Aurumin rebalance sets stage for strong 2024 in Western Australian gold ventures

After a period focused on re-balancing its asset base, Aurumin (ASX: AUN) is heading into 2024 confident it can make strong headway with its gold-focused Western Australian portfolio.

Aurumin spent a good amount of effort in the final stages of last year strategically building up its Sandstone gold position and strengthening its bank balance, while finalising the sale of non-essential assets.

In late December, the company successfully completed the sale of its Mt Dimer mining leases and miscellaneous licences in Western Australia to Beacon Minerals (ASX: BCN).

The conclusion of the deal, initially announced in mid-November, added $3 million in cash to its war chest.

Importantly, Aurumin retained an interest in the project as it is eligible for a 2% net smelter return royalty on gold production above 12,000 ounces, as well as all other minerals from the Mt Dimer mining tenements.

Iron ore interest sale

Aurumin further tidied up its acreage holdings by selling the iron ore rights for a number of its exploration licences to Mineral Resources (ASX: MIN).

The company can receive a cash consideration of $250,000 on satisfaction of the conditions precedent, while it can receive a further $250,000 on granting of the first programme of works and other progress payments up to a total of $1m on decision to mine, approvals to mine and mining.

Significantly, Aurumin has agreed to conduct MinRes-approved exploration activity and will receive a management fee for its efforts.

During the same period, Aurumin successfully raised $1.25m through a placement to Collins St Asset Management, Middle Island Resources and 7 Enterprises.

Sandstone gold project growth

During and subsequent to the December quarter, Aurumin focused on building the footprint at its flagship Sandstone gold project.

Aurumin has been granted four exploration tenements at the Central Sandstone Gold project (E57/1294, E57/1302, E57/1371, and E57/1254).

All four tenements are relatively lightly explored, with several further consolidating Aurumin’s position on the greenstone trend.

Most notably, licence E57/1254 contains three historic gold mines and adjoins Aurumin’s E57/1140 permit in the central Sandstone gold project area.

The Queen of the Range, Welcome and Phoenix mines were operated in the early 1900s and respectively produced 197 tonnes of ore at 10.58 grams per tonne gold, 376t at 27.45g/t gold, and 82t at 5.92g/t gold.

More recent exploration work has confirmed there is still high-grade gold potential within E57/1254.

Convertible note repayment

Managing director Brad Valiukas said the corporate activity undertaken during the December quarter has been important in tidying up the company’s bank balance and, in particular, paying back a significant portion of a convertible note held by Collins Street.

“Along with associated placements, this has allowed us to reduce the convertible note to $1.07m and position the company to fully clear the convertible note liability,” he said.

“During the quarter, we increased our footprint at Sandstone, with tenement applications being granted. With reduced tenure and expenditure elsewhere, we will have a clearer focus on our Sandstone project and generating critical mass for future production.”

“The December quarter has served as a partial reset for the company. We have a reduced spread of assets, have maintained our 946,000-oz gold resource base, have an improved ground position at Sandstone and have a significantly improved balance sheet and are net-debt free.”

“I am looking forward to a great 2024 for Aurumin.”

Elsewhere, the company is progressing the Johnson Range and Birrigrin Projects, which will continue to be part of future Sandstone operations.