As the Australian gold price surges, Auric Mining Ltd (ASX:AWJ) has executed a toll milling agreement between FMR Investments Pty Ltd (FMR) and local contractor BML Ventures Pty Ltd (BML) that provides for toll milling of ore from the Jeffreys Find gold deposit at FMR’s Greenfields Mill 3 kilometres east of Coolgardie.
The agreement was finalised on March 30, giving Auric and BML the green light to execute the Decision to Mine notice, and will see the company generate cash within six months.
Equipment is now being mobilised to start mining in early April 2023.
“This is an important stage in Auric’s growth – to be generating cash within the next six months with negligible downside to Auric is a terrific result,” Auric managing director Mark English said.
“The cash generated will be used to advance our exploration projects and Munda gold deposit. Our timing is perfect with the surging Australian gold price.”
Mining Jeffrey’s Find
Auric will mine the Jeffreys Find gold deposit in conjunction with BML, the latter of which will incur and pay all ongoing and working capital costs in mining the gold resources.
The net cash surplus will be split 50:50 between the companies after payment of all mining and processing costs have been made. The agreement also includes provision for an interim split of surplus cash following completion of the starter pit.
Mining will be conducted in two stages: a starter pit and final pit.
The toll milling agreement with FMR will cover mining of the starter pit. Approximately 150,000 tonnes of ore will be delivered to the Greenfields mill in three parcels.
There are several milestones in the pipeline with the starter pit will be mined from April through to July.
Auric expects to deliver first ore in June, while all processing will be completed and gold delivered to the Perth Mint by end of September 2023.
Numerous mining related activities have been completed or are being undertaken:
- A small mine – mining proposal has been approved by DMIRS. This allows for the start of mining.
- Grade control drilling is complete and the results are being used for detailed mine planning.
- The full mine – mining proposal is being assessed by DMIRS.
- A haul road has been formed with ongoing work required to compact and sheet the haul road as mining progresses.
- Equipment is being mobilised.
FMR will play a major role in processing.
Its Greenfields Mill has a long history as a toll milling facility and appropriate procedures for processing ore from multiple clients.
Auric will pay for processing the ore from Jeffreys Find, with the gold produced by the mill to be further refined at the Perth Mint.