Auric Mining Ltd (ASX:AWJ) is a step closer to unveiling the commercial potential of the Jeffreys Find deposit near Norseman in Western Australia after signing an agreement for open pit gold mining with Kalgoorlie-based BML Ventures Pty Ltd.
The never-been-mined Jeffreys Find is a discrete gold project with a mineral resource estimate of 1.21 million tonnes at 1.22 g/t for 47,900 ounces of gold, which remains open at depth and with the deposit thickest at surface. The company's fortunes rose with the news, with shares up as much as 11.11% today.
Mining is planned in two stages, with a starter pit and final pit, and operations are expected to commence shortly.
Jeffreys Find drilling over magnetic image.
50:50 net cash split
The parties will now undertake pre-mining activities related to mine planning and permitting, including geotechnical drilling, a hydrological study and ore and waste-rock geochemical studies, a fauna and vegetation survey and a heritage survey.
A pre-mining grade control program will be undertaken together with diamond drilling for studies to better optimise mining. Auric and BML will share the cost for this program.
BML will be responsible for all mining-related capital and working capital costs, while Auric will construct a site access road and pay for all costs to permit the project.
Surplus cash after deducting all costs will be split equally between the two parties, with the agreement allowing an interim split after the starter pit is completed.
Ore extracted will be delivered to one of a number of nearby gold processing plants.
No downside risk
Auric managing director Mark English said: “This agreement with BML represents a substantial step in Auric’s growth. The skills and resources that BML bring to the project will enhance Jeffreys Find development, benefiting both companies while limiting Auric’s downside risk to zero.
“The opportunity BML presented was just too good not to proceed.”