Loyal Metals Targets High-Grade Copper Gold Revival at Highway Reward

Strategic Acquisition in a Rising Copper Market

Loyal Metals Limited (ASX, LLM) has taken a decisive step to broaden its critical minerals portfolio by securing a binding option to acquire the Highway Reward Copper Gold Mine in Queensland, Australia. This asset is renowned as one of the world’s highest-grade copper mines, with historical production figures boasting 3.65 million tonnes at 5.7% copper and 260,000 tonnes at 4.5 grams per tonne gold. The acquisition aligns with Loyal’s 2025 Strategic Plan, which aims to capitalize on the surging demand for copper, a metal pivotal to the global energy transition.

The Highway Reward mine has been dormant since 2005, with no exploration conducted on its granted mining leases for two decades. This hiatus is particularly notable given the dramatic price appreciation of copper (approximately 680%) and gold (around 1,256%) since the 1997 feasibility study. Loyal’s entry into this space leverages these market dynamics alongside advancements in exploration technologies.

Unlocking Untapped Potential with Modern Techniques

The mine’s geological setting within the Mount Windsor Volcanic Belt is highly prospective, hosting polymetallic massive sulphide deposits in rhyolitic, dacitic, and volcaniclastic rocks. Previous mining operations focused primarily on copper within chalcopyrite, excluding gold associated with sulphides from the mine plan. Loyal intends to revisit these overlooked resources, applying modern geophysical surveys such as drone-based MobileMTd and LiDAR, combined with AI-driven data analysis to digitize and model extensive historical exploration and mining data.

Exploration potential extends beyond the mined zones, with previous operations reaching depths of only 220 metres for open pit and 390 metres underground. The granted mining leases cover a 3-kilometre strike of favourable geological trends, with significant opportunities to discover new high-grade copper-gold pipes both along strike and at depth. The company’s approach reflects a sophisticated understanding of the deposit’s structural complexity and the possibility of epigenetic replacement mineralisation, which may have been missed by earlier explorers.

Deal Structure and Financial Position

The acquisition involves issuing 9 million fully paid ordinary shares to the current owners, subject to a six-month escrow, alongside 5 million performance shares convertible upon achieving key milestones such as delineating JORC-compliant mineral resources and recommencing commercial mining within five years. Additionally, a 2% net smelter return royalty will be granted to the vendors. Loyal has secured $4.4 million in funding to support initial exploration and due diligence activities.

Importantly, Loyal must address financial provisioning obligations estimated at over $8 million to comply with Queensland’s Mineral and Energy Resource (Financial Provisioning) Act. The company is actively exploring funding solutions to meet these regulatory requirements during the option period.

Favourable Market and Geopolitical Backdrop

The timing of this acquisition is underscored by robust global demand for copper, driven by initiatives to modernize energy grids and expand battery energy storage systems, particularly in the United States and China. Notably, copper imports from Australia are exempt from recent US tariffs, positioning Loyal favourably in the supply chain. The proximity of Highway Reward to existing processing infrastructure and active mining hubs like Charters Towers and Townsville further enhances its strategic value.

Managing Director Adam Ritchie emphasised the opportunity to unlock value from a ‘forgotten mine’ using modern technology, highlighting the potential for exceptional returns for shareholders. The company’s methodical approach to exploration and resource delineation aims to build a robust copper-gold resource base that supports future development and production.