Auric Mining has commenced the year with a significant achievement at its Munda gold mine in Western Australia, successfully completing the first pour from its second toll-treatment campaign. This operation has yielded 1147 ounces of solid gold, valued at approximately $8 million.
Processing and Production Details
The gold was sourced from a second parcel of 65,000 tonnes of high-grade open-pit material from the Munda mine. This material was processed at Black Cat Syndicate's Lakewood Mill, located near Kalgoorlie, about 80 kilometers to the north. The mill is currently operating at high capacity to meet demand.
Management at Auric Mining is moving swiftly to capitalize on favorable market conditions, with spot gold prices remaining robust. The company has scheduled another gold pour for next week and anticipates at least three additional pours from this ongoing campaign. By the end of the month, this is expected to complete the treatment of a total of 125,000 tonnes across both campaigns since milling operations began in October.
Financial and Operational Advantages
The toll-treatment arrangement with Black Cat Syndicate has proven highly effective, allowing Auric to generate revenue from the Munda starter pit without the substantial costs and complexities associated with constructing a full-scale processing plant. This batch-processing approach not only delivers substantial revenues but also provides valuable operational data on grades, recoveries, and efficiency. This information will be crucial for optimizing future large-scale mining efforts at the Munda deposit, which holds an estimated 3.65 million tonnes containing 145,000 ounces of gold.
The initial starter pit campaign, concluded before Christmas, produced 2718 ounces for Auric. Early estimates indicate that the second campaign will contribute an additional 3745 ounces, bringing the total projected haul to 6400 ounces. At current gold prices, this translates to more than $45 million in revenue, significantly exceeding original forecasts.
Market Impact and Future Prospects
When Auric initially modeled its projections for Munda, it used a conservative gold price of $3500 per ounce, which has since risen to approximately $7100. This upward trend has dramatically improved financial outcomes. The company had originally estimated about $5.3 million in free cash flow, but with elevated gold prices, this figure is now expected to be far surpassed. Assuming all-in sustaining costs of around $2635 per ounce, net cash could approach $28 million, highlighting the substantial leverage provided by a strong market.
Auric Mining managing director Mark English commented, "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."
Looking ahead, the primary focus at Munda is on the eventual main pit plan. Once the starter pit operations are finalized and data is analyzed, Auric plans to conduct detailed scoping studies to de-risk expansion efforts. The goal is to extract closer to 145,000 ounces of gold, with an average grade of 1.23 grams per tonne. If the grade cut-off is adjusted to 0.2 grams per tonne, the inventory could expand to 189,000 ounces, indicating significant untapped potential.
Strategic Significance and Industry Context
Kalgoorlie-based consultants Minecomp previously evaluated Munda in 2023, using a gold price of $2600, and outlined a setup involving 1.716 million tonnes at 2.2 grams per tonne, capable of generating $76.9 million in undiscounted surplus cash. The success of the starter pit has already demonstrated Auric's ability to produce gold efficiently while controlling overheads, serving as a commercial pilot that validates the broader Munda system.
In the competitive junior mining sector, where early successes are critical for building investor confidence, Munda stands out as a prime example of effective execution. With processing operations running smoothly, additional pours planned, and a supportive market environment, Auric is positioned for a strong performance throughout 2026, potentially leading to an enhanced balance sheet.
