Lefroy and BML Forge 50/50 Profit-Share to Accelerate Lucky Strike Gold Mining
Lefroy Exploration has partnered with BML Ventures in a profit-sharing agreement to fast-track mining at the Lucky Strike Gold Project, backed by promising drilling results that validate and expand the resource base.
- 50/50 profit-sharing mining agreement signed between Lefroy Exploration and BML Ventures
- Lucky Strike Gold Project hosts 79,600 ounces at 1.95 g/t Au in a 1.27 Mt mineral resource
- BML appointed as mine operator, funding all mining costs and managing approvals
- 3,000m RC drilling validates resource model and reveals significant new gold intersections
- Mining operations expected to commence in the second half of 2025
Partnership to Unlock Lucky Strike Value
Lefroy Exploration Limited (ASX: LEX) has taken a decisive step towards advancing its Lucky Strike Gold Project with the execution of a binding profit-sharing mining agreement with BML Ventures Pty Ltd. This 50/50 partnership grants BML exclusive rights to operate open pit mining at Lucky Strike, located 60km southeast of Kalgoorlie, Western Australia, where a mineral resource estimate (MRE) stands at 1.27 million tonnes at 1.95 grams per tonne gold, equating to approximately 79,600 ounces.
Under the agreement, BML assumes full responsibility for mining operations, including securing approvals, funding capital and operating costs, and managing day-to-day activities. Lefroy retains a 50% share of net profits, with BML recouping its costs from initial gold sales. This structure enables Lefroy to accelerate project development without upfront capital expenditure, a strategic move to unlock value efficiently.
Drilling Confirms Resource and Upside Potential
During the March quarter, Lefroy completed a 3,000-metre reverse circulation (RC) infill drilling program designed to validate and refine the existing geological and resource models. The program confirmed the current resource framework and identified significant gold intersections beyond the known resource boundaries, including notable hits such as 17 metres at 1.32 g/t Au and 6 metres at 3.07 g/t Au. These results suggest potential for resource growth, which could enhance the project's economics and longevity.
The drilling success not only strengthens confidence in the resource but also supports BML's forthcoming mine planning and pit optimisation efforts, expected to conclude early in the June quarter. This groundwork is critical as the partners prepare for mining commencement targeted for the second half of 2025.
Permitting and Infrastructure Progress
Environmental baseline studies, including flora and fauna surveys, were conducted during the quarter, with reports anticipated soon. These are prerequisites for submitting a Clearing Permit Application, a key regulatory milestone. Concurrently, stakeholder engagement regarding haul road corridors is advancing, with haulage contractor selection expected following toll milling agreements.
BML is actively negotiating toll milling arrangements with third-party processing plants to secure cost-effective and timely ore processing capacity. The availability and scheduling of toll milling slots remain a critical factor for the project's operational timeline.
Financial Position and Outlook
As of 31 March 2025, Lefroy holds $2.4 million in cash with no debt, maintaining a solid financial footing to support ongoing exploration and corporate activities. Operating expenditures for the quarter were modest at $296,000, with $339,000 invested in exploration and evaluation. The profit-sharing model with BML alleviates the need for Lefroy to fund mining capital, preserving cash for other strategic initiatives.
Looking ahead, the partnership's success hinges on BML meeting agreed profitability thresholds and securing milling capacity. If these conditions are satisfied, mining could commence within 18 months of the agreement signing, marking a significant milestone for Lefroy's transition from exploration to production.
Bottom Line?
Lefroy’s strategic alliance with BML could transform Lucky Strike from resource to revenue, but operational execution and milling access remain pivotal.
Questions in the middle?
- Will BML secure toll milling capacity on favourable terms to meet the planned mining schedule?
- How might further drilling outside current resource boundaries impact the overall project scale and economics?
- What are the potential regulatory or environmental hurdles that could delay mining commencement?
