Auric Mining Limited (ASX: AWJ) has entered into an agreement with BML Ventures Pty Ltd for the mining of the Jeffreys Find deposit in Western Australia.
The Jeffreys Find deposit is a discrete gold project within M63/242 with a Mineral Resource Estimate of 1.21 Mt @ 1.22g/t for 47,900oz Au (0.5 g/t Au cut-off)1. The deposit is thickest at surface, remains open at depth and has never been mined.
Auric recently completed metallurgical testwork which defined excellent characteristics for conventional CIL processing and then completed a Scoping Study for open-pit mining and third-party toll treatment of the Jeffreys Find gold deposit.
The results of the study were positive such that the agreement with BML is a logical next step in the progression to mining the Jeffreys Find deposit.
Various pre-mining activities relevant to mine planning and permitting will now be undertaken in conjunction with BML, 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 programme will also be undertaken to assist with mine planning.
“This agreement with BML represents a substantial step in Auric’s growth,” Managing Director, Mark English, said.
“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.”
BML is a privately owned company based in Kalgoorlie and has a strong track record of funding, developing, and operating open pit gold mines. With a strong technical focus, BML leverages its low-cost owner/operator mining fleet and its relationships with local toll treatment operators to maximise profitability and cash generation from small to medium sized mining projects.
The material terms of the agreement with BML are:
• AWJ and BML have entered into an agreement for open pit mining at the Jeffreys Find Deposit within the Jeffreys Find Gold Project.
• AWJ will be responsible for all costs associated with permitting the project, and with construction of a site access road.
• A pre-mining grade control program will be undertaken together with diamond drilling for studies to better optimise mining. Costs for these programs will be shared AWJ 50%: BML 50%.
• Upon a decision to mine, BML will be solely responsible for all capital costs and payment of haulage, staff, equipment, contractors, and all working capital costs associated with mining.
• Processing arrangements are to be entered into with one of a number of third party processing plants in the region.
• BML must give AWJ its operating and financial budgets for mining the Jeffreys Find Deposit and any variations to budget where the variation increases budgeted costs by more than 10%.
• Net cash surplus (ie. surplus cash from the sale of product minus costs incurred by BML and toll milling costs in connection with mining the Jeffreys Find Deposit) will be split AWJ 50%: BML 50%.
• Mining is planned in 2 stages, with a starter pit and final pit. The agreement includes provision for an interim split of surplus cash following the completion of the starter pit.
• The term of the agreement will continue until the earlier of:
a) Final distribution of all cash generated from the sale of product from the Jeffreys Find Deposit:
b) BML has not undertaken mining (or actively investigated the merits of mining) the Jeffreys Find Deposit for a period of 12 months from the last activity or expenditure incurred by BML on the Jeffreys Find Deposit:
c) Mining of the Jeffreys Find Deposit has not commenced within 18 months of the date of the agreement except where any delays are unavoidable to BML, or:
d) The agreement is otherwise terminated by a party for breach of a material provision by the other party.
Jeffreys Find Project
The Jeffreys Find Project comprises mining lease M63/242 and miscellaneous licence L63/97. It lies around 45km northeast of Norseman in Western Australia. Gold mineralisation identified at the Jeffreys Find Project includes the Jeffreys Find Deposit and the Neo Prospect which is around 550m to the northwest of the Jeffreys Find Deposit.
This mineralisation is associated with a moderately south westerly dipping Banded Iron Formation (BIF) unit which is distinctive in magnetic images over approximately 1.6 km.
The BIF comprises magnetite-grunerite chert and is bounded by sandstones, siltstones, cherts and limestones. Auric undertook an RC drilling program at Jeffreys Find in September 2021 with seven vertical holes drilled adjacent to earlier drill holes used in estimation of resources for the Jeffreys Find Deposit, providing good spatial coverage of the deposit for metallurgical testwork and at the same time confirming earlier drill results.
Gold mineralidation is thickest near surface and open beneath current drilling to at least 110m vertical depth.
Mining is planned in two stages: a starter pit and final pit. The agreement includes provision for an interim split of surplus cash following the completion of the starter pit.
BML and Auric are now working together to obtain approvals with a view to commencing operations in the short term.
For further information please visit: https://www.auricmining.com.au/
