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Murray Ward
In its march towards becoming a self-sufficient gold producer, Auric Mining has taken a significant step, locking down the services of a highly regarded industry veteran to lead the development and construction of its Burbanks processing facility.
Scott Bailey, who is due to join the company as processing lead in three weeks, will be tasked with spearheading the build at the gold mill, just 11 kilometres south of the historic mining hub of Coolgardie in Western Australia.
The hire looks to be a major strategic win for Auric.
Bailey brings a wealth of hands-on experience in Western Australian gold processing, most recently serving as corporate group processing manager at Black Cat Syndicate. During his tenure there, he was instrumental in the acquisition and successful recommissioning of the Lakewood processing plant near Kalgoorlie. The seasoned operative was also pivotal in the ahead-of-schedule restart of Paulsen’s gold mine and held senior roles at Westgold Resources and KCGM.
‘The development of Burbanks is a key plank in our transition’
Auric Mining chairman Steve Morris
The new hire appears to signal Auric’s intent to get Burbanks operational as soon as possible. By owning its own infrastructure, the company aims to bypass the challenges of diminishing third-party toll milling opportunities and gain full control over its gold production and cash flow.
Auric Mining chairman Steve Morris said: “The development of Burbanks is a key plank in our transition to a fully integrated gold producer in our own right. And critical to that is putting together the team that can deliver that facility”
Auric is currently riding a wave of operational success, completing production from its Munda gold mine Starter Pit near Widgiemooltha well ahead of expectations. Across two processing runs in the past three months at Black Cat’s Lakewood mill, the campaign produced 8,886 ounces of gold – a hefty 46 per cent above budget – before landing sales at an impressive average price of A$7,178 per ounce.
Adding further heft to its cash pile, the company has wrapped up the final toll treatment run from its Jeffreys Find mine near Norseman, closing out a highly successful campaign with partner BML Ventures. The project has now moved through rehabilitation and completion, ultimately delivering an impressive $16.5 million in cash distributions from a remarkably modest $1.2 million initial outlay.
The outstanding performance from both operations has left the company sitting on a formidable war chest of A$43 million in cash, bullion and listed investments, with a sizeable GST refund still to come.
Auric’s future production is likely to be anchored by its flagship Munda Main Pit gold project. Sitting directly beneath the Starter Pit, the resource currently stands at 3.65 million tonnes grading 1.23 grams per tonne for 145,000 ounces.
However, given the strong grades and recovery across the Starter Pit campaign, Munda’s Main Pit could host a substantial gold system. Auric now believes the deposit could be significantly bigger and higher-grade than previously thought, paving the way for a resource upgrade ahead of development later in the year.
The company’s broader exploration pipeline has been further bolstered by the recent addition of the Lindsay’s gold project 60km northeast Kalgoorlie. The standout prize at site is the Parrot Feathers open pit, which was only lightly mined for 6153 ounces before KalNorth pulled the pin during the 2013 gold slump. With about 75 per cent of the resource still untouched, it is effectively begging for a second crack.
With the new hire at the helm of the processing division, the company’s next steps will be to finalise design, construction and engineering work and secure the necessary regulatory approvals to bring the mill back to life. Notably, Auric is evaluating options to increase the plant’s processing capacity to 500,000 tonnes per annum or more.
Punters can expect a steady stream of updates as the development moves through the planning phase towards active construction. As the mill takes shape, Auric should be well-positioned to transition from a developer into a fully integrated mining house.
By bringing in a specialist who knows the Burbanks site and the WA gold landscape inside out, the savvy move has likely put the company in the driver’s seat for a very golden future.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
