Aureka Secures Toll Milling Deal to Fast-Track Comstock Production

Toll Milling Agreement Secures Processing Pathway

Aureka Limited (ASX:AKA) has inked a binding toll milling agreement with High Grade Holdings, owners of the Wedderburn Gold Processing Mill. The three-year deal, commencing from first production, is project agnostic, allowing Aureka to nominate ore from any of its projects for processing on a cost-plus margin basis. Crucially, the agreement permits Aureka to fund capital upgrades to the mill, tailoring capacity and metallurgy to its specific needs.

The Wedderburn mill currently processes ore from Core Prospecting’s Fiddlers Creek underground mine, but with ample spare capacity, the arrangement offers Aureka a ready-made processing solution without the need for immediate capital-intensive infrastructure. The deal aims to boost mill utilisation and reduce unit costs for both parties.

Comstock Project Set for Early Production

Aureka is positioning the St Arnaud Comstock Gold & Silver Project as its first production operation. Located approximately 45 kilometres from Wedderburn, Comstock benefits from proximity to the mill and existing road infrastructure capable of supporting ore haulage. The company has submitted a Prospecting Licence application for a small-scale, low-footprint mining operation focused on the Walkers Pit area.

Ongoing infill diamond drilling at Comstock targets upgrading a portion of the 56,500-ounce inferred resource to a higher confidence category. The 1,000-metre program aims to validate historical data, increase drill density, and provide samples for metallurgical testing. Historical drill results reveal high-grade gold and silver mineralisation near surface, underscoring the project's potential for a fast-to-market, low-capital start-up.

Irvine Gold Project Under Conceptual Review

While Comstock is the immediate focus, the toll milling agreement also opens the door for the Irvine Gold Project, Aureka’s flagship asset boasting a 398,000-ounce inferred resource. Situated about 135 kilometres from Wedderburn, the Irvine project remains at an exploration stage. Aureka plans to conduct a Concept Study to evaluate the economic and logistical feasibility of trucking ore to Wedderburn for processing. This study will inform long-term planning but remains preliminary.

Portfolio and Resource Growth

Aureka’s Victorian gold portfolio totals an inferred resource of 455,000 ounces, including the Irvine Project in the Stawell Corridor and the Comstock project near St Arnaud. The company continues to advance exploration and drilling activities across its tenements, including the Jubilee Gold Exploration Project and Morning Bill Gold and Base Metals Project.

Recent drilling at Comstock has confirmed significant zones of gold and silver mineralisation, with assays highlighting shallow high-grade intercepts. The company remains cautious, noting that inferred resources carry geological uncertainty and that further work is required to establish production targets or financial forecasts.

Strategic Implications and Next Steps

The toll milling agreement with Wedderburn represents a critical step in de-risking Aureka’s pathway to production, particularly for Comstock. By leveraging existing processing capacity and permitting the funding of mill upgrades, Aureka gains operational flexibility and potential cost efficiencies. The ongoing infill drilling and metallurgical studies will be pivotal in advancing Comstock towards a scoping study and potential production decision.

Meanwhile, the Concept Study on Irvine will provide early insights into the viability of processing ore at Wedderburn, a factor that could shape the development timeline of Aureka’s largest resource. Investors should monitor forthcoming drilling results, resource reclassification efforts, and any announcements related to mill upgrades or approvals under the toll milling agreement.