Manuka’s Financing and Mt Boppy Feasibility: Key Risks to Cobar Basin Restart Timeline
Manuka Resources has boosted the net present value of its Cobar Basin silver and gold project to A$153 million, driven by higher commodity prices, while advancing financing talks and exploring a Mt Boppy open pit cut-back to enhance production.
- NPV of Cobar Basin Production Plan increased to A$153 million
- Multiple term sheets received for refinancing and Wonawinta plant restart
- Mt Boppy open pit cut-back feasibility study underway
- Capital expenditure for Wonawinta plant restart estimated at A$18.9 million
- Production targeted to commence in January 2026
Project Valuation Boosted by Commodity Prices
Manuka Resources Limited (ASX – MKR) has updated its Cobar Basin silver and gold production strategy, revising the net present value (NPV) of the project upwards to A$153 million. This increase reflects the company's decision to model the project using higher spot prices for silver (A$56/oz) and gold (A$5,125/oz), compared to previous assumptions of A$50/oz and A$5,000/oz respectively. The revised commodity price assumptions have significantly improved the project's financial metrics, with the internal rate of return (IRR) rising to 173% from 109% and average annual EBITDA increasing to A$29 million.
Financing Progress and Plant Restart Plans
Manuka is actively engaged in discussions with multiple financiers to secure funding for refinancing existing debt and restarting the Wonawinta Silver Mine processing plant, which has a capacity of 1 million tonnes per annum. The company has completed independent technical and legal due diligence, providing prospective financiers with comprehensive reports. Term sheets have been received from several parties, and Manuka aims to finalize binding financing agreements early in the third quarter of 2025. The capital expenditure required to recommission the Wonawinta plant is estimated at A$18.9 million, with production expected to commence in January 2026.
Mt Boppy Open Pit Cut-Back Under Evaluation
In parallel with financing efforts, Manuka is assessing the feasibility of a cut-back of the Mt Boppy open pit, located approximately 50 kilometers east of Cobar. The Mt Boppy Gold Mine hosts a mineral resource of 0.4 million tonnes at 4.23 grams per tonne gold, containing approximately 53,500 ounces of gold. The company is conducting re-optimisation and reassessment studies to determine the potential to recover this resource, which could add significant value to the overall Cobar Basin production plan. Results of this study are anticipated in the upcoming quarter.
Operational and Environmental Considerations
The Cobar Basin production plan encompasses mining and processing 10.7 million tonnes of ore containing 19.2 million ounces of silver plus gold credits, underpinned by 61% reserves. Manuka plans to initially mine on a dry hire basis before transitioning to an owner-operator model. The company has also detailed capital and operating cost breakdowns, including investments in plant upgrades, tailings dam lifts, and camp facilities. Environmental compliance audits confirm that the site is maintained under care and maintenance with low risk of environmental harm, and all necessary approvals remain current. Further environmental planning is ongoing, particularly regarding tailings dam lifts and waste dump designs.
Strategic Value and Next Steps
Operating a processing facility within the Cobar Basin positions Manuka to unlock strategic value by potentially treating ores from nearby stranded assets. The company has also noted a modest but meaningful gold credit from processing Wonawinta silver ore stockpiles, which could positively impact cash flows. Manuka is targeting financial close on the refinancing facility and a final investment decision in the third quarter of 2025, aiming for steady-state production by early 2026. Investors and market watchers will be keenly awaiting updates on financing progress and the Mt Boppy feasibility study.
Bottom Line?
Manuka’s financing and Mt Boppy feasibility will be pivotal in transforming the Cobar Basin strategy into production reality.
Questions in the middle?
- Will Manuka secure binding financing terms in Q3 2025 to meet its production timeline?
- What are the detailed outcomes and economic impact of the Mt Boppy open pit cut-back study?
- How sensitive is the project’s valuation to future fluctuations in silver and gold prices?