Meeka Metals Faces Execution Risks as Murchison Project Targets Mid-2025 First Gold
Meeka Metals has made substantial strides in developing its Murchison Gold Project, backed by a fully funded expansion and a robust feasibility study projecting $1 billion in pre-tax free cash flow over 10 years. With first gold targeted for mid-2025, infrastructure and mining operations are advancing ahead of schedule.
- Expanded feasibility study shows 31% ore reserve growth and 40% production increase
- First gold production expected mid-2025, with open pit mining starting March 2025
- Institutional placement raised $35 million, eliminating need for debt or hedging
- Significant infrastructure upgrades including new ball mill, tanks, and haul road
- Strong metallurgical test results confirm high gold recoveries up to 99.8%
Robust Funding and Infrastructure Momentum
Meeka Metals Limited has reported a highly active December 2024 quarter, marked by significant progress in the development of its flagship Murchison Gold Project in Western Australia. The company successfully completed a $35 million institutional placement, fully funding the project’s development and removing the need for previously planned debt financing. With $55 million in cash and zero debt at quarter-end, Meeka is well-positioned to execute its growth strategy.
Infrastructure upgrades are advancing rapidly. The larger 750kW ball mill has been transported from Victoria and is ready for installation, while MACA Interquip Mintrex has mobilised to site to commence upgrades and restart works on the carbon-in-leach (CIL) gold processing plant. Construction of new tanks and cyanide storage facilities is underway, alongside civil works for expanded administration complexes at both Andy Well and Turnberry, reflecting preparation for both open pit and underground mining operations.
Mining Contract Awarded and Production Timeline
The open pit mining contract was awarded to Iron Mine Contracting Pty Ltd, with equipment mobilisation scheduled for February 2025 and mining operations set to begin in March. First ore is expected to be mined by April 2025, with ore hauling to the processing plant commencing immediately thereafter. Complementing this, grade control drilling at Turnberry South and St Anne’s open pits is nearing completion, delivering strong assay results that underpin a positive production outlook.
Feasibility Study Highlights and Financial Outlook
The expanded Murchison Feasibility Study, released in December 2024, reveals a 31% increase in Ore Reserves to 400,000 ounces at 3.1 g/t gold and a 40% boost in production, averaging 65,000 ounces annually over the first seven years, peaking at 76,000 ounces in year five. Financially, the project forecasts an undiscounted pre-tax free cash flow of $1 billion over an initial 10-year plan, with a net present value (NPV) at 8% discount rate of $616 million and an internal rate of return (IRR) of 180% at a gold price of $4,100 per ounce.
Operating costs are projected at $1,982 per ounce (All-in Sustaining Cost) and $2,247 per ounce (All-in Cost), reflecting current industry conditions. The study also highlights the sensitivity of cash flow to gold price fluctuations, estimating an additional $52 million in free cash flow for every $100 per ounce increase in gold price.
Metallurgical Confidence and Underground Potential
Metallurgical test work on Turnberry underground samples confirmed exceptional gold recoveries averaging 95.5%, with peak recoveries up to 99.8% using conventional gravity and CIL processing methods. These results validate the processing approach and support plans for a second underground mine at Turnberry, enhancing the project’s long-term value proposition.
Looking Ahead
Meeka Metals is on track to commission the processing plant by June 2025, with open pit mining ramping up through the first half of the year. Infrastructure developments, including the 20km haul road and accommodation village, are progressing ahead of schedule. The company’s Managing Director, Tim Davidson, emphasised the team’s commitment to delivering first gold by mid-2025, underscoring the strong operational momentum and financial health underpinning the project.
Bottom Line?
With robust funding and infrastructure in place, Meeka Metals is poised to transform the Murchison Gold Project into Western Australia’s next high-grade gold producer.
Questions in the middle?
- How will Meeka Metals manage operational risks to meet its mid-2025 first gold target?
- What impact could fluctuating gold prices have on the project’s financial projections and development pace?
- How quickly can underground mining at Turnberry be developed following the open pit phase?