Aurelia Metals is set to acquire the recently commissioned Dargues underground gold mine in New South Wales from Diversified Minerals for up to $205 million.
The Dargues mine only delivered its first shipment of gold concentrate in June and is anticipated to produce an average of 45,000 to 55,000 ounces of gold a year over five years.
The operation consists of an underground mine and newly constructed processing plant, which is anticipated to ramp up to around 355,000 tonnes a year by mid-2021.
It reached 30,000 tonnes a month capacity in September following a $90 million investment by Diversified Minerals in the Dargues processing, underground and surface infrastructure.
Aurelia stated that the acquisition was consistent with its goal to become a mid-cap gold-focussed producer and add a third asset to its New South Wales portfolio.
Dargues’ all-in sustaining cost (AISC) of $1150 to $1350 an ounce is also anticipated to lift Aurelia’s cost profile.
“The acquisition of Dargues is a landmark transaction for Aurelia,” company managing director and chief executive Dan Clifford said.
“… Critically, we believe the existing Dargues resource offers substantial potential upside with further extensional target drilling.
“Aurelia’s demonstrated ability in exploration, driven by its strong geological IP (induced polarisation), is expected to be a key value driver in this regard. Accelerated drilling is a priority post acquisition completion.”
The Dargues operation has an ore reserve of more than 1.1 million tonnes at 5.7 grams per tonne of gold for 202,800 ounces of contained gold as at June.
The proposed transaction is expected to close by early next year, subject to New South Wales ministerial consent and other conditions.
Aurelia also owns the Hera gold-lead-zinc-silver and Peak gold mines in New South Wales.