Auric times WA Munda gold run with red-hot bullion market

Auric Mining has flicked the switch on the next stage of its Munda gold mining journey near Widgiemooltha in Western Australia, launching its second toll processing campaign and stepping firmly onto the production pathway just as the gold price hits its straps.

The company has started treating Munda ore again at Black Cat Syndicate’s Lakewood mill, right on schedule, marking another key milestone in its transition from developer to regular cash-generating gold producer. The timing could hardly be better too, with bullion prices continuing to hover near record territory adding a healthy tailwind to every ounce poured.

Although processing is just kicking off, the actual mining at the Munda starter pit has now officially wrapped up. Ore haulage, however, is still underway, feeding stockpiles at Lakewood as the treatment campaign ramps through its planned three-week run.

For Auric though, the real financial story is only just beginning, with operations hitting the sweet spot of its toll-treatment model. The heavy lifting of mining is done, the mill is humming and the company is about to convert tonnes into tangible revenues again, without having to build its own processing plant. In short, the company is running a capital-light, fast-tracked operation in a red-hot gold market, targeting strong-margin cash flows.

Management says the first gold sales from this campaign are expected to land in the second week of February, with initial cash receipts forecast for later in the month.

The completion of mining the Starter Pit at Munda and commencement of processing the second campaign at Lakewood is another huge step forward for Auric. Given the rapidly increasing gold price, we anticipate a far greater cash inflow and profit than previously expected.

The company believes the starter pit has already proven its worth as more than just a geological teaser, acting as a commercial pilot run to validate the broader Munda system, while delivering early ounces and operational knowledge.

That bigger vision is where the longer-term leverage lies. The starter pit may be the appetiser, but the Munda main pit is shaping up as the main course. Cashflows from these early campaigns will help underpin studies, approvals and development planning.

On paper, Auric’s Main Pit already shapes up as a tidy future money-spinner. The defined resource sits at 3.65 million tonnes grading 1.23 grams per tonne (g/t) for 145,000 ounces at a 0.5g/t cut-off - a solid base for a profitable operation. Ease that cut-off back to 0.2g/t and the inventory balloons to 189,000 ounces in the indicated and inferred buckets, showing there is still plenty of juice left in the system.

When Kalgoorlie mining boffins Minecomp ran the rule over Munda in 2023, they used what now feels like a relic-era gold price of A$2600 an ounce. Even with that handbrake firmly on, the scoping study at that time sketched out a 1.716-million-tonne operation at a punchy 2.2g/t, delivering a very respectable A$76.9 million in undiscounted surplus cash.

Fast forward to today’s record-busting gold prices of more than US$5000 (A$7200) per ounce and those earlier numbers look less like the grand finale and more like the warm-up act.

With mining from the starter pit complete, processing underway and gold sales just around the corner, Auric looks set to start printing cash without the typical outlay expected of more traditional mining operations.

It is now clearly on the move through a rare window for juniors - the gap between development risk and production credibility. If the next few weeks go to plan, Munda will not just be a promising gold project - it will be a cashflow story with more growth still to come.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au