Star Minerals has inked a pivotal Right to Mine Agreement with MEGA Resources and Bain Global Resources, unlocking $20 million in funding and operational support for its Tumblegum South Gold Project, aiming for production in early 2026.
- Right to Mine Agreement signed with MEGA Resources and Bain Global Resources
- Up to A$20 million in working capital committed by MEGA Resources
- 50 – 50 profit share arrangement between Star Minerals and Bain Global Resources
- Mining operations expected to commence in Q1 2026
- Agreement contingent on Ore Purchase Agreement and regulatory approvals
Strategic Partnership Unlocks Funding and Expertise
Star Minerals Limited (ASX – SMS) has taken a significant step forward in advancing its Tumblegum South Gold Project by signing a Right to Mine Agreement with MEGA Resources and Bain Global Resources. This partnership not only secures up to A$20 million in working capital but also entrusts MEGA Resources with mining, extraction, and haulage responsibilities, setting the stage for production to begin in the first quarter of 2026.
Mitigating Dilution and Aligning Interests
One of the standout features of this deal is the financial structure that reduces dilution risk for Star Minerals’ shareholders. By leveraging MEGA Resources’ risk-bearing capital, Star Minerals avoids the need for dilutive equity raises or high-risk debt. The profit-sharing arrangement equally splits earnings between Star Minerals and Bain Global Resources, ensuring aligned incentives and shared commitment to project success.
Operational Readiness and Expertise
MEGA Resources brings to the table a proven track record with three active gold mining operations and a skilled team ready to mobilize for Tumblegum South. Their in-house experts in mining, engineering, and geology will oversee operations, while Star Minerals focuses on securing an Ore Purchase Agreement with a processing plant, a key condition precedent to the agreement’s full effect.
Regulatory Progress and Project Economics
The company has already submitted its mining approvals and native vegetation clearing permit applications to the Western Australian Department of Mines, Petroleum and Exploration, signaling regulatory progress. With gold prices currently well above those used in prior scoping studies, the project’s updated production targets suggest robust economics, forecasting production between approximately 11,800 and 15,900 ounces of gold and potential cash surpluses up to nearly A$20 million.
Looking Ahead
While the agreement marks a major milestone, the finalisation of the Ore Purchase Agreement and processing arrangements remain critical next steps. The partnership with MEGA Resources and Bain Global Resources positions Star Minerals to navigate these challenges with greater financial flexibility and operational support.
Bottom Line?
Star Minerals’ new mining partnership and funding deal set a promising course for Tumblegum South’s production launch, but key contracts and approvals remain to be secured.
Questions in the middle?
- When will the Ore Purchase Agreement be finalised and what terms will it include?
- Which processing plant will Star Minerals partner with, and how might this impact project timelines?
- How will fluctuations in gold prices affect the profitability and funding structure of the project?