In a positive development for the Munda gold deposit in Western Australia, Auric Mining Ltd (ASX:AWJ) has fielded promising results from a scoping study assessing open-pit mining and third-party toll treatment for the deposit.
The company selected a single third-party processing plant operating under a toll treatment agreement about 82 kilometres from Munda for the scoping study and assessed a range of outcomes based on gold price.
Specifically, AWJ produced a production target for the project of between 1.67 million tonnes at 2.2 g/t for 112,000 ounces of gold and 2.18 million tonnes at 1.9 g/t for 129,100 ounces of gold, based on a gold price ranging from A$2,400-A$2,800 per ounce.
Auric expects to generate an undiscounted accumulated cash surplus after payment of all working capital costs, excluding pre-mining capital requirements, of about A$54.7 million to A$101.4 million based on these targets.
Potential cashflow surplus of A$76.9 million
“The scoping study highlights the value and viability of the Munda Gold Deposit,” Auric Mining managing director Mark English said.
“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.
“The independent scoping study highlights significant accumulated cashflow for the Munda Project.
“The adopted base case scenario at A$2,600 per ounce details mining approximately 1,716 million tonnes to generate an accumulated undiscounted cashflow surplus of A$76.9 million, a terrific outcome for Auric.
“We will continue the planning and development requirements quickly.”
AWJ is assessing Munda on a three-year mining period, with pre-mining capital and start-up costs estimated at between A$800,000 and A$1.7 million and working capital requirements of between $3.9 million and $8.1 million based on a Stage 1 starter pit design with a mine life of less than three months.
Auric says it’s confident Munda’s robust project economics will generate economic results across a broad range of gold prices.