Auric snaps up key WA Munda assets in $1.4M WIN Metals deal

Auric Mining has firmed up its grip on the Munda gold mine near Widgiemooltha in Western Australia’s southern Goldfields after striking a $1.4 million deal to buy a suite of key assets from WIN Metals, including nickel rights, water access and a fully equipped mining camp.

In a move that management says will put Auric firmly in the driver’s seat, the acquisition removes several hurdles as the company pushes to expand mining operations at Munda.

Under the terms of the deal, Auric will pick up all the remaining nickel rights within Munda’s tenements and exclusive access to water from the nearby 132N open pit.

The purchase also includes a fully serviced exploration camp, six kilometres north of the mine, fitted out with solar panels, generators, bulk fuel storage and other infrastructure.

The acquisition represents more than just a property grab for Auric. By consolidating the assets at Munda, the company now has operational freedom for the first time and puts the mine in play as a long-term proposition.

Notably, by gaining full rights to all the mineral riches - with the exception of lithium still held by WIN - Auric is better positioned to ramp up gold mining without relying on third-party negotiations around the nickel.

And with exclusive rights to the site’s precious water supply stored in the 132N pit, which is a rare commodity in the dry and dusty Widgiemooltha terrain, the company has locked in a critical asset to keep its gold ambitions flowing.

Auric made the first payment of $900,000 yesterday, with a final $500,000 cheque due to WIN by the end of July.

Auric Mining managing director Mark English said: “This acquisition gives Auric greater control over our destiny for open pit mining at our Munda gold mine. We’ve moved mining at Munda along rapidly this year and are pleased this hurdle to progress our future expansion will be removed.”

Meanwhile, Auric has lit the fuse on a starter pit at Munda to grab a quick $5.3 million in cash from extracting 6100 ounces of gold. It expects to wrap up mining at the pit by October.

The initial dig will kill several other birds with one stone. By pre-stripping waste rock at a 7.6:1 ratio while gold prices are flying high, the company is laying the groundwork to slash future costs and shield itself from market volatility.

The early phase will also deliver vital insights into the broader orebody ahead of a major production ramp-up.

Below the surface at Munda, a much bigger story is looming. At a 0.5 grams per tonne (g/t) cut-off, the deposit hosts 3.65 million tonnes grading 1.23g/t for 145,000 ounces of gold. If the cut-off is loosened to 0.2g/t, that figure swells to 189,000 ounces.

A 2023 scoping study by Minecomp used a now modest US$2600 (A$3952) per ounce gold price to estimate a higher grade 1.716Mt resource at 2.2g/t gold, which, once processed could generate a whopping $76.9 million in surplus cash flow. With today’s roaring bullion prices, that number could shoot well north.

Auric is now gearing up to lock in plans for the much larger pit, with full-scale mining scheduled to kick off in 2026.

From WIN Metals’ perspective, today’s transaction offers a clean divestment of non-core assets, which were not part of its near-term plans for its 180,000-tonne Mt Edwards nickel project. The Munda nickel deposit, while hosting an estimated 7260 tonnes of contained nickel, didn’t make the cut for WIN’s development priorities.

WIN’s managing director Steve Norregaard pointed to the sluggish nickel price outlook and the company’s sharpened focus on gold as primary reasons for doing the deal.

Norregaard said the sale has unlocked latent value from an asset the company wasn’t planning to develop in the short term and funds would now be directed towards follow-up exploration at its 359,000-ounce Butchers Creek gold project in the Kimberley.

The deal seems to highlight a rare win-win transaction for the mining sector, with both parties walking away stronger and better focused.

As Auric accelerates gold production at Munda and WIN targets new ounces in the Kimberley, this asset swap may go down as a pivotal growth moment for both companies.

Is your ASX-listed company doing something interesting? Contact: matt.birney@wanews.com.au