Lunnon Metals has announced its inaugural Mineral Resource Estimate for the Lady Herial gold deposit, marking a rapid progression from discovery to resource in just 15 months. The shallow, high-grade deposit is poised for fast-tracked development amid strong gold prices.
- Initial Mineral Resource of 0.57 million tonnes at 1.6 g/t Au totaling 29,000 ounces
- Measured Resource includes 16,600 ounces at 1.9 g/t Au
- Deposit located on granted mining leases with nearby infrastructure
- Whittle open pit optimisation confirms robust economic extraction prospects
- High gold recoveries averaging 95% from metallurgical test work
Rapid Resource Development
Lunnon Metals Limited (ASX: LM8) has delivered a significant milestone with the first-ever Mineral Resource Estimate (MRE) for its Lady Herial gold deposit, discovered within its Kambalda Gold & Nickel Project (KGNP). Remarkably, this achievement comes just 15 months after initial drilling commenced in February 2024, underscoring the deposit’s promising characteristics and the company’s focused execution.
The initial MRE quantifies 0.57 million tonnes at an average grade of 1.6 grams per tonne gold, equating to approximately 29,000 ounces of contained gold. Notably, over half of this resource, 16,600 ounces, is classified in the Measured category at a higher grade of 1.9 g/t Au, providing a solid foundation for confidence in the deposit’s economic potential.
Strategic Location and Infrastructure Advantage
Lady Herial’s location on granted mining leases within the prolific St Ives/Kambalda gold belt offers a strategic advantage. The deposit is shallow and outcropping, with thick, high-grade mineralisation, and benefits from proximity to established haul roads and the Lefroy Gold Plant operated by Gold Fields Limited, Lunnon Metals’ major shareholder. This infrastructure proximity is critical for the company’s plan to fast-track permitting and commercialisation, aiming for a short mine life of 4 to 6 months.
Economic Viability Confirmed by Whittle Optimisation
To underpin the resource’s economic prospects, Lunnon Metals conducted a Whittle open pit optimisation exercise, an industry-standard approach to assess reasonable prospects for eventual economic extraction (RPEEE). The optimisation captured 96% of the Measured Resource within a potential pit shell, affirming the deposit’s robust economic viability under current market conditions, including the high Australian dollar gold price environment.
Complementing this, metallurgical test work performed on RC drill samples demonstrated excellent gold recoveries averaging 95%, with low reagent consumption. These results align with the typical “St Ives” style free-milling gold deposits, further supporting the feasibility of processing at nearby facilities.
Pathway to Production and Commercial Negotiations
Lunnon Metals is actively advancing permitting activities, including submission of a Mining Proposal and Mine Closure Plan to Western Australian authorities. The company plans a final infill drilling campaign to refine grade control and upgrade resource categories before making a definitive mining decision.
Commercially, Lunnon Metals is in exclusive negotiations with Gold Fields to secure terms for processing Lady Herial ore at the Lefroy plant. This arrangement, subject to shareholder approval due to related party considerations, would enable efficient ore treatment leveraging existing infrastructure, minimizing capital expenditure.
Broader Exploration and Future Prospects
While Lady Herial commands immediate focus, Lunnon Metals continues to explore other targets within the Foster Gold Belt, including Hustler, Koombana, and Guiding Star, with encouraging early results. The company’s strong cash position and strategic location within a world-class gold camp position it well for sustained exploration and potential future discoveries.
Managing Director Edmund Ainscough highlighted the low-risk nature of the gold refocus strategy and the unexpected rapid success at Lady Herial, emphasizing the potential financial benefits and the company’s readiness to progress towards production.
Bottom Line?
Lady Herial’s swift advancement from discovery to resource signals Lunnon Metals’ intent to capitalise on high gold prices, but execution hinges on final permitting and commercial agreements.
Questions in the middle?
- Will Lunnon Metals secure a processing agreement with Gold Fields within the 90-day exclusivity period?
- Can further drilling extend the resource beyond the current 29,000 ounces and upgrade Inferred resources?
- How will the short mine life impact the project’s economics and Lunnon Metals’ broader gold strategy?