Debt Refinancing and Regulatory Hurdles Loom Over Manuka’s Production Restart Plans

Funding the Cobar Basin Restart

Manuka Resources Limited (ASX, MKR) is moving decisively to restart precious metals production in Australia’s Cobar Basin with an $8 million fully underwritten entitlement offer. The capital raise, open until 31 July 2025, aims to support the company’s Cobar Basin Production Plan, targeting a restart of operations at its Wonawinta silver and Mt Boppy gold mines by late 2025 or early 2026, subject to refinancing of senior secured debt.

This funding initiative reflects growing shareholder confidence in Manuka’s strategy to leverage its fully permitted assets and existing processing infrastructure to generate free cash flow and self-fund further development.

Reserve Updates Signal Production Potential

Recent reserve updates underscore the value of Manuka’s Cobar Basin portfolio. The Wonawinta silver mine, once Australia’s largest primary silver producer, now boasts a probable ore reserve of 6.2 million tonnes grading 56.4 grams per tonne silver, containing 11.2 million ounces of silver. This is a significant upgrade from prior resource estimates and supports a 10-year mine plan with an increased net present value (NPV) of A$153 million.

Meanwhile, the Mt Boppy gold mine has a maiden open pit probable reserve of 290,000 tonnes at 4.2 grams per tonne gold, equating to approximately 39,000 ounces. This reserve will supplement feedstock for the Wonawinta processing plant, enhancing operational flexibility and economics.

Taranaki VTM Project, A Critical Minerals Powerhouse

Beyond Australia, Manuka’s wholly owned New Zealand subsidiary, Trans-Tasman Resources Limited (TTR), continues to advance the Taranaki vanadiferous titanomagnetite (VTM) iron sands project. The updated pre-feasibility study (PFS) and economic impact assessment (EIA) released earlier this year reveal a robust project with a post-tax NPV10 of US$1.26 billion and an internal rate of return (IRR) of 39%, based on a 20-year mine life and initial capital investment of US$602 million.

The project is poised to become one of New Zealand’s top 12 exporters, generating NZ$854 million in annual export revenue and contributing significantly to the government’s goal of doubling mineral export earnings by 2035. The fast-track approvals application lodged in April 2025 has been accepted as complete, with an expert panel now reviewing the submission and setting decision timeframes.

Operational Readiness and Exploration

Manuka’s Wonawinta processing plant remains in a state of care and maintenance but is primed for a rapid restart following planned upgrades to its deslime circuit to enhance silver recovery. Metallurgical test work has confirmed improvements that could double silver feed grades, boosting overall project economics.

Exploration efforts continue with prospectivity analyses underway at both Wonawinta and Mt Boppy, aiming to identify new drill targets that could extend mine life and resource base. These initiatives demonstrate Manuka’s commitment to growth through both production and exploration.

Financial Position and Outlook

At quarter-end, Manuka reported total borrowings of A$40.38 million and a cash balance just under A$1 million. The company’s fully underwritten entitlement offer is expected to strengthen its balance sheet and fund near-term activities. Executive Chairman Dennis Karp highlighted the strategic value of Manuka’s diversified asset base and the political stability of its jurisdictions as key contributors to the company’s long-term value proposition.

As Manuka navigates debt refinancing and regulatory approvals, the coming months will be critical in translating its promising resource base and project economics into operational cash flow and shareholder returns.