Tumblegum South’s Path to Production Faces Key Assay and Approval Milestones
Star Minerals has made significant strides in developing its Tumblegum South Gold Project, signing a key MOU with MEGA Resources and completing a $1.6 million capital raise to support upcoming mining activities.
- MOU signed with MEGA Resources for mine development
- ResourcesWA appointed to manage mine approval process
- Completed 2033m drilling to enhance resource confidence
- Raised $1.6 million from sophisticated and strategic investors
- Targeting mining commencement in Q1 2026 with strong cash position
Strategic Partnership and Project Development
Star Minerals Limited has taken decisive steps forward in advancing its Tumblegum South Gold Project in Western Australia. The company signed a Memorandum of Understanding (MOU) with MEGA Resources, an Australian mining company backed by Indian contractor BGR Mining & Infra Limited. This partnership aims to facilitate mine development and potentially establish a profit-sharing or joint venture arrangement, signaling a collaborative approach to unlocking the project's value.
Alongside this, Star Minerals appointed ResourcesWA to oversee the mine approval process, including critical environmental, hydrological, and waste characterisation studies. These regulatory milestones are progressing well, with several key components nearing completion, underscoring the company’s commitment to responsible and timely project advancement.
Drilling and Resource Confidence
Post-quarter, Star Minerals completed a substantial drilling program comprising 38 reverse circulation holes totaling 2033 meters. The drilling targeted potential high-grade lodes and aimed to upgrade resource confidence from Inferred to Indicated categories within the shallow zones identified in the updated scoping study. Samples are currently en route to laboratories for assay, and the results are eagerly awaited as they will inform early cash flow projections and potential resource extensions.
Financial Position and Capital Raising
To underpin these development activities, Star Minerals successfully completed a $1.6 million placement, attracting sophisticated and professional investors, including a strategic investment from MEGA Resources under Bain Global Resources. The capital raise was executed in two tranches, with shareholder approval secured for the second tranche. At the end of the quarter, the company held a cash balance of approximately $1.18 million, providing a solid financial foundation as it moves towards production.
Project Economics and Outlook
The updated scoping study for Tumblegum South projects robust economics, with potential free cash flow of up to A$19.6 million at a gold price of A$3,800 per ounce. Notably, current gold prices exceed A$5,000 per ounce, offering significant upside potential. The project contemplates an 18-month mining campaign with pre-mining capital costs estimated between A$0.7 million and A$1.5 million. Star Minerals is targeting mining commencement in the first quarter of 2026, positioning the company to capitalise on favourable market conditions.
Corporate Governance and Board Strengthening
In addition to operational progress, Star Minerals enhanced its board with the appointment of Clint Moxham as a Non-executive Director. Mr Moxham brings valuable mining, engineering, and contract negotiation expertise, complementing Managing Director Ashley Jones’s leadership. Mr Jones, who transitioned from CEO of Bryah Resources Limited, remains actively involved in guiding Star Minerals through this pivotal development phase.
Bottom Line?
With drilling results pending and regulatory approvals advancing, Star Minerals is poised for a critical growth phase as it eyes production in early 2026.
Questions in the middle?
- What will the upcoming assay results reveal about high-grade lode extensions?
- How will the partnership terms with MEGA Resources shape project economics and governance?
- Can Star Minerals maintain its financial runway through to production given current cash reserves?
