continuing with the development of its Munda gold deposit at Widgiemooltha – which it sees as its “big game” operation – and with broader exploration around Norseman. Munda hosts a resource of about 198,700 ounces of gold at a grade of 1.38g/t and is conveniently located about 34km south-west of the mining town of Kambalda.
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.
A recently-released scoping study on Munda outlined a cashflow surplus of $76.9 million under a base-case scenario using an assumed gold price of $2600 per ounce.
On the current numbers from Jefferys Find, Auric looks to have constructed a perfect plan to protect its capital structure at a time when extra money is proving hard to find in the small cap sector. It means that unlike a few other juniors that are being forced to go back to the well to raise a bit more cash, the company’s visits should be few and far between in the immediate future.
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