Aureka secures seven-year licence for historic Comstock gold mine

Aureka says the licence is a critical piece of its broader hub-and-spoke strategy to build an integrated Victorian gold company, a plan turbocharged by its recent acquisition of the operating Fiddlers Creek underground mine and the 42,000-tonne-per-annum Wedderburn gold processing mill. The $8.9 million deal, comprising $2.5 million in cash and $6.4 million in Aureka shares, took the company from explorer to producer status, delivering a cashflow-positive mine and a processing plant for its growing resource base.

Under the strategy, Aureka intends to truck ore from both Fiddlers Creek and potentially Comstock to the Wedderburn mill, about 45 kilometres away. Management says the mill, one of only six in Victoria licensed for third-party tolling, has ample spare capacity to handle the additional feed.

Comstock already hosts a JORC-inferred mineral resource of 1.45 million tonnes grading 1.21 g/t gold for 56,500 ounces, plus 100,000 ounces of silver. Beyond that, the company has outlined an exploration target of between three and 3.5 million tonnes. Aureka believes the conceptual resource could add between 112,000 and 116,000 ounces of gold and between 195,000 and 214,000 ounces of silver to its global inventory, currently 454,800 gold ounces.

Recent drilling has supported the project's potential. A hole in the Comstock Shear returned a 4.4-metre hit assaying 8.9 g/t gold and 57.8 g/t silver from 102.8 metres downhole, including a 0.3-metre section grading 65.37 g/t gold from 116.2 metres with visible gold at 109 g/t; a duplicate sample from the same interval returned 95.6 g/t gold. Drilling at the nearby Walkers Zone also returned shallow high-grade results, including 2.65 metres at 5.78 g/t gold from 20.5 metres, with a richer 0.35-metre core grading 34.2 g/t gold.

Managing director James Gurry said the company intends to operate Comstock alongside the already producing Fiddlers Creek underground mine, with both feeding into the Wedderburn mill. "Our focus over coming months is integration, production optimisation and realising free cash from Fiddlers Creek - while in parallel - taking the next pre-development steps to turn Comstock once again into production reality thanks to this licence approval."

Aureka has not made a final decision to mine and must still secure an approved work plan, lodge a rehabilitation bond and obtain consent from the Crown Land Minister. It will also continue consultation with the Dja Dja Wurrung Clans Aboriginal Corporation under a Land Use Activity Agreement.

While Comstock is a near-term development opportunity, the company's long-term growth is underpinned by its flagship Irvine project, which hosts a 398,300-ounce resource. Recent drilling there expanded the project's potential footprint, with a scout hole hitting gold 725 metres north of the existing 358,000-ounce Resolution lode resource boundary, opening ground for follow-up drilling in addition to the already identified two-kilometre gap between Irvine's Adventure and Resolution lodes.