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It expects to recover its first gold from mining the Jeffreys Find deposit to the south-east next month under a 50:50 profit share with local contractor BML Ventures that should start generating some significant free cashflow, allowing Auric to turn its attention to the larger Munda deposit.
A scoping study suggests Auric will need A$5-10 million to restart open pit mining at Munda, which would also use a nearby third-party processing facility about 80km away by road, likely the Greenfields mill that it will use for Jeffreys Find, but it hasn't nominated a specific facility.
Depending on the gold price, which it has modelled between $2400-2800 per ounce, Auric expects Munda to be a profitable mine, recovering between 112,000-129,100oz.
Its base case of $2600/oz suggests a gross cashflow surplus of $77 million over a three-year life.
Considering its market capitalisation of $5 million today that's a significant cash injection - even if it goes into another profit-sharing agreement.
The development would likely start with a three-month starter pit that could recover 7200oz gold for a $7.2 million surplus, effectively supporting the expanded development.
Managing director Mark English said the company would now launch a feasibility study in the hopes of getting to a final investment decision as quickly as possible to take advantage of elevated gold prices.
The first payment from Jeffreys Find is expected late next quarter. The 2022 scoping study suggested the project should generate a cash surplus of $16.7 million over the 12-month mine life.
The started pits at both projects can be fast-tracked under small mining licences.
Auric has resources of 47,200oz grading 1.35gpt at Jeffreys Find and 198,700oz at 1.35gpt at Munda.
Widgie Nickel has the nickel rights over the Munda area and is working towards extracting its metals.
The pair has previously indicated the two metals can be recovered harmoniously.
Auric shares were off 5% today at 3.8c, its lowest level in 12 months. It has traded as high as 10c.
