OzAurum reports $3.18 million loss and $2.67 million operating cash outflow

Mulgabbie North crosses into early construction

OzAurum Resources Limited (ASX:OZM) has taken its Mulgabbie North gold project beyond study and permitting into early construction, but the transition comes with a familiar junior-miner constraint: the company still needs more capital to keep going. Civil works have begun at the James Stage 1 open pit and heap leach site, while the refurbished agglomeration plant was nearing completion at 30 June.

The company secured environmental approval and permission to commence Stage 1 open-pit mining under Western Australia’s Mining Operator Notification process. Its Dangerous Goods Licence application has been lodged, while a Poisons Permit from the Department of Health remains part of the approval pathway. Stage 1 is planned as a two-cell metallurgical trial designed to limit upfront capital and establish operating capability before any larger-scale expansion.

The development case is supported by drilling and laboratory testwork rather than production history. A 435-hole, 15,646-metre RC programme across the Paleochannel produced shallow high-grade intersections that OzAurum says will feed mine planning and Stage 2 feasibility work. At James, one diamond hole returned 16 metres at 3.41 grams per tonne gold from 19 metres, including a one-metre interval at 29.34 grams per tonne.

Heap leach results are encouraging, but remain laboratory results

Column testing on oxide and upper saprolite ore achieved more than 90% gold recovery at a 2.51 grams per tonne head grade. A separate lower saprolite and transition-ore test delivered 82% recovery at a 1.35 grams per tonne head grade, with the company saying finer crushing could potentially lift laboratory recovery to about 88%.

Those figures are material to the proposed low-capital processing route, but they are not operating results. The Paleochannel column test was still underway at year-end, with preliminary recovery above 60% after 21 days and above 75% after 39 days. The competent person specifically cautioned that the Paleochannel results remain preliminary and are not an absolute measure of recovery under future operating conditions.

Losses and funding needs remain the central risk

OzAurum reported a net loss of $3.18 million for the year, wider than the $2.28 million loss recorded in FY2025. Operating cash outflow rose to $2.67 million, while $1.24 million was spent on property, plant and equipment, reflecting the acquisition and refurbishment of plant for Mulgabbie North.

The company ended June with $2.03 million in cash after raising $4.0968 million through a placement of 56.9 million shares to Forrestania Resources at 7.2 cents a share. That financing strengthened the balance sheet, but the annual report says continued operations depend on additional debt, equity or asset-sale funding. HLB Mann Judd highlighted the resulting material uncertainty related to going concern without modifying its audit opinion.

There is also a gap between the project’s exploration story and its development status. Mulgabbie North carries a JORC mineral resource of 260,000 ounces, comprising measured, indicated and inferred material, but the company has declared no ore reserves. The resource was first estimated in FY2023 and had not been reviewed by the end of the reporting period, leaving updated mine economics, reserve conversion and construction funding as the key tests ahead.