Aureka adds gold processing firepower to Victorian push

In a savvy move, Aureka Limited has added some serious processing firepower to its board, nominating 30-year industry veteran and metallurgist Marcus Binks as it prepares to take control of an operating Victorian gold mine and a strategically important processing mill. The new hire adds a key piece to the larger transformative deal, potentially vaulting the company from explorer to producer.

Under the terms of its dual acquisition, Aureka is set to buy 100 per cent of High Grade Holdings (HGH), the parent company that owns the Fiddlers Creek gold and silver mine, along withHGH’s wholly owned Vanning Resources, the operator of the 42,000-tonne-per-annum Wedderburn gold processing mill. The $8.9 million base consideration comprises just $2.5 million in cash and $6.4 million in shares.

Binks’ candidacy was put forward by HGH as part of the deal, with his appointment expected to become effective upon completion of the acquisition in late October or early November.

With more than three decades of experience designing, commissioning and operating gold, base metal and mineral sands plants, the seasoned metallurgist is a long-term member of the Australasian Institute of Mining and Metallurgy and brings a hefty resume to the table. He has held senior roles at major operations, including processing manager at the 4.6-million-ounce Fosterville gold mine in Victoria and the 3.2-million-ounce Young-Davidson gold mine in Canada.

‘His skills and experience will be complementary as we take on the operations of the Wedderburn Mill.’

Aureka Limited managing director James Gurry

He also managed the construction and commissioning of a 1.5-million-tonne-per-annum gold processing facility for La Mancha Resources in Kalgoorlie. More recently, Binks has spent 14 years consulting to a list of clients that reads like a who’s who of the mining industry, including Agnico Eagle, Novo Resources, Gekko Systems and Strandline Resources.

Notably, the industry veteran is credited with developing the world-first “Heated Leach” process for treating preg-robbing ore – ore that robs gold out of the cyanide solution, thereby wasting metal and adding to costs – and was also instrumental in designing and permitting Victoria’s first in-pit tailings storage facility.

His operational experience is expected to be pivotal as Aureka takes the reins of the Wedderburn mill, a site Binks knows intimately, having helped HGH establish and run the facility. Notably, the acquisition is about more than infrastructure. The Fiddlers Creek underground mine is already in production and generating positive monthly free cash flow.

Aureka managing director James Gurry said: “We welcome Marcus’ nomination to the Board of Directors. His skills and experience will be complementary as we take on the operations of the Wedderburn Mill and move to bring our own gold projects into production – a process Marcus has managed successfully numerous times in his long career as a metallurgist and project manager.”

The fully licensed mill is one of only six gold mills licensed for external tolling in Victoria and currently processes ore from Fiddlers Creek. However, Aureka says the current throughput uses only a fraction of the mill’s 42,000-tonne-per-annum nameplate capacity, leaving significant spare capacity for the company to process ore from its other projects. With operating infrastructure relatively scarce in the state, control of a plant with stated spare capacity and a licence for third-party processing is potentially a strategic coup.

Perhaps just as significantly as the mill and operating mine, the company says the deal also includes considerable exploration upside on the acquired ground. The Fiddlers Creek mine lies within the Percydale goldfield, which has historically produced more than700,000 ounces of gold. The surrounding tenure contains six kilometres of mineralised structure and more than 600 historical workings, with multiple parallel quartz-reef zones that have never seen a drill bit. As part of the buyout, Aureka has committed to drilling at least 1800metres on the acquired ground.

The HGH acquisition looks set to reshape Aureka into an integrated Victorian gold company, backed by a pro-forma JORC-inferred mineral resource of 455,000 ounces of gold across its broader project portfolio.

Aureka’s existing assets are headlined by the company’s flagship Irvine project, which holds a resource of 398,000 ounces,just 135 kilometres from the Wedderburn mill. It also sits just 16km from the operating Stawell gold mine, which has a production history of more than five million ounces. Adding to the strategic nature of the Wedderburn acquisition, Aureka’s 56,500-ounce Comstock gold project sits less than 50km away.

In a gold market where prices are strong and processing capacity is king, having the keys to one of only a few mills in Victoria, particularly one attached to a cash-flowing mine, is a strategic coup. By adding the man who helped build that mill to its board, Aureka appears to be doing more than just buying an asset; it’s acquiring the know-how to make it sing.

As Aureka looks to feed its growing resource base through the Wedderburn plant, having a seasoned metallurgist like Binks at the table could be the move that turns geological potential into rolled gold.

Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au