Aureka (ASX: AKA) Strikes $8.9m Victorian Mine-and-Mill Deal

Aureka Limited has agreed to acquire High Grade Holdings in a deal that would add an operating Victorian gold mine and processing plant to its portfolio, shifting the company from explorer and developer toward small-scale production.

High Grade owns the Fiddlers Creek underground gold and silver mine and the Wedderburn Gold Processing Mill. The acquisition remains subject to conditions including shareholder approval for key share issues.

A$8.9 Million Acquisition

Aureka will pay base consideration of A$8.9 million for 100% of High Grade, comprising A$2.5 million in cash and A$6.4 million in shares.

The vendor will receive about 53.3 million Aureka shares priced at A$0.12 each. Aureka will also reimburse about A$500,000 of qualifying rehabilitation bonds.

A further A$2 million of contingent consideration could become payable over three years if production, resource, reserve, licensing and tailings-capacity milestones are met.

Production milestones include cumulative output through Wedderburn of 900 ounces within 12 months, 2,500 ounces within 24 months and 4,000 ounces within 36 months.

Aureka said the thresholds are contractual conditions and should not be interpreted as production guidance.

Placement to Fund Transaction

Aureka has secured commitments for a two-tranche placement to raise A$5.65 million through the issue of about 47.1 million shares at A$0.12 each.

The second tranche requires shareholder approval. The company also plans to raise as much as A$1.5 million through a share purchase plan, allowing eligible shareholders to apply for up to A$30,000 of stock at the same issue price.

The placement price represents a 3.5% discount to Aureka’s five-day volume-weighted average price before the raising.

The acquisition and placement will result in substantial new equity being issued relative to Aureka’s existing 159.1 million shares. The transaction, however, requires only A$2.5 million of upfront cash consideration and does not involve external debt.

Existing Production Provides Operating Base

Production at Fiddlers Creek and Wedderburn began in July 2025.

During the 2026 financial-year ramp-up, the operation recovered 416 ounces of gold from ore grading an average 7 grams per tonne. Metallurgical recoveries averaged 86% during commissioning and reached as high as 91%.

High Grade’s unaudited accounts recorded positive monthly free cash flow from the second quarter of 2026, according to Aureka.

Those figures are historical and unaudited and should not be regarded as an indication of future production or financial performance.

The Wedderburn mill has stated processing capacity of about 42,000 tonnes a year and is capable of receiving third-party ore for toll treatment.

It currently processes material from Fiddlers Creek into concentrate sold under an existing offtake agreement. Spare capacity could also provide a processing route for Aureka’s existing projects, subject to further studies and approvals.

Drilling and Resource Work to Follow

Aureka’s existing projects contain 454,800 ounces of Inferred JORC resources grading 2.27 grams per tonne. That estimate excludes Fiddlers Creek, where the company has yet to report a JORC-compliant resource.

Under the transaction, Aureka must complete at least 1,800 metres of drilling across the acquired tenements. It plans to use that work to support preparation of a mineral resource estimate for Fiddlers Creek following completion.

The acquisition remains conditional on confirmatory due diligence, shareholder approvals and the absence of a material adverse change.

Aureka is targeting a shareholder meeting in October 2026, with completion expected as soon as practicable afterward.