On site, the company is running a dry-hire fleet anchored by a 125-tonne excavator and four 40-tonne ‘Moxi’ dump trucks, backed by a suite of support gear. Kalgoorlie-based Total Drilling Services is in charge of grade control, blast-hole drilling and supervision, bringing local expertise to keep operations sharp and efficient.
Auric’s maiden haul is tipped to clock in at about 6100 ounces of gold, at an all-in sustaining cost of just $2635 per ounce. Early modelling based on a what is now looking like a way too conservative $3500 gold price pointed to $5.3 million in free cash flow. But with the yellow metal now blazing around $6340 an ounce, the company’s first campaign could end up paying out a far heftier dividend.
The starter pit program also brings a few strategic wins. By stripping overburden with a strip ratio of 7.6 to 1 while gold prices are running hot, Auric says it is effectively lowering future mining costs and insulating the broader Munda operation against any potential gold price volatility.
The company says the initial phase will also deliver critical insights into the larger deposit at Munda, giving Auric a chance to refine its strategy ahead of scaling up to full production.
Once the initial campaign wraps up, Auric plans to quickly move into planning and scoping work for the main pit, where the real gold muscle is being flexed.
At a 0.5 grams per tonne (g/t) cut-off, Munda shapes up as a tidy operation with 3.65 million tonnes of ore grading 1.23g/t for 145,000 ounces of contained gold. Drop the bar to 0.2g/t, and the resource bulks up to 189,000 ounces across the indicated and inferred categories – a clear sign there’s plenty more metal in the system.
Kalgoorlie-based Minecomp took a hard look at the mine in 2023 and liked what it saw. Its scoping study, using what now looks like a bargain-basement gold price of $2600 an ounce, modelled 1.716 million tonnes at a robust 2.2g/t, delivering a mouth-watering $76.9 million in undiscounted surplus cash flows.
Fast forward to today’s record-breaking gold prices north of $6340 an ounce, and those numbers start to look positively explosive. If Munda looked strong back then, it is shaping up as a potential cash machine now.
The key to successful mining usually boils down to discipline, timing and a good handle on cashflow management. In Auric’s case the company appears to have all those skills in spades, starting with its breakout toll milling success two years ago at Jeffreys Find near Norseman.
Once dismissed as a modest deposit, Jeffreys Find delivered in spectacular fashion as gold prices surged, netting Auric almost $14.5 million in profit.
Rather than diluting shareholders with capital raisings, management turned those winnings into growth.
Initially, the company snapped up the Burbanks gold plant near Coolgardie for $4 million to lock in long-term processing capacity. It then spent nearly $5 million acquiring the partly mined Lindsay’s gold project in the Eastern Goldfields and nearby brownfield tenements – all using profits and no debt.
Even more impressively, Jeffreys Find has also paid the $6.5 million development bill for the starter pit at Munda.
By staying lean and avoiding dilution, Auric has created a self-funding growth engine that’s propelling it from small producer to serious WA gold player and its approach to cashflow looks like a blueprint for how to turn ounces into an empire.
With trucks hauling, gold about to be poured, and money soon to follow, Auric now appears to have crossed one of the most crucial thresholds in any explorer’s life cycle – the move from spending to earning – positioning it squarely in the ranks of Western Australia’s newest gold producers.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
