Tick Hill Tailings Project: Can AuKing Deliver Early Cash Flow Amid Uncertainties?

Background on the Tick Hill Opportunity

AuKing Mining Limited (ASX – AKN) has provided a significant update on its joint venture at the historic Tick Hill gold mine, located approximately 120 kilometres southeast of Mount Isa. The project focuses on reprocessing tailings left from previous mining operations, which historically produced over half a million ounces of gold at an exceptionally high grade of 25 grams per tonne. This initiative builds on a 2020 Pre-Feasibility Study (PFS) that demonstrated the technical viability of extracting gold from these tailings using modern fine grinding and processing techniques.

Progress on Feasibility and Test Work

The joint venture between AuKing, Orion Resources, and Tick Hill Mining Pty Ltd is advancing a feasibility study that leverages the earlier PFS findings. Crucially, trial test work has been underway for several weeks, generating valuable data on grind size optimization, energy consumption, throughput, and gold recovery rates. These results will feed directly into refining the feasibility study, helping to confirm the project's economic and operational parameters.

Independent Economic Validation

Earlier this year, AuKing commissioned an independent Preliminary Economic Assessment (PEA) to validate the 2020 PFS conclusions. The PEA reaffirmed the project's technical and financial viability, recommending progression to a final feasibility study. It also highlighted potential upside opportunities, including additional lower-grade tailings not previously accounted for and the possibility of higher gold recoveries. Furthermore, the PEA suggested exploring the re-establishment of mining operations at the Tick Hill open pit, which could offer even more attractive returns albeit with higher capital requirements.

Strategic Implications for AuKing

AuKing’s Managing Director, Paul Williams, emphasised the strategic value of the Tick Hill joint venture as a pathway to early cash flow generation. This is particularly important for establishing AuKing’s credentials within the broader Cloncurry Gold Project and funding the development of other assets in its portfolio, such as Mt Freda. By leveraging existing infrastructure and historical data, the project aims to minimise upfront capital expenditure while unlocking value from previously mined material.

Looking Ahead

While the feasibility study progresses and test work results are analysed, key operational and regulatory details remain to be finalised. These include processing arrangements, workforce establishment, and approvals timing. Nevertheless, the project’s foundation appears robust, supported by favourable gold price assumptions well below current market levels, suggesting strong potential economics if the study confirms expectations.