95% recovery, A$542,000 cash and 0.8 quarters of funding

Mulgabbie testwork clears another technical hurdle

OzAurum Resources Ltd (ASX:OZM) has produced the kind of metallurgical result its proposed heap leach development needs, but the September quarter report also makes clear that the project is not yet funded through to production. Column testing on paleochannel material from Mulgabbie North delivered 95% gold recovery, while deeper saprolite and transition ore returned 82% recovery at a -12mm crush size.

“Mulgabbie North Gold Project Relief Shear Gold Mineralisation Corridor.”

The paleochannel column, MNODH 022, carried a head grade of 2.58 g/t Au and recovered more than 60% of its gold within 15 days, more than 80% within 35 days and more than 90% within 65 days. Cyanide consumption was reported at 0.26 kg/t. A separate column from MNODH 020 returned 82% recovery from material grading 1.35 g/t Au, with testwork indicating laboratory recovery could rise to 88% at an -8mm crush size.

The results extend the company’s earlier 95% Mulgabbie recovery result, which had already strengthened the case for a lower-capital processing route. They are nevertheless not the same as a production guarantee: OzAurum says the MNODH 022 results remain preliminary and indicative under the laboratory conditions described, while Mulgabbie North has no defined Ore Reserve.

Water and approvals advance Stage 1

Operationally, OzAurum completed two production water bores within 1.5 kilometres of the planned heap leach facility. The bores are intended to underpin Stage 1 water requirements, with further pump-flow testing planned to assess their contribution to Stage 2.

Five key approvals are now in place, including the water abstraction approval, a Works Approval for crushing and heap leach processing of up to 150,000 tonnes a year, mining-related environmental approvals and a Dangerous Goods Licence. A Poisons Permit has been lodged with the WA Department of Health.

Rain and road conditions slow the construction timetable

Progress on the ground was less tidy. Mulgabbie North experienced its wettest September on record, including a rainfall event of more than 100mm. Civil works were delayed, while the refurbished heap leach plant remained in Kalgoorlie awaiting transport to site because the Pinjin Tropicana road was considered unsuitable for heavy transport.

Topsoil stripping has been completed across the waste dump, heap leach pad and pond areas. The next civil step is to strip clay for reuse as the pad underliner, with around 13,000 bank cubic metres of excavated material planned for use in pad construction. That reuse supports the project’s stated low-capex design, although the report does not provide a revised schedule for plant mobilisation or Stage 1 commissioning.

Cash falls to A$542,000 as funding discussions begin

The most immediate shareholder issue sits in the cash-flow tables. OzAurum spent A$376,000 on exploration, A$120,000 on development and A$801,000 on property, plant and equipment during the quarter. Total cash outflows were A$1.492 million, reducing cash and cash equivalents from A$2.034 million to A$542,000.

That balance represents an estimated 0.8 quarters of funding based on the company’s reported relevant outgoings. OzAurum said it expects to maintain its current level of net operating cash flow and is in discussions with several parties about raising additional funds. No terms, size or structure for a capital raising were disclosed. The funding pressure therefore sits alongside the project’s technical progress rather than being resolved by it; the company’s earlier Mulgabbie construction move had also highlighted the project’s dependence on further funding.

Patricia sale could provide non-dilutive support

OzAurum is also considering an all-cash divestment of its Patricia Gold Project, with a retained royalty. The asset is described as potentially non-core, and a completed sale could provide non-dilutive funding while preserving exposure to future success. For now, it remains an option under consideration rather than an announced transaction.

“OzAurum Resources Ltd (ASX: OZM) is a Western Australian explorer with advanced gold projects located 130 km northeast of Kalgoorlie and projects in Minas Gerais, Brazil,…”

Heysen’s Find and the company’s Brazilian niobium and rare earths projects remain active exploration interests, but Mulgabbie North is the asset carrying the clearest near-term development narrative. The next investment test is unusually concrete: whether OzAurum can convert encouraging laboratory recovery into a funded, permitted and physically mobilised heap leach operation before its cash position becomes the binding constraint.