Aurumin makes strategic Sandstone gold expansion move
Aurumin (ASX: AUN) has pulled off a strategic plan to significantly expand its interests in the historic Sandstone gold mining region in Western Australia.
Already a major player in the Southern Cross area where Sandstone is located, Aurumin has added to that position of strength with an agreement to acquire private company Kurnod.
Kurnod was recently successful in landing exploration tenement applications E57/1294 and E57/1302 which were drawn from the first time in tenement ballots held by the WA government.
The two applications are of particular interest to Aurumin due to being either located adjacent to, or in the vicinity of, the company’s existing tenure and near the “flagship” Sandstone operations which has a total Resource of 946,000 ounces of gold.
Managing director, Brad Valiukas, said the strategic acquisition allows the company to further expand its footprint in the Sandstone region, including a new area directly adjacent to Aurumin’s existing mining assets at Sandstone.
“The tenements, when granted, will provide additional exploration opportunity, as we focus on generating critical mass for future production at Sandstone.”
Tenements
The key application, E57/1294, is located just south of the township of Sandstone and adjoins the Central Sandstone mining tenements to the north-east.
To date E57/1294 has received limited exploration, mostly first pass regional activities, made up of surface sampling and wide spaced reconnaissance drilling.
The second application, E57/1302, lies to the west of the 881,000 ounces Central Sandstone Project. Its acquisition will help Aurumin consolidate its coverage of the greenstone trend which hosts the Bellchambers, Bulchina and Golden Raven mineralisation within the Central Sandstone holdings. The application area contains only six drillholes known to have been completed to date.
The two applications have been the subject of limited exploration to date, however, Aurumin is looking to remedy that.
The company is already compiling and validating data for the project areas, including data sourced from open file reports and from a historical database it acquired as part of its purchase of the Sandstone project in 2022.
Key acquisition terms
Aurumin will trump up $32,087 in consideration cash and provide the sellers with one million Aurumin shares at a deemed issue price of $0.03.
The sellers will also receive a 1% net smelter return (NSR) royalty.
Significant gold asset
Aurumin’s Central Sandstone project is made up of granted tenure covering 112 sq. km, including two Mining Licenses.
The project also includes a non-operating 500,000 tonnes per annum (tpa) Carbon-In-Leach (CIL) processing plant, associated infrastructure, operating licenses, permitted tailings storage facility and bore field and camp facilities located.
The Central Sandstone project is located just 12km south of the historic gold rush mining town of Sandstone, and approximately 520km northeast of Perth.
Notably, Sandstone has a well-maintained airport capable of servicing FIFO operations.
More than one million ounces of gold has been produced from surface, open pit and underground operations in the Sandstone area since the 1890s.
Most recently Troy Resources (ASX: TRY) extracted and processed a combined total of approximately 4.4 million tonnes open pit of ore at an average grade of 3.6 grams per tonne gold for production of 508,000 ounces of gold before the operation was placed on care and maintenance in September 2010.
Middle Island Resources (ASX: MDI) acquired the project in 2016 and explored there up until 2021.
In December 2021, Aurumin entered into an agreement to acquire the Central Sandstone Project from Middle Island for $12 million in cash and shares.
Processing plant and infrastructure
The project’s assets include a processing plant which was upgraded to a 500,000 tonnes per annum facility by Troy in 1999.
Troy operated the plant from 1999 to 2010, processing a total of 4.4 million tonnes of ore to produce approximately 508,000 ounces of gold at an average grade of 3.6 grams per tonne.
The plant was placed on care and maintenance in September 2010 and has not operated since.
The project also contains a 57-person owner’s camp, a 36-person contractor’s camp, and an 8-person exploration camp and core farm – all located on freehold titles within the town of Sandstone, 12km north of the plant.
In addition to the Sandstone gold operations, the company has a significant landholding at its Southern Cross operations, including two historical high-grade production centres at Mt Dimer and Mt Palmer.