Brightstar Projects $339,000oz Gold Production with 73% IRR in New DFS

Overview of the Feasibility Study

Brightstar Resources Limited (ASX – BTR) has announced the completion of a Definitive Feasibility Study (DFS) for its 100%-owned Menzies and Laverton Gold Projects located in Western Australia's prolific Goldfields region. The study outlines a staged development approach that leverages low capital expenditure to unlock substantial value, forecasting a pre-tax free cash flow of A$461 million at a spot gold price of A$5,000 per ounce.

The DFS envisions a combined gold production of approximately 339,000 ounces over a five-year mine life, supported by maiden open pit reserves and ongoing underground operations. The projects include open pit mining at Lady Shenton (Menzies), Lord Byron, and Cork Tree Well (Laverton), complemented by underground mining at Yunndaga and Alpha deposits.

Operational and Processing Strategy

Brightstar plans to commence mining at Menzies in early 2026, with ore from the Lady Shenton system to be processed at the nearby Paddington Gold Plant under an executed Memorandum of Understanding (MoU). This arrangement offers a low-capital, low-risk processing pathway for the Menzies ore.

For Laverton, the company will construct a new 1 million tonnes per annum (Mtpa) carbon-in-leach (CIL) processing plant on the existing Beta Plant site. This facility will process ore from Lord Byron, Cork Tree Well, and underground sources including Yunndaga and Alpha. The new plant design incorporates modern equipment and infrastructure, aiming for efficient gold recovery and operational flexibility.

Financial Highlights and Funding

The DFS presents compelling financial metrics, including a net present value (NPV8) of A$316 million and an internal rate of return (IRR) of 73% at the spot gold price scenario. Even under a conservative gold price of A$4,500 per ounce, the project maintains an NPV8 of A$203 million and an IRR of 48%. The payback period for pre-production capital is estimated at approximately one year post-commissioning.

Brightstar estimates peak funding requirements of around A$120 million to cover pre-production and working capital needs. The company has received positive indications from multiple domestic and offshore commercial banks, as well as non-bank lenders, for debt financing support covering up to 70% of capital requirements. Additionally, a non-binding term sheet from a precious metals specialist investment company proposes a funding package combining gold doré offtake and equity financing with minimal dilution.

Project Development and Next Steps

The staged development plan prioritizes the Lady Shenton open pit at Menzies, followed by expansion into Laverton deposits. Preparatory activities for mining and processing are underway, including contractor selection, camp construction, and senior leadership appointments. The Board has approved progression towards a final investment decision (FID), expected in the coming months pending funding finalization and receipt of operational permits.

Brightstar also identifies significant upside potential through resource growth and mine life extensions, driven by ongoing exploration and potential owner-operator mining models that could reduce costs and increase economic tonnage. The company’s aspiration is to evolve into a mid-tier gold producer with annual production exceeding 200,000 ounces by 2029, supported by organic growth and strategic acquisitions.

Risks and Considerations

While the DFS demonstrates robust economics, several risks remain. These include gold price volatility, operational cost fluctuations, labour supply challenges, and the need to secure final regulatory approvals and project financing on acceptable terms. The inclusion of Inferred Mineral Resources in the production schedule introduces geological uncertainty, although the project’s financial viability does not depend on these lower-confidence resources.

Brightstar’s management team brings extensive experience in mine development and financing, and the company’s clean capital structure and Tier-1 jurisdiction location are expected to be attractive to financiers and partners.