Aureka (ASX:AKA) has signed a binding toll milling agreement with the Wedderburn Gold Processing Mill, positioning its St Arnaud Comstock Gold and Silver Project as a potential near-term production candidate.
The three-year agreement covers ore from any Aureka-nominated project on a cost-plus-margin basis, with the company funding capital upgrades to the mill if required for specific production volumes or metallurgy requirements.
This deal follows Aureka’s recent production licence submission for Comstock, located approximately 45km from the Wedderburn Mill. Aureka is advancing studies and diamond drilling to achieve a fast-to-market, low-capital operation.
“After our recent JORC increase to 455koz and production licence application at Comstock, it is pleasing to now lock in a project agnostic processing option for Aureka’s projects,” Managing Director James Gurry says.
“The potential to add Comstock ore to the feed at the Wedderburn Mill should boost utilisation and lower unit costs for all parties.”
The agreement also provides a long-term option for the larger Irvine Gold Project in the Stawell Corridor, with Aureka poised to conduct a concept study assessing parameters for processing ore from the 398,000-ounce project at Wedderburn.
Core Prospecting Director Kenneth Bush says the agreement offers mutual benefits while complementing existing production at Wedderburn.
“This toll milling agreement will help advance the St Arnaud Comstock Gold and Silver Project while giving us a mutually beneficial option to complement our own production at Wedderburn,” Bush notes.
The Wedderburn Mill currently processes ore from Core Prospecting’s Fiddlers Creek underground mine, occupying only a fraction of total available capacity.
Aureka can sponsor mill improvements, including additional crushing circuits, carbon-in-leach plants, enhanced gravity separation, and expanded tailings storage, if required.
The company has applied for a small mining licence covering less than 5 hectares at the previously mined Comstock site.
Infill diamond drilling of approximately 1,000m across six holes is underway to validate historical results and potentially upgrade portions of the current inferred mineral resource.
Comstock holds a JORC inferred mineral resource of 1.45 million tonnes (Mt) @ 1.21g/t gold (Au) for 56,500 ounces, plus an exploration target of 3–3.5Mt @ 1–1.2g/t Au for 112,000–116,000 ounces.
The St Arnaud goldfields historically produced 400,000 ounces at an estimated 15g/t Au, with Comstock last producing in 1995.
Recent drilling highlights include 1m @ 65.37g/t Au and 6.9m @ 4.24g/t Au.
Aureka is a Victorian gold company advancing several projects in the state, with total inferred gold resources of 455,000 ounces.
Write to JC Villarba at Mining.com.au
Images: Aureka
