A scoping study on Auric Mining’s Munda gold deposit in Western Australia’s Goldfields region supports the potential for open-pit mining and the processing of ore at an existing toll treatment plant, highlighting potential for “significant accumulated cashflow” even at low gold prices. The company’s study also outlined a cashflow surplus of $76.9 million under the base-case scenario.
Auric commissioned Kalgoorlie consulting firm Minecomp to conduct the independent scoping study to evaluate the viability of open-pit mining at Munda, in addition to third-party toll treatment.
The analysis pointed towards robust project economics across a broad range of gold prices, providing justifications for further work to refine material inputs and to enhance economics at Munda. The deposit sits 98km south of Kalgoorlie and within the Widgiemooltha gold project.
Auric managing director Mark English said: “The Scoping Study highlights the value and viability of the Munda Gold Deposit. We now have a roadmap to plan gold mining at Munda. There is still more to be done, but this Scoping Study provides us with a high level of confidence to proceed to mining.”
Under the base-case scenario, using an assumed gold price of $2600 per ounce, the study shows 1.716 million tonnes would be mined to generate an accumulated undiscounted cashflow surplus of $76.9 million.
The study included generating optimal pits and a stage-one starter pit design. It also considered a processing plant near Coolgardie, which is about 82km from Munda. That plant will soon be toll-milling ore from Auric’s Jeffreys Find gold deposit.
The report projected positive outcomes for gold prices ranging anywhere from $1000 to $4000 per ounce. It included a production target of 1.67 million tonnes at 2.2 grams per tonne to produce 112,000 ounces of gold, assuming a $2400 per ounce price. That would generate an undiscounted accumulated cash surplus of about $54.7 million.
Assuming a higher gold price of $2800 per ounce, with a production target of 2.18 million tonnes at 1.9g/t to produce 129,100 ounces, and the generation of undiscounted accumulated cash surplus grows to about $101.4 million.
The cash surpluses include the payment of working capital, costs but exclude pre-mining capital requirements.
A mine life of three years was considered in the study, with pre-mining capital and start-up costs estimated at between $800,000 to $1.7 million. Management notes that to achieve the outcomes indicated, estimated funding of the order of $4.7 million to $9.7 million will likely be required.
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