Integrated study supports reestablishment of Auric’s Burbanks
Auric Mining says the outcomes of the integrated Burbanks and Munda scoping study support the reestablishment of the Burbanks processing facility and the restart of mining at the Munda gold deposit, located in the Goldfields region of Western Australia.
Reestablishment of Burbanks provides a pathway to establishing a standalone integrated gold producer, initially sourcing mineralised material from the Munda gold deposit, the company highlights.
The capital estimate for the Burbanks reestablishment has been completed to prefeasibility study- (PFS-) level accuracy.
The overall integrated Burbanks and Munda study is a scoping study, reflecting the additional technical, permitting and development work required at Munda, Auric explains.
Located about 87 km from Munda, Burbanks provides Auric with strategic control of critical processing infrastructure in a region with limited available gold treatment capacity, positioning the company to unlock value, while also creating a platform to capture future organic and inorganic opportunities, it asserts.
The quality and profitability of the Munda deposit was recently tested through the mining of a starter pit. About 202 000 t of mineralised material at 1.84 g/t gold was mined, of which 126 000 t at 2.46 g/t gold was treated in conventional third-party gold plants.
All gold produced was sold at an average price of A$7 178/oz.
The starter pit provided detailed information into the geology, recovery and mining characteristics of the mineralisation, which was used to update the mineral resource and also to calculate mining factors applied to openpit designs at a gold price of A$5 500/oz.
The overperformance of the starter pit also provides confidence in the profitability of the integrated development of Munda and Burbanks, Auric points out.
A larger singular openpit at Munda has been considered in the study, providing 2.77-million tonnes of mineralised material at a grade of 1.75 g/t gold for 155 844 oz.
Moreover, the existing starter pit stockpiles at Munda total 76 000 t at 0.81 g/t gold for 1 980 oz; 93.1% of the resource within the designed pit is indicated with the balance being inferred; recovered ounces of 141 254 oz (89.5% recovery, inclusive of existing stockpiles); the overall strip ratio of the designed pit is 11:1; and mining is planned over 32 months using conventional, owner operated equipment.
Burbanks has been redesigned to target a nominal 600 000 t/y throughput rate, allowing it to process all available material from Munda over a period of 56 months.
The plant is also designed to be scalable to 1.2-million tonnes a year through a series of simple upgrades in the future, Auric highlights.
The capital cost estimate for the reinstatement of Burbanks as a 600 000 t/y gold processing facility is $94.3-million.
This estimate has been completed to PFS-level, accurate to about 15%, by Interquip as an engineer, procurement and construction management plant build.
Owner’s capital costs are estimated at $35.8-million, to an accuracy level of about 25%.
Auric personnel completed the owners’ costs using quotes from multiple suppliers and contractors, the company assures.
The capital cost estimate for the establishment of the Munda openpit is estimated at $7.5-million, to a scoping study level (about 25% accuracy), including upgrades to offices, camp, clearing and topsoil stockpiling.
Recent mining of the Munda starter pit and already established infrastructure provide additional confidence in this cost estimate, even while additional studies are being completed, Auric notes.
Working capital requirements for the integrated project are estimated at $17.4-million, comprising four months of mining and haulage to establish sufficient processing stocks ahead of mill startup, together with the commissioning and ramp-up of processing at Burbanks.
This is partially offset by gold revenue of about $9.3-million during the commissioning period.
The integrated project provides robust financial outcomes, Auric highlights, with metrics including (at A$5 750/oz base) revenue of $812-million; peak funding requirement of $145-million; payback of 2.3 years; an all-in sustaining cost of $2 843/oz; and earnings before interest, taxes, depreciation and amortisation (Ebitda) of $437-million.
Sensitivities of the base scenario have been assessed, and the project economics are robust across a broad range of gold prices and operating and capital cost assumptions, Auric avers.
The average annualised Ebitda for the initial project is about $94-million a year, providing strong cash flow and sufficient time for Auric to bring additional feed sources online through discovery and/or acquisition, the company notes.
This study contemplates only the resource at Munda and does not include the possible benefits of production from any of Auric’s other tenements, with the company owning 521 km2 of prospective ground and exploration activity accelerating.
Munda remains open along strike and at depth.
Reverse circulation drilling started this month, targeting resource extensions.