A highly strategic acquisition of a fully permitted and operational gold mine and processing plant has catapulted Aureka (ASX: AKA) into the league of ASX-listed gold producers, with the cashflow positive 42ktpa Wedderburn mill currently processing 7g/t Au ore from the Fiddlers Creek mine at 86% recovery rates and with 90% payabilities. Full utilisation of the current plant could generate annual revenue of $18.8m at a $6,000/oz (US$4,225/oz) gold price with a blended grade of 3g/t Au when mixed with ore from St Arnaud, but critically – AKA could pretty easily increase the headline milling capacity by bolting on additional infrastructure. The full suite of mining and processing permits, which include milling external ore, cumulatively took 7 years to be issued – and is now owned by Aureka. The deal follows a raft of resource expanding and high grade hits from multiple ongoing drilling campaigns, with 4.4m at 8.9g/t Au from 102.8m hit beneath Comstock’s southern pit, shallow Walkers results including 0.7m at 57g/t Au from 45.5m, and 3.92m at 4.74g/t Au from 238.82m in a new structure outside Irvine’s resource model. A Comstock resource and scoping study update is targeted for Q4 2026, and AKA currently has resources of 455koz at 2.27g/t Au across its entire Victorian gold portfolio, with an additional 545koz in JORC Exploration Targets that it is aggressively drilling with the goal of hitting 1Moz while simultaneously rapidly expanding its production profile. The company banked a $5.65 million placement in conjunction with the acquisition, along with a $1.5 million in the share purchase plan that is set to close today – taking AKA’s market cap to just $32.6 million at $0.12/share.
There is just 45km between AKA’s St Arnaud Comstock and Wedderburn, where the existing gravity and flotation circuits, wet and dry tailings facilities and concentrate offtake arrangements provide the processing infrastructure for this exciting production route. The mill holds a granted mining licence as well as approval to accept external ore, and AKA has already conducted a mining study and submitted a mining licence application at St Arnaud’s Walkers Pit, to mine ore straight from where the production at the pit last finished. The latest assays followed up on intercepts including 14m at 7.2g/t Au from 18m and 2.2m at 27.4g/t Au from 63.2m, and the acquisition of Wedderburn will fast track the company’s plans to develop this high grade asset.
There are only 6 operating mills in Victoria, and AKA now owns one of them – which was assembled from second hand equipment acquired at massive discounts. This is a strategy that AKA can utilise to expand the headline 42ktpa figure, and a recent example is $1.2m that secured Auric Mining (ASX: AWJ) a package of second hand equipment supporting its initial 600ktpa Burbanks plant design, which had an estimated replacement cost of $15m to $20m. The purchase includes a three stage crushing circuit, ore bin, conveyors, milling structure and associated infrastructure, plus spare crushers and parts. Located at a closed NSW mine, the equipment is scheduled for relocation to Burbanks and will carry extra costs for transport and assemblage. There’s a decent amount of second hand infrastructure floating around Victoria and the rest of Australia, so it could be interesting to see what AKA can piece together around Wedderburn’s existing facilities.
Victoria’s mining permitting processes have come a long way over the past few years, but it’s still a lengthy journey with many checks and balances that come with certain levels of uncertainty – and AKA has effectively removed most of this risk through the acquisition, so it’s worth hypothesising what potential expansions could look like. An additional 400ktpa circuit would lift combined capacity to 442ktpa, producing approximately 33k payable ounces and $198m in annual revenue at the same 3g/t Au blended grade, 86% recovery, 90% payability and $6,000/oz gold price. Carrying the same assumptions to an additional 500ktpa equates to 40,462 payable ounces and $242.8m revenue, while an additional 600ktpa lifts the output to 47,928 payable ounces and A$287.6m revenue. Sustaining those throughputs would obviously require a substantially larger mineable ore inventory – which AKA has tangible prospects of building – as well as demonstrated metallurgy and feasibility studies, which are in the process of being completed. AKA is building out an extensive operational team to ensure these expansion plans are executed with a level of precision, and the recent appointments include world renowned metallurgist Marcus Binks and experienced Victorian mine developer COO Zane Smith.
Comstock’s latest southern intersection sits just 48m below the pit floor, with the highest grades concentrated along the fault’s hanging wall. Together with the earlier 1m at 65g/t Au from 116.2m north of the pit, this result supports more than 500m of mineralised shear. At Walkers, additional results include 2.65m at 5.78g/t Au from 20.5m, including 0.35m at 34.2g/t Au from 21.5m, and 1.9m at 5.63g/t Au from 56.5m. These shallow results and existing pit access support selective underground extraction for Wedderburn, targeting higher grade zones within the broader 56.5koz resource grading 1.21g/t Au. The 13 hole, 1,100m program provides infill data and metallurgical samples for the Q4 2026 resource and scoping study update, ahead of targeted mining licence approval in the first half of 2027.
At the Irvine project, a new structure around 80m west of the Resolution Fault returned 3.92m at 4.74g/t Au from 238.82m, including 0.72m at 9.18g/t Au from 238.82m and 0.5m at 16.1g/t Au from 241.64m, outside the existing resource model which contains an inferred JORC MRE of 398koz at 2.59g/t Au. To the south, drilling returned 3.5m at 2.79g/t Au from 155.1m, including 0.7m at 8.78g/t Au from 155.1m, and 1.7m at 2.1g/t Au from 160m before poor ground forced termination, but further drilling from revised angles will test continuity and geometry. At Eaglehawk, a key target which sits within the broader 2km interval between Resolution and Adventure, around 800m west of their main mineralised trend, recent assays returned 0.9m at 3.84g/t Au from 145.9m, 1m at 3.98g/t Au from 258m and 2.25m at 1.34g/t Au from 90.7m – extending mineralisation below and along strike from historical workings, with reef extensions at approximately 75m and 160m vertical depth.
Wedderburn’s extensive crushing, milling, gravity and flotation facilities can be seen below:
Source: AKA
Shallow high grade intersections from a Walkers long section can be seen below, with mining beneath the existing pit to be supported by infill drilling in the lead up to the next resource update:
Source: AKA
Walkers Main and West Shears can be seen below, along with the litany of high grade intercepts throughout the prospect:
Source: AKA
The map of AKA’s project and processing portfolio can be seen below, highlighting the close proximity of St Arnaud to the Wedderburn mill as well as Irvine to the Stawell Gold Mine:
Source: AKA
This acquisition is genuinely game changing for AKA, and with Comstock’s resource and study update approaching, the company is on the verge of having a significant gold production profile. Everything is still in play at Irvine, and the latest assays add to the confidence behind the high quality exploration targets that form the basis of an extremely exciting 1Moz inventory target.
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Disclaimer: This article is for informational and marketing purposes only, and does not constitute financial advice or a recommendation to invest. All opinions expressed are our own. We may receive fees or other forms of compensation in connection with the publication of this content, and may own shares in any of the mentioned companies. Please do your own research and seek professional advice before making any investment decisions.