This article is a sponsored feature from Mining.com.au partner Aureka. It is not financial advice. Talk to a registered financial expert before making investment decisions.
When Aureka (ASX:AKA) resumed activities in late 2024, it did so with one of Victoria’s largest portfolios of advanced stage exploration and pre-development gold projects.
The initiative for Aureka to commission and deliver the St Arnaud Comstock mineral resource estimate (MRE) on existing data in the current favourable gold price environment, demonstrates the determination to fully exploit the hidden pockets of value within the project portfolio.
At the time of writing the gold price was sitting at US$3,365.70 ($5,179.60).
The St Arnaud Project is located in the Stawell Structural Zone with the St Arnaud Fault in the east and Percydale Fault in the west, which are both prospective for orogenic gold mineralisation.
Previous exploration programs by Aureka have upgraded the priority of the Nelson and New Bendigo Lines. The St Arnaud Gold Project is considered highly prospective for the discovery of orogenic and intrusive-related gold.
Managing Director James Gurry calls St Arnaud Aureka’s “near-term producer project” with a history as rich as the state’s gold mining history in which it is situated.
“It’s an open pit that boomed when it was mined into the 1990s,” Gurry tells Mining.com.au.
In fact, the St Arnaud Gold field was mined from the mid-1850s to the early 1900s, producing about 400,000 ounces of gold at an average grade of 15 grams per tonne. The most significant production was from the Lord Nelson Shaft which reached a depth of 786m2.
Gold is hosted within quartz reef systems that have developed in steeply west dipping thrust faults proximal to a fold hinge, similar to the Fosterville Gold Mine.
Mining licence EL006819 overlies the historic St Arnaud goldfield where extensions to known mineralisation present key targets. The quartz reef systems can extend for a few metres to a few kilometres along strike but are usually a few hundred metres strike length.
It’s one of Aureka’s shining gold projects in its Victorian portfolio, which includes its flagship asset – the Irvine Gold Project located in Western Victoria, 16km south of the Stawell Gold Mine.
About $11.5 million has been spent at Irvine since its acquisition in 2015. The project area occupies the northern portion of the historic Ararat Goldfield which is estimated to have produced roughly 600,000 ounces mostly from alluvial sources. Less than 20km north of this is the Stawell Gold Mine where an impressive 5.3Moz has been produced.
St Arnaud: Meaningful lift
More recently, at St Arnaud Aureka announced a maiden JORC resource and exploration target for the Comstock prospect within the project area. The prospect is located in Western Victoria, 65km northeast of Stawell and 90km west of Bendigo, and was last mined in the 1990s.
A maiden JORC mineral resource of 1.45 million tonnes at 1.21g/t gold for 56,500 ounces gold has been determined and additionally, an exploration target around the inferred resource has been estimated to range between 3Mt and 3.5Mt, at grades 1.2g/t to 1g/t resulting in an exploration target range estimate of 112,000oz to 116,000oz of gold and potentially economic amounts of silver at a grade of 2.14g/t silver for total of 100,000oz silver.
The additional target results in a “meaningful lift” in Aureka’s already substantial gold inventory that until now was made up of only the Irvine Project in the Stawell Corridor.
The addition of the St Arnaud Comstock MRE increases the global gold inventory of Aureka’s project portfolio by 19% to 360,800oz, and adds a further exploration target defined for up to 116,000oz, which diversifies the gold production potential by adding another project with a classified JORC resource and exploration target – that is, a potentially economic inventory of gold.
Gurry says the project is indicative of the type of high-grade, quality gold assets that the state of Victoria has offered for decades.
All that glitters is gold
Victoria is a world-renowned gold province with a variety of deposit styles and pre-competitive geoscientific data and knowledge to improve targeting and reduce mineral exploration risk. Overall, the state has produced more than 2,500 tonnes (80 million ounces) of the precious metal.
The Geological Survey of Victoria regularly scans exploration and mining activity and compiles a list of recently issued media releases by companies. There are only about 20 ASX-listed gold companies active in the state, including Aureka.
Victoria has 13 goldfields each of which has produced more than 1 million ounces, however there are two major fields Bendigo (22 million ounces) and Ballarat (12 million ounces) – Aureka has a project in each of these fields also.
Many of these old goldfields offer opportunities to reopen mines or find totally new deposits through modern exploration techniques, according to the Geological Survey of Victoria.
Stawell and Woods Point-Walhalla are also major fields, with a growing production profile and resource base at Fosterville.
Although Victoria receives less attention than other gold mining states such as Western Australia, production and exploration expenditure remain buoyant. Production is in the order of about 650,000 ounces of gold per annum, coming mainly from four deposits including the world renowned Fosterville Gold Mine owned by Agnico Eagle (TSX:AEM).
According to the Geological Survey of Victoria, the state’s prospectivity potential is significant, “based on a long history of production and the presence of large, under-explored but highly prospective areas, including greenfields areas beneath shallow cover”.
For example, simulations by the survey suggest there may be up to 75 million ounces of the yellow metal still to be found in the northern parts of the Stawell, Bendigo, and Melbourne zones, including multiple million-ounce occurrences.
Aureka’s Victoria secret
As Gurry tells this news service, there is still plenty of upside in this historic gold mining jurisdiction.
“Industry valuations don’t always reflect true value but we’re the ones with the largest portfolio of advanced exploration gold projects. So there’s a lot of latent value there,” Gurry says.
In March, Aureka acquired 97 hectares of land strategically encompassing its primary exploration tenements at the Irvine project in the Stawell Gold Corridor. This decisive move ensures uninterrupted access to the company’s established JORC resource of 304,000 ounces, its substantial exploration target of 280,000 to 420,000 ounces, and vital exploration areas.
