Can Lunnon Metals Sustain Momentum After Rapid Lady Herial Approval?

A Decisive Step Forward

Lunnon Metals Limited (ASX, LM8) has taken a significant stride by approving the Final Investment Decision (FID) for its Lady Herial