Genesis Minerals has secured crucial rail agreements that clear the path for developing the Tower Hill open pit gold mine and expanding the Leonora mill, targeting first ore in FY28.
- Rail agreements signed with PTA, Arc Infrastructure, and Aurizon
- Leonora rail line shortening enables mill expansion and Tower Hill development
- Tower Hill holds 1 million ounce gold reserve with potential underground extension
- Project on track for FY27 development and FY28 first ore production
- Rail project costs estimated at A$80 million, funded from cash flow and reserves
Strategic Rail Agreements Unlock Tower Hill Potential
Genesis Minerals has taken a significant step forward in its development of the Tower Hill gold project by signing binding rail agreements with key stakeholders including the Public Transport Authority of Western Australia (PTA), Arc Infrastructure, and Aurizon. These agreements facilitate the shortening of the rail line at Leonora, a move that is critical to enabling the expansion of the Leonora mill and the full-scale development of the Tower Hill open pit mine.
The Tower Hill deposit boasts a substantial reserve of 1 million ounces of gold at an average grade of 2 grams per tonne, with an operating strip ratio of 9 – 1. Despite being drilled to only around 450 meters deep, the deposit remains open at depth, and an underground transition study is currently underway to explore further potential.
Infrastructure and Community Benefits
The rail agreements include relocating the existing Leonora rail terminal to a new site southeast of the town. This relocation is expected to reduce train and heavy vehicle traffic through Leonora, eliminate level crossings, and improve overall safety and community amenity. Genesis will fund the construction of a private siding and terminal, while Arc Infrastructure will build a multi-user spur line.
Genesis Managing Director Raleigh Finlayson highlighted the collaborative effort behind these agreements, thanking government bodies and rail operators for their support. He emphasized that the rail line shortening not only benefits Genesis and the Tower Hill project but also unlocks opportunities for a lower capital cost expansion of the Leonora mill, potentially accelerating the timeline for both projects.
Financial and Operational Outlook
The total cash and non-cash consideration related to the rail shortening is expected to be approximately A$80 million, consistent with previous estimates. This includes design, construction, compensation payments, and land acquisitions. Funding will come from Genesis’ operating cash flows and existing cash reserves, with around A$27 million anticipated to be spent in the 2026 fiscal year.
Operational readiness activities are progressing, including infrastructure planning, road design, environmental management, and early mine site establishment. The project remains on track for mine development in FY27 and first ore production in FY28, with Stage 2 mining expected to commence about two years after Stage 1.
Looking Ahead
Genesis plans to provide further details on Tower Hill in its updated long-term plan scheduled for release in the June half of 2026. Meanwhile, the company continues to work through conditions precedent required to commence construction, including final design approvals and regulatory designations.
Bottom Line?
With rail agreements secured, Genesis is poised to unlock Tower Hill’s full potential, but key approvals and construction milestones remain ahead.
Questions in the middle?
- When will all conditions precedent be fully satisfied to commence rail terminal construction?
- How might underground mining potential at Tower Hill impact long-term production plans?
- What are the risks to the A$80 million rail project cost and timeline estimates?