Lunnon Metals has completed a detailed Feasibility Study for its Lady Herial gold deposit, outlining a robust, short-life open pit mine with strong pre-tax cash flows exceeding $40 million. The project is fully permitted and poised for imminent development.
- 268,250 tonnes Proved Ore Reserve at 1.89g/t Au containing ~16,270oz gold
- Pre-tax operating free cash flow forecast between $40.4M and $47.9M depending on gold price
- All-in cost of $2,354 per ounce produced
- Mining and processing under Ore Purchase Agreement with major shareholder SIGM
- Mining expected to commence shortly with 8-10 months production timeline
Feasibility Study Validates Lady Herial’s Economic Potential
Lunnon Metals Limited (ASX – LM8) has announced the completion of a comprehensive Feasibility Study for its Lady Herial gold deposit, part of the Kambalda Gold & Nickel Project in Western Australia. The study confirms a robust, high-grade, shallow open pit operation with a Proved Ore Reserve of 268,250 tonnes at 1.89 grams per tonne gold, containing approximately 16,270 ounces of gold.
Operating free cash flow before tax is forecast at $40.4 million assuming a gold price of A$6,250 per ounce, rising to $47.9 million at A$7,000 per ounce, close to the current spot price of around A$6,900. The all-in cost to produce an ounce of gold is estimated at a competitive $2,354, underscoring the project’s strong economics despite its relatively short mine life.
Strategic Location and Established Infrastructure
Lady Herial is located on granted mining leases with extensive historical disturbance and infrastructure in place, including proximity to the St Ives Lefroy gold processing plant operated by St Ives Gold Mining Co. Pty Ltd (SIGM), a major shareholder in Lunnon Metals. Under a binding Ore Purchase Agreement, all mined ore above 0.5 g/t gold will be processed at Lefroy, with Lunnon Metals receiving 70% of the free cash flow after cost recovery.
The deposit’s shallow depth and thick mineralisation allow for a simple, low strip ratio open pit (5.9 – 1), with mining and processing expected to be completed within 8 to 10 months. Contract negotiations with mining and technical service providers are well advanced, positioning the company to commence mining imminently following the Board’s Final Investment Decision.
Rigorous Technical and Environmental Approvals
The Feasibility Study incorporates detailed mine design, bench-by-bench scheduling, and costings based on tendered contract rates and agreed haulage and processing costs. Extensive drilling campaigns have upgraded the Mineral Resource to 100% Measured category, supporting a Proved Ore Reserve classification. Metallurgical test work confirms a high gold recovery rate of 91%, consistent with processing at the Lefroy plant.
Environmental and heritage assessments have been completed with no significant impediments identified. The project has received all necessary regulatory approvals, including Mining Proposal, Mine Closure Plan, and Native Vegetation Clearing Permit. A Land Access Agreement with the Ngadju Native Title Aboriginal Corporation ensures local Indigenous engagement and royalty arrangements.
Financial Strength and Future Outlook
As of December 2025, Lunnon Metals holds approximately $9.8 million in cash and is considering a modest working capital facility to manage any potential delays. The company’s management team has a strong track record of capital raising, and the project’s short duration and stable regulatory environment reduce execution risk.
While Lady Herial represents a significant near-term value driver, Lunnon Metals views this as the beginning of its journey in the prolific Kambalda/St Ives gold camp. The company highlights potential extensions along strike and nearby prospects that could extend the mine life or lead to new discoveries, leveraging its unique position as the only ASX-listed company with mining leases in this renowned district.
Bottom Line?
With a strong feasibility foundation and imminent mining start, Lady Herial sets the stage for Lunnon Metals’ next growth phase amid gold price volatility.
Questions in the middle?
- Will Lunnon Metals secure the working capital facility without diluting shareholders?
- How quickly can mining contracts be finalized and mobilization commence?
- What is the potential scale and timeline for extensions along the Lady Herial strike?