With a pre-strip ratio of 7.6:1, the starter pit has been designed as a conventional open-pit, drill-and-blast mining operation and will kick off by first removing 339,000 cubic metres of overburden.
Auric Mining managing director Mark English said: “It won’t be long before ore stockpiles build at Munda. When we bought the tenements in September 2020 it was always our intention to get into production as quickly as possible. The mine is our future for the next five years and we are settling in for a sustained period of gold production.
Auric expects to deliver the first 6100 ounces gold from the Starter Pit at an all-in sustaining cost (AISC) of just A$2,635 per ounce. When the company initially ran its numbers on the starter pit it assumed a very modest A$3500 gold selling price and expected to bank a quick $5.3 million at that selling price.
Fast forward to today however and gold is now soaring at $5100 per ounce, setting up some serious upside around the final free cash figure that the starter pit at Munda will churn out.
Auric’s Munda project is packing some serious gold muscle beneath the surface too.
Using a 0.5g/t cut-off, the deposit holds 3.65 million tonnes grading 1.23g/t for a tidy 145,000 ounces of gold. At a lower cut-off grade of 0.2g/t the indicated and inferred resource swells to 189,000 ounces.
A 2023 scoping study by Kalgoorlie-based Minecomp crunched the numbers on the broader Munda project and found plenty to like about it. Using a now thoroughly under-estimated base-case gold price of A$2600 per ounce, the study projected Munda could churn through 1.716 million tonnes at an impressive 2.2g/t, generating a mouth-watering $76.9 million in undiscounted surplus cash flow. What that number will look like now in the new hyper-high gold price environment is anyone’s guess.
With $6.5M in pre-strip costs, Munda has been fully funded from the profits from the company’s star performing Jeffreys Find toll-treated gold mine, which has generated more than $100 million in revenue over its mine life.
Although Jeffreys Find is finally drawing to a close, 60,000 tonnes of ore is still sitting on the ROM pad ready to be toll treated at the Three Mile Hill gold plant at the start of July, adding an estimated 3000 ounces of gold to the total inventory.
Auric’s efforts to get into Munda as soon as possible appears well-timed and leaves it positioned to capitalise on the strong support being provided for gold amid global uncertainty right now.
With cash still pouring in from Jeffreys for the next month or two and the company’s newest gold mine firing up, punters are likely to be watching closely as the ore starts to flow from Munda, which was always going to spin off more cash than Jeffreys Find.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
