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By Doug Bright
Aureka Limited has taken a major step towards early gold production at its St Arnaud Comstock Project, 125 kilometres north-northwest of Ballarat in Victoria, by engaging small-scale mining specialist and local mill owner Core Prospecting.
Under the deal, Core will be responsible for undertaking a comprehensive scoping study in the first quarter of next year, covering regulatory pathways, engineering, and logistics. The study will also look at targeted drilling and milling options, including processing Aureka’s Comstock ore at Core’s under-utilised Wedderburn milling facility, just 45km northeast of the mine site.
Aureka Limited will partner with mining and processing specialists Core Prospecting to assess and develop its St Arnaud Comstock project.
Core’s Wedderburn plant has a nameplate capacity of about 42,000 tonnes per year, and features both gravity and flotation circuits, coupled with wet and dry tailings storage. The processing facility already services Core’s own Fiddlers Creek underground mine, 54km south of Aureka’s project, which itself is expected only to take up a fraction of that throughput capacity.
The Wedderburn licence allows for the toll-treatment of third-party ore, which opens a clear pathway for Aureka to take advantage of existing infrastructure and Core’s nine years of Victorian small-mine start-up experience.
“This engagement significantly de-risks Aureka’s potential pathway to first production.′
Aureka Ltd managing director James Gurry
Aureka’s Comstock pit – last mined in 1995 – sits within the historic St Arnaud goldfield, which has produced 400,000 ounces at an impressive 15 grams per tonne (g/t) gold.
Aureka Ltd managing director James Gurry said: “This engagement significantly de-risks Aureka’s potential pathway to first production. Core’s operational expertise in small scale production, their established licenses and the potential opportunity to utilise the Wedderburn Mill could eliminate years of permitting.”
Earlier this year, the company posted a maiden JORC inferred resource at Comstock of 1.45 million tonnes grading 1.21g/t gold and 2.14g/t silver for 56,500 ounces of gold and 100,000 ounces of silver.
The fresh resource forms part of Aureka’s estimated mineral Exploration Target at Comstock of between 112,000 and 116,000 ounces of gold within an estimated grade range between 1.0 and 1.2g/t gold.
The company’s ambitions to hit that exploration target recently received a big boost after drilling in the area delivered outstanding high-grade intercepts, highlighting the potential for a small but very high-margin starter operation.
Standout results include one hole, which delivered 1m at a whopping 65.37g/t gold from 116.2m, including 0.3m parading an eye-watering 109g/t gold and 0.4m at 65.4g/t gold.
A second hole gave up 6.9m running at 4.24g/t gold from 422m, including 0.75m going 18.6g/t gold from 422.1m. The hole also intercepted a deeper 3.2m slice at 4.71g/t gold from 434m, including 0.6m grading 19.9g/t gold from 435.9m.
Those bonanza grades sit close to Aureka’s current inferred resource and strongly support management’s view that small-scale, high-grade mining can deliver robust early cash flow.
Adding to Aureka’s growing gold inventory, the company has continued to pursue an aggressive exploration strategy at its flagship Irvine Project near Stawell, 66km southwest of Comstock.
The Stawell project currently hosts 304,000 gold ounces grading 2.43g/t and Aureka hopes to further boost those numbers at the site, with an exploration target of between 280,000 and 420,000 ounces of gold within a grade range between 2 and 3g/t gold.
With gold currently above A$6300 per ounce and a proven high-grade starter pit only 45km from Core’s high-quality spare milling capacity, Aureka has positioned Comstock as one of the most credible near-term, small-scale production stories in Victoria.
The scoping outcome early next year will be closely watched and a positive result could see the company pouring its first gold well ahead of its peers in the strongly contested region.
Is your ASX-listed company doing something interesting? Contact: mattbirney@bullsnbears.com.au
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