Old Highway Acquisition Adds 206koz Resource, Targets 35koz Annual Gold Output

Strategic Acquisition Near Plutonic

Catalyst Metals Limited (ASX: CYL) has taken a significant step in expanding its Western Australian gold portfolio by signing binding documentation to acquire the Old Highway Gold Project from Sandfire Resources Limited for A$32.5 million. Situated just 40 kilometres southwest of Catalyst’s flagship Plutonic processing plant, Old Highway offers a near-term development opportunity that leverages existing infrastructure to keep capital costs low.

The project boasts a mineral resource estimate of approximately 206,000 ounces at an average grade of 3.0 grams per tonne, including a higher-grade underground component of 140,000 ounces at 4.6 grams per tonne. This resource base underpins Catalyst’s initial four-year mine plan, which targets steady-state production of 35,000 ounces per annum at an all-in sustaining cost (AISC) of around A$1,558 per ounce.

Optimised Development Plan and Financial Metrics

Catalyst’s development strategy for Old Highway involves a combination of a small open pit and underground mining, with ore processed through the underutilised Plutonic mill. The initial open pit is expected to generate early cash flows over eight months, helping to offset underground development costs. Financial modelling indicates a pre-tax net present value (NPV5) of A$280 million at a gold price of A$5,000 per ounce, with a rapid payback period of seven months once underground production commences.

Importantly, the project’s proximity to Plutonic allows Catalyst to capitalise on existing infrastructure such as the processing plant and accommodation facilities, significantly reducing upfront capital expenditure. Additionally, Catalyst is negotiating access to the sealed DeGrussa aerodrome, located 35 kilometres from Plutonic, which could save approximately A$15 million in runway sealing costs and improve logistical efficiencies.

Exploration Upside and Regional Potential

Beyond the defined resource, Catalyst sees substantial exploration potential within the Old Highway tenements and adjacent areas. Historical drilling by Sandfire identified several promising prospects, including Maficanti, Cow Hole Bore, and Shed Well East, with high-grade intercepts that warrant further investigation. Catalyst has applied for exploration leases covering over 300 square kilometres surrounding Old Highway, aiming to extend mine life and increase resource scale through systematic drilling programs.

This acquisition marks Catalyst’s first expansion beyond the Plutonic Belt, signaling a strategic shift to broaden its asset base in Western Australia. The company plans to develop multiple satellite projects feeding the central processing plant, targeting a mine life exceeding five years across its portfolio.

Funding and Corporate Outlook

The acquisition will be funded through existing cash reserves and proceeds from the recent Henty sale, with shareholder approval secured for the latter. Catalyst is also in discussions with commercial banks to establish a flexible, covenant-light corporate facility to bolster balance sheet strength and liquidity.

Managing Director James Champion de Crespigny emphasized the strategic fit of Old Highway within Catalyst’s growth plans, highlighting the opportunity to efficiently fill the Plutonic mill with new ore sources and unlock value through low capital intensity projects with manageable operating risks.