Auric lights fuse on first blast at WA Munda gold mine
The first blast was fired earlier this week at Auric's starter pit, just weeks after excavation began, clearing the way for full-scale mining. The company says it has already managed to shift 70,000 bank cubic metres (BCM) of material in the past month from a pit design encompassing 380,000BCM.
Since much of the initial material has been free-digging, with no need for blasting, Auric would likely have scored an early cost-saving bonus before work on harder rock got underway.
Auric is using a dry-hire fleet on site that includes a 125-tonne excavator and four 40t 'Moxi' dump trucks, along with ancillary gear. Kalgoorlie-based Total Drilling Services is handling the grade control, blast-hole drilling and blast supervision to ensure operations are managed with experienced local crews.
Auric expects to extract 125,000t of ore grading 1.8 grams per tonne (g/t) gold from the starter pit, most of which will come towards the end of the initial mining at the base of the pit.
The company is eyeing a maiden 6100-ounce gold haul from early mining at an all-in sustaining cost of just $2635 per ounce. When it first crunched the numbers, Auric based its projections on a conservative $3500 gold price - enough to deliver a tidy $5.3 million in free cash.
With gold now trading at a blistering $5100 an ounce, the upside is looking far juicier, setting the stage for a much bigger payday from Munda's opening act.
The initial pit, which is part of a larger resource, is expected to be wrapped up by October.
Beneath the surface, Munda is also flexing some serious gold muscle.
At a 0.5g/t cut-off, the deposit contains 3.65 million tonnes of ore grading at 1.23g/t for a solid 145,000 ounces of gold. If the cut-off is dropped to 0.2g/t, the resource swells to 189,000 ounces across the indicated and inferred categories.
A 2023 scoping study by Kalgoorlie-based Minecomp ran the ruler over the broader Munda project and liked what it saw. Using a now-outdated base-case gold price of $2600 per ounce, the numbers pointed to 1.716Mt at an impressive 2.2g/t, which translates to a juicy $76.9 million in undiscounted surplus cash flow.
It is anyone's guess what that figure could balloon to in today's hyper-bullish gold price environment.
When the first mining phase is complete, Auric plans to finalise detailed plans for a much larger pit development at Munda, which is slated to begin in 2026.
The early $6.5 million development cost has been fully funded from gold sales generated by Auric's Jeffreys Find project near Norseman, avoiding the need for further capital raisings or share price dilution. It also kills several other birds with one stone.
By removing overburden - with a pre-strip ratio of 7.6:1 - while gold prices are strong, the company says it is likely to cut future mining costs and build resilience into the broader Munda operation against potential market swings.
The initial phase will also deliver critical insights into the larger deposit, giving Auric a chance to refine its strategy ahead of scaling up to full production.
Meanwhile, work preparing the site for longer-term operations is in full swing. Auric has completed waste dump and run-of-mine pad preparation, setting the scene for efficient ore handling and stockpiling as mining ramps up.
Given its proximity to established infrastructure and a gold price that continues to sparkle, Munda is shaping up as a key revenue driver for Auric, especially given its unhedged status, which the company says will give it full exposure to market upside.
As the gold price flirts with record territory, it appears Auric's timing couldn't be better. With equipment on the ground, blasting underway and ounces soon to be hauled out of the earth, the company is ticking every box on the path to early cash flow and long-term expansion.
Is your ASX-listed company doing something interesting? Contact:
matt.birney@wanews.com.au
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