The purchase shows Aureka’s confidence in Irvine as one of Victoria’s largest undeveloped gold resource projects, and means a permanent presence on-site, flexibility in drill programs and provides for future infrastructure options. Gurry says overall, it will increase efficiencies as the exploration team uncover the full potential of the Resolution and Adventure lodes that comprise the Irvine Project.
“We have also appointed a world-class exploration manager a few weeks ago, and that might be a good thing to dovetail into, given that Jozef has been working remotely from Victoria for years. His family has been here in Melbourne, but every month he’s been flying out to Tanzania and working with Barrack on their African operations,” Gurry continues.
“And he’s seen the opportunity to come back to Victoria to help us, which is our tagline on our website when you go there, ‘Bringing Victoria’s gold to life’. He’s coming to do that for us.”
On 9 May, Jozef Story was appointed senior exploration manager. Story spent the past four years as Exploration Manager at Barrick Mining (NYSE:GOLD) where he was responsible for managing, developing, and exploring their entire 5,000km2 exploration portfolio throughout Tanzania.
Gurry says Story will implement the real structure to make Aureka a far more effective advanced explorer and project developer.
“So we’re already talking to another couple of junior staff members, so that we can start to implement a more structured approach now that our projects are gaining momentum. Previously, the contract exploration manager was important for getting us up and going after the recapitalisation, he hired a drill rig, got going and everything. But Jozef will bring a little bit more rigour, thoroughness and structure to our approach as we go forward to fully exploit the exploration potential our projects have,” he continues.
Gurry explains to Mining.com.au that it’s Aureka’s responsibility to be thinking long-term and start thinking about what’s going to help in terms of the company developing its projects and advancing them down the line.
“Our projects have already had, particularly the Irvine project, over $20 million worth of previous drilling. It’s a 300,000 ounce project and has a substantial exploration target on top of that,” he continues.
“So there’s been a lot of work on it. And now our task is to pick up that project and advance it to the next stage, which is really getting it ready for development. So not only is it doing the exploration and growing the size of the resource, but also doing the other things that derisk the project and make it development ready – if it is Aureka or project partners that might take that eventual step.
“This project is part of Victoria’s future”
“We’ve bought a couple of farms that sit on top of the gold to give us a permanent presence on the ground there, to give us a permanent presence in the community, and just to show people that we’re dead set serious about the long term potential of the project. This project is part of Victoria’s future.”
Longer term Aureka’s strategy is to de-risk its projects ready for development. The company sees plenty of risks in raising large amounts of development capital given its $11.26 million market capitalisation.
Ideally, Gurry would like to grow the size of the project, de-risk development hurdles and challenges, such as ensuring good community relations and starting the pathway of regulatory approvals. Owning or controlling some of the land helps accelerate this process.
“And then we can take a project of development size which has been desrisked through these other initiatives, to a medium or a large industry player and say, ‘Look, all you need is your expertise and your capital. We’ve done all the hard work over the last couple of years. This thing’s development ready’. We might then JV it or they could buy it outright,” Gurry adds.
“So that we’re lessening that capital burden on our shareholders. We really want to create value by growing the size of the project and doing those de-risking things. The de-risking thing is really about the ultimate exit, making it easy to sell it to someone or JV it, and growing the size of the project is really about adding the in ground value that can be reflected in our market share price as we progress.
“This provides the highest returns on equity and highest potential share price performance, measured in return multiples rather than percentage return – creating genuine project value from low expectations, as reflected our current market valuation, is what really excites the Aureka team”
Other gold miners in Victoria include Agnico Eagle Mines, Catalyst Metals (ASX:CYL), Falcon Metals (ASX:FAL), Mandalay Resources (TSX:MND), and Southern Cross Gold (ASX:SXG).
Eureka! Digging into Victoria’s history
In Australia in the years between 1851 and 1860, Victoria’s population ballooned from less than 100,000 to more than half a million as the state’s gold rush brought with it prosperity but also problems. Disgruntled with the way the colonial government was administering the goldfields, on 30 November 1854, miners at Ballarat swore allegiance to the Southern Cross flag at Bakery Hill and built a stockade at the nearby Eureka diggings.
Early morning on Sunday 3 December — while only lightly guarded — some 300 mounted and foot troopers, as well as police attacked the stockade killing at least 22 miners — including one woman — with five soldiers also losing their lives.
The miners’ revolt at Eureka Stockade is a pivotal event in the development of Australia’s political systems and for shaping the attitudes towards democracy and equality.
It was a short-lived rebellion, but the Eureka Stockade continues to influence Australian politics to this day. In the words of former leader of the Australian Labor Party and High Court judge Doc Evatt: “Australian democracy was born at Eureka.”
Formerly known as Navarre Minerals, Aureka in December 2024 officially finalised its new identity after undergoing a raft of changes, including appointing a new director and management team, recapitalisation, and resuming trading on the ASX.
These achievements have reinvigorated the company, enabling it to refocus on its core purpose and carry out continuous exploration programs that are currently underway.
The name — Aureka — is a fusion of the elemental symbol for gold (Au) and the Greek word ‘eureka’, which means ‘I have found it’, symbolising discovery and triumph.
The rebrand reflects Victoria’s rich gold heritage, which is where its portfolio of assets are based.
Since the company’s shares were suspended in June 2023, Aureka has re-emerged debt-free with a reorganised capital structure and no outstanding convertible debt. It has also emerged as a junior gold explorer with advanced stage projects on a legitimate pathway towards production.
Write to Adam Orlando at Mining.com.au
Images: Mining.com.au & Aureka
