Auric Mining has announced a conditional agreement to acquire the Burbanks gold processing facility near Coolgardie, Western Australia.
The acquisition, subject to due diligence, is set to enhance Auric Mining’s operational capabilities.
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The company has until 10 February 2025 to complete its due diligence on the transaction, after which a cash payment of A$4.4m ($2.7m) is scheduled for settlement on 15 March 2025.
The Burbanks plant is a fully permitted facility with a capacity of 180,000tpa.
It includes primary crushing, grinding and carbon-in-leach (CIL) processing, along with elution, gold room, laboratory and administrative facilities.
The plant’s strategic location offers potential synergies with Auric’s existing projects and regional network, allowing for improved operational efficiency.
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By GlobalDataThe facility, which ceased operations in June 2019, requires refurbishment and a review of its long-term operations.
Auric Mining views the acquisition as a value creation opportunity, given the substantial discount to current and replacement values.
The acquisition will enable the company to gain full management control of the production cycle, reducing its reliance on third-party toll milling.
Auric Mining plans to upgrade the production capacity of the Burbanks plant and will engage expert advisers to assess optimal mill size and costing scenarios.
The company is confident in optimising the plant to process its own ore and potentially serve third parties for toll treating or similar arrangements.
Auric Mining managing director Mark English said: “We are firm believers in the tenet that ‘money is made when you buy’, in that buying quality assets at depressed valuations makes outsized value creation more probable. We will do that with Jeffreys Find Gold Mine, spending $1.4m cash on the asset to ultimately expect to generate far more than ten-times that in free cash within four years.
“We are well positioned to do it again with Munda. Through the highly discounted potential acquisition of the Burbanks Plant and related assets for a total potential outlay of A$4.4m, we have the foundations of doing it yet again.
“The plant has nameplate production of 180,000tpa, is ideally located, and most importantly has all the key infrastructure and approvals in place to fast-track Auric towards becoming a fully integrated sustainable gold producer in the heart of the Goldfields with complete control over our production. We will conduct due diligence in the coming months and look forward to updating investors on the outcome of that.
“This potential acquisition enables Auric to control its own destiny and represents a significant step in the company’s growth and evolution toward being an independent, integrated producer.”
