Ann: Auric To Purchase Burbanks Gold Facility, page-8

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Auric commits to Burbanks buy
Coolgardie mill offers junior miner a long-term processing solution

Haydn Black

Auric Mining hascommitted to buying the Burbanks mill in Western Australia, after taking anextra fortnight to complete its due diligence.

Late yesterday,the junior miner confirmed to the mortgagee, BDO Queensland's Andrew Fielding,that it would pay the A$4.4 million acquisition price.

Settlement isexpected next quarter, "once various outstanding issues are resolved"and the legal documents have been finalised.

Auric has beencircling the mill, which is 15km outside Coolgardie in the Eastern Goldfields,since December.

Themothballed 180,000 tonne per annum plant has passed among multiple owners sinceit was constructed in the early 2000s, and has not operated since 2019.

Auric bossMark English described the deal as a "highly competitive acquisitionprice" in December, when gold was trading at below $4200 per ounce.

It hassince reached above $4700/oz, and, given the price of the yellow metal hasrisen $1400/oz over the past year, cracking $5000/oz is not unthinkable, so theprice might be considered "extraordinarily cheap".

A renovator's delight?

Given theplant is small and had some issues when it was last operated, it is understoodAuric considers a simple refurbishment is no longer the only option.

MNN understands that Auric is now considering scrapping the existingfacility to build a larger facility of at least 500,000tpa.

Givendemand for processing space across the region, and the price of gold putting alot of stranded deposits within a 350km haulage distance, there is certainly acase to be made for a new build.

Capitalmarkets would likely support the finance.

TheBurbanks site is already fully permitted and has an electricity connection thatcould shave $10 million off the costs. There are also water and tailings dams.

Auric,which has been toll-treating over the past two years, could certainly be afully integrated sustainable gold producer with operational and financialindependence within 3-4 years.

Of course,building a mill has its own challenges, with high demand for staff, engineersand components, but these are not insoluble issues.

In theinterim, Auric can consider a cheap refurbishment, or put more energy intodefining resources.

Finding mill feed

Burbankscomes with some exploration ground of its own, and Auric already had a sizeablepresence in the Eastern Goldfields to which it recently added with tenements atHigginsville purchased from Loded Dog Prospecting and the Lindsay's project,which contains the partially mined Parrot Feathers deposit.

Assumingthe $4 million Lindsay's deal is finalised, Parrot Feathers could be back inproduction this year. It was abandoned in 2013 when gold was trading at under$1300/oz.

Auric hasgenerated some $12 million in free cash from two campaigns at its Jeffreys Findpit since 2023 and is looking to bank another $4 million when the final ore isprocessed at Three Mile Hill soon.

A starterpit is planned at its flagship Munda project near Norseman, with tollingplanned later this year expected to recover 6100oz. Parrot Feathers couldfollow.

Auricshares were up 6% today at 27c, capitalising the company at $40 million.

The stockhas traded between 15-41c over the past year.