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Small-scale eastern gold fields miners surfing cash wave

The booming gold price has been a boon for junior gold companies with resources, allowing them to surf a wave of cash that was unthinkable a few years ago.

Around Kalgoorlie in Western Australia, years of work by Horizon Minerals and Auric Mining have given each the ability to generate growing sales.

Auric was one of the first small-scale miners in the latest gold boom, revealing today a A$4.1 million net profit after tax for the 2024 financial year – a 212% jump on the year prior.

The company delivered a maiden $1.1 million profit for 2023 from its Jeffreys Find stage one pit.

Stage two coincided with a surge in the spot gold price, which started 2024 at around $3000/oz and is now around $4970/oz.

Average sales for 2024 to the Perth Mint were at $3900/oz.

Earnings are split with Auric's profit-sharing partner, Kalgoorlie's BML Ventures.

Auric is aiming for an even stronger 2025, with a starter pit at the larger Munda project near Widgiemooltha set to begin next month.

Munda's dominance this year on the balance sheet won't be unchallenged. What is expected to be some of the best 60,000t of ore from Jeffreys Find stage two is still sitting on the ROM pad. It will be processed at Focus Minerals' Three Mile Hill mill in July.

If the gold price keeps rising, so will the revenue. It is estimated that every $100 increase in gold prices will grow revenue by around $300,000.

Auric is finalising a $4.4 million purchase of the 180,000tpa Burbanks mill that will free it from relying on tolling agreements.

Elsewhere in the region, Horizon is also working with BML in what is shaping up to be a similarly profitable relationship, although developing multiple pits at the same time across two projects and in two different structures is not without teething issues.

The company has now booked its first revenue from its 100% owned Boorara operation of $4.95 million based on an average sales price of $4256/oz. Some 1163oz was recovered from the first tolling campaign at Norton Gold Fields' Paddington mill.

The income has also started to flow, with the first 37,000t of ore from the Phillips Find JV with BML processed in February. The partners recovering 1675oz with an average sales price of $4728/oz, generating almost $8 million in revenue.

While open pit operations at Boorara have allowed 100,000t of high-grade ore to be stockpiled, grade control drilling has posed some geological issues at Phillips Find.

The tonnes at the Newhaven pit have been reduced, but they have increased at Newminster, and the ore has proved to be deeper than expected.

A revised mining schedule has pushed out the milling schedule beyond the scope of the processing agreement with FMR Investments' Greenfields mill, so Horizon will fill that mill with ore from Boorara.

A tolling allocation for the 70,000t from Phillips Find has now been secured with Focus from September.

Horizon managing director Grant Haywood said the economics were expected to be improved relative to the original plan, with the higher gold price significantly offsetting additional mining costs.

Horizon expects to see steady sales well into 2026.

The revenue will be used to help redesign the 2.2Mtpa Black Swan nickel plant mill for gold production as part of a wider plan to ramp up production across Horizon's consolidated 1.8Moz Eastern Goldfields portfolio towards 100,000ozpa.

Auric shares were off 2% today at 27c, capitalising to $40 million.

Horizon shares were off 5% to 6c, valuing it at $135 million.

Auric Books Record Cash