Auric Mining has posted a stunning $28 million net profit before tax for the half-year to June, representing a massive turnaround from a small $1.35 million loss in the prior corresponding period.
The impressive result was underpinned by total revenue of $44.8 million and a powerful net operating cash flow of $33.8 million, generated primarily from the company’s Munda gold mine near Widgiemooltha in Western Australia.
The mine delivered 6168 ounces of gold during the half-year, bringing total production from its initial “Starter Pit” at Munda to 8886 ounces at an all-in sustaining cost of just A$2857 per ounce, with gold remaining comfortably north of A$6000 an ounce.
The proof of the pudding is in the eating and Auric’s bottom line suggests its disciplined approach to mining has paid serious dividends. The result puts the company in an enviable position with total assets of $62 million, including a healthy $38 million cash balance, no debt and an unhedged position to the gold price.
The company says its well-executed strategy was built on an inaugural joint venture with BML Ventures at Jeffreys Find, which was finalised last year and banked a tidy $16.5 million in cash from an initial investment of just $1.2 million.
With its saddlebags full of cash, Auric is now eyeing its ambition to become a fully integrated, mine-to-mill gold producer.
At the heart of that ambition is its 100 per cent-owned Burbanks processing plant, strategically located just south of Coolgardie and 70 kilometres north of Munda in the prolific Coolgardie-Widgiemooltha gold corridor. Armed with a healthy chest of capital, the company is touching up plans to refurbish the facility and potentially expand its current 180,000-tonne-per-annum capacity to a more substantial 500,000tpa, reducing its reliance on third-party processors and capturing more value from every ounce of gold it pulls from the ground.
This is an excellent result for Auric, reflecting our focus on disciplined capital management and execution across the business. With a strong balance sheet, an increasing production profile and exposure to a favourable gold price environment, Auric is well positioned to pursue continued growth and deliver long-term value.
While the Starter Pit at Munda has been a cash cow for now, it appears to be just warming up, with Auric already deep into planning for a much larger “Main Pit” expansion at Munda, where some 194,000 ounces of shallow gold remains.
A scoping study is underway to assess the combined development of the larger open pit alongside the Burbanks processing facility. Management also sees significant potential to access deeper, high-grade lodes beneath the planned pit through underground mining, pointing to a long-term future for the asset.
The Munda starter pit was a trial run that spectacularly over-delivered, leaving the profit it generated to be ploughed back into building a self-sufficient and long-life gold business.
With a war chest of cash, no debt and a clear pathway to owning its own production infrastructure, Auric is starting to shape up as a serious WA gold producer-in-waiting.
Is your ASX-listed company doing something interesting? Contact: [email protected]
Get the latest news from thewest.com.au in your inbox.
Sign up for our emails