Red Hill’s Exploration Success Raises Stakes Amid Iron Ore Ramp-Up
Red Hill Minerals reports a robust December quarter with $2.7 million in royalty revenue, a special dividend payout, and promising drilling results across multiple gold and base metal projects.
- Royalty revenue of $2.7 million from Onslow Iron Project
- Special fully franked dividend of $0.30 per share paid in December 2024
- Completion of 28 RC drill holes at West Pilbara targets with significant gold and base metal intercepts
- Advancement of Curnamona earn-in JV with airborne MT survey and soil sampling underway
- Cash balance of $64 million after dividend payment
Strong Financial Performance and Dividend
Red Hill Minerals Limited (ASX: RHI) has reported a solid December 2024 quarter, highlighted by royalty revenue of $2.7 million from its stake in the Onslow Iron Project. This revenue stream underpins the company’s ability to pay a special fully franked dividend of $0.30 per share, distributed in mid-December, reflecting confidence in ongoing cash flow generation. Despite this payout, Red Hill maintains a healthy cash balance of $64 million, positioning it well for continued exploration and development activities.
Exploration Advances in West Pilbara
The company completed an extensive reverse circulation (RC) drilling program comprising 28 holes totaling 5,538 metres across multiple targets within its West Pilbara Gold and Base Metals Project. Noteworthy intercepts include high-grade gold assays at the Barkley target, such as 2 metres at 4.3 grams per tonne (g/t) gold and 2 metres at 4.0 g/t gold, alongside significant base metal results like 6 metres at 2.0% zinc at Elwood. These results confirm the presence of multiple mineralised zones and support the potential for resource expansion.
Curnamona Joint Venture Exploration Progress
Red Hill’s earn-in joint venture with Peel Mining Limited in the Curnamona region continues to advance with a 1,875 line kilometre airborne magnetotelluric (MT) survey completed, aimed at mapping subsurface structures and guiding drill targeting. Complementary soil sampling programs are underway to validate previous geochemical anomalies, with assay results expected shortly. The region’s historical data compilation underscores its prospectivity for a range of metals including copper, gold, zinc, and silver.
Onslow Iron Project Royalty Upside
The Onslow Iron Project is ramping up production, with shipments reaching over 3 million dry metric tonnes in the quarter. Red Hill’s 0.75% FOB royalty on iron ore production generated $2.7 million in revenue, with the project expected to hit its nameplate capacity of 35 million tonnes per annum by mid-2025. This royalty arrangement also covers potential expansions into adjacent tenements, offering a growing and sustainable income stream.
Outlook and Strategic Positioning
Red Hill Minerals is strategically leveraging its diversified portfolio across gold, base metals, and iron ore royalties and exploration assets. The company’s strong cash position and ongoing exploration successes provide a solid foundation for advancing its projects and delivering shareholder value. Upcoming drilling programs, particularly follow-ups at Barkley and Elwood, alongside continued evaluation of the Curnamona JV, will be critical to watch as they could unlock further resource potential.
Bottom Line?
With robust royalty income and promising exploration results, Red Hill Minerals is well poised for growth as it advances multiple projects into 2025.
Questions in the middle?
- Will follow-up drilling at Barkley and Elwood confirm and expand the recent high-grade intercepts?
- How will the airborne MT survey data influence drill targeting and exploration strategy in the Curnamona JV?
- What impact will the Onslow Iron Project reaching full capacity have on Red Hill’s royalty revenue trajectory?
