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Burbanks Mill

Auric Mining

Libre Franklin

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Auric Mining has committed to buying the Burbanks mill in Western Australia, after taking an extra 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 is expected next quarter, "once various outstanding issues are resolved" and the legal documents have been finalised.

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

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

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

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

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

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

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

Capital markets would likely support the finance.

The Burbanks site is already fully permitted and has an electricity connection that could 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 a fully integrated sustainable gold producer with operational and financial independence within 3-4 years.

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

In the interim, Auric can consider a cheap refurbishment, or put more energy into defining resources.

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

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

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

A starter pit is planned at its flagship Munda project near Norseman, with tolling planned later this year expected to recover 6100oz. Parrot Feathers could follow.

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

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

Article from https://www.miningnews.net/m-a/news-analysis/4410892/auric-commits-burbanks

Auric commits to Burbanks buy