Aurumin Ltd (ASX:AUN) has started pre-development work for a first-phase operation at the 100%-owned high-grade Mt Dimer Gold Project northeast of Southern Cross in Western Australia’s Goldfields.
The company is aiming to take advantage of healthy gold prices through the phase one plan to begin production on a toll-treat or ore sale basis as soon as possible.
High-grade deposits
This plan involves mining of shallow open pits at the high-grade Lightning and Golden Slipper deposits at Mt Dimer, a historical high-grade production centre, having produced more than 125,000 ounces of gold from open pit and underground operations.
Facilitating this plan for Aurumin, the Mt Dimer deposits are located on granted mining leases, with road access, airstrip and nearby camp facilities.
“Healthy” gold price
Aurumin's managing director Brad Valiukas said: “The gold price remains very healthy and we have the Mt Dimer Project, with the small, but high-grade, Lightning and Golden Slipper deposits.
"We have a significant amount of capital in the ground, and it’s appropriate for us to realise a return on that investment and generate value for shareholders.
“Lightning and Golden Slipper are on existing mining leases, at a previously operated site, and there is a large amount of infrastructure in place and available, with access to haulage roads, airstrip, and camp facilities.
"In addition, there is a large amount of work already completed at the project including metallurgical test-work and flora and fauna surveys."
Aurumin deposits.
Initial deposits
Lightning is a high-grade, unmined deposit where recent drilling intersected 10 metres at 20.22 g/t gold, including a 1-metre sample with a grade of 153.5 g/t.
Golden Slipper is a proposed development to the south of a small open pit that mined in the 1990s to a depth of 63 metres where 67,000 tonnes at 3.4 g/t gold for 7,325 ounces was extracted.
Aurumin projects and processing plant locations.
Toll treatment plan
"There are multiple gold processing plants in the broader region actively engaged in toll treatment activity, including at Coolgardie and Marvel Loch,” Valiukas said.
“Over the next couple of months, we will work to lock in toll treatment capacity or an ore purchase agreement, mining costs and engage with DMIRS to finalise permitting requirements.
"This will allow us to finalise cut-off grades for resource reporting and design purposes and update the market as appropriate, including specific timelines.
“We have the capacity to progress these Phase 1 pre-development activities internally and in parallel with exploration elsewhere, including at the Sandstone Gold Project."
Aurumin’s second phase strategy for Mt Dimer involves the proposed expansion of mining beyond phase one activity, including potential cutbacks on Lightning and Golden Slipper deposits and the potential development of the LO3, T12, Karli West, Frodo and Anomaly 2 deposits.