Regulatory and Processing Deals Key to Unlocking Lunnon Metals’ Lady Herial Potential

Maiden Gold Resource and Scoping Study

Lunnon Metals Limited (ASX – LM8) has marked a significant milestone with the announcement of its first-ever gold Mineral Resource estimate at the Lady Herial deposit within its Foster-Baker project in Western Australia. The maiden resource totals approximately 573,000 tonnes at 1.6 grams per tonne gold, equating to 29,000 ounces. This achievement follows intensive drilling campaigns that confirmed thick, high-grade mineralisation close to surface, supporting the deposit’s economic potential.

Complementing this, the company released a robust Scoping Study that outlines a short-life, high-grade open pit opportunity with strong financial metrics. The study forecasts operating pre-tax free cash flow of around A$44.7 million at a gold price of A$5,000 per ounce, with all-in costs estimated at approximately A$2,100 per ounce. This positions Lady Herial as a potentially lucrative near-term development project.

Strategic Partnership and Regulatory Progress

In a strategic move, Lunnon Metals has commenced a 90-day exclusivity period to negotiate an ore sale and purchase agreement with Gold Fields Ltd, the company’s major shareholder and operator of the nearby Lefroy gold plant. This agreement, if finalised, would enable processing of Lady Herial ore at Gold Fields’ facilities, accelerating the path to production.

Meanwhile, the company is advancing regulatory approvals, including submission of the Mining Proposal, Mine Closure Plan, and Native Vegetation Clearing Permit, aiming for approval within the September quarter. These steps are critical to unlocking the deposit’s value and moving towards potential mining operations.

Expanding Gold Discovery Pipeline

Lunnon Metals is not resting on Lady Herial’s success alone. The June quarter saw encouraging exploration results from multiple prospects within the Foster Gold Belt, including Hustler, Cooee, Koombana, Guiding Star, and Halloween. These targets exhibit similar geological characteristics to Lady Herial, such as shallow, high-grade gold mineralisation and favourable host rocks, suggesting the potential for further discoveries.

Notably, the Cooee prospect revealed historic workings and recent drill intercepts with significant gold grades, prompting its elevation to a high-priority target for follow-up drilling in FY2026. The company’s aggressive exploration approach aims to replicate Lady Herial’s rapid resource definition and permitting success across these prospects.

Nickel Assets and Financial Position

On the nickel front, Lunnon Metals updated its Scoping Study for the Baker and Foster nickel sulphide assets, defining production targets with attractive grades and operating costs. Baker is projected to generate a pre-tax free cash flow of approximately A$70 million, while Foster is currently near break-even at prevailing nickel prices. However, commercial arrangements for processing remain uncertain, with the nearby Kambalda Concentrator on care and maintenance until at least 2027.

Financially, the company maintains a strong cash balance of A$15.4 million as of 30 June 2025, supporting ongoing exploration, permitting, and technical programs. Exploration expenditure increased in the quarter, reflecting the intensified focus on gold discovery and resource definition.

Outlook and Next Steps

Looking ahead, Lunnon Metals plans to complete final drilling at Lady Herial to refine grade control and mine design, while continuing negotiations with Gold Fields Ltd to secure processing agreements. Concurrently, exploration programs will advance at multiple gold prospects, leveraging government co-funded drilling grants and the company’s growing geological understanding.

With a portfolio anchored by a maiden gold resource, promising scoping study economics, and a pipeline of compelling exploration targets, Lunnon Metals is positioning itself for a transformative period in 2025 and beyond.