Lefroy’s Lucky Strike: 79,600 Ounces Gold Resource, Toll Milling Secured
Lefroy Exploration has advanced its Lucky Strike Gold Deposit project through robust near-surface drilling results, a new toll milling agreement, and a $2.5 million funding facility, setting the stage for mining operations in early 2026.
- Profit-sharing mining agreement with BML Ventures progresses
- Grade control drilling reveals high-grade near-surface gold
- Toll milling agreement secured for 80,000–90,000 tonnes throughput
- $2.5 million Profit Cash Advance Facility strengthens cash position
- Mining operations expected to commence in first half of FY 2026
Profit-Sharing Partnership Drives Progress
Lefroy Exploration Limited (ASX, LEX) has made significant strides in developing its Lucky Strike Gold Deposit, located 60 kilometres southeast of Kalgoorlie. The company’s profit-sharing mining agreement with BML Ventures Pty Ltd is central to this progress, enabling Lefroy to leverage BML’s operational expertise and capital. Under the agreement, profits from mining are split evenly, with BML managing all mining activities and approvals, and funding capital and operating costs.
Encouraging Drilling Results Highlight High-Grade Potential
During the quarter, Lefroy completed a 16,500-metre grade control drilling program targeting the northern pit at Lucky Strike. The results exceeded expectations, with near-surface gold grades significantly higher than the current resource model suggested. Notable intersections included 19 metres at 4.10 grams per tonne gold, including a 7-metre section at 9.58 grams per tonne. These assays confirm a robust high-grade mining opportunity and suggest potential resource growth beyond existing boundaries.
Securing Processing Capacity with Toll Milling Agreement
Complementing the drilling success, Lefroy and BML secured a toll milling agreement with FMR Investments Pty Ltd to process Lucky Strike ore at the Greenfields Mill in Coolgardie. Scheduled for February 2026, the milling slot is expected to handle between 80,000 and 90,000 dry metric tonnes of ore. Lefroy and BML are actively pursuing additional milling partnerships to increase throughput to 250,000 tonnes for the initial mining stage, which would enhance operational scale and efficiency.
Funding Boost to Support Development and Exploration
To underpin these developments, Lefroy entered a Profit Cash Advance Facility Agreement with BML, securing $2.5 million in funding. The facility is structured with quarterly advances and an 8% annual coupon, secured solely against the Lucky Strike mining tenement. This arrangement strengthens Lefroy’s cash position without diluting shareholders and provides financial flexibility to pursue further exploration and development activities across its extensive Lefroy Project tenements in the prolific Kalgoorlie-Kambalda district.
Looking Ahead, Expanding Resources and Advancing Operations
With funding in place and processing arrangements secured, Lefroy’s immediate focus includes expanding its resource base at other deposits such as Mt Martin and Burns Gold, alongside advancing early-stage exploration across its 635 square kilometre landholding. Mining operations at Lucky Strike are anticipated to commence in the first half of FY 2026, marking a pivotal transition from exploration to production for Lefroy Exploration.
Bottom Line?
Lefroy’s strategic partnerships and funding position it well to unlock value from Lucky Strike, but execution risks remain as mining approaches.
Questions in the middle?
- Will Lefroy secure additional toll milling capacity to meet its 250,000-tonne target?
- How will final mining approvals and operational challenges impact the planned 2026 start?
- What exploration results might emerge from Lefroy’s broader tenement holdings beyond Lucky Strike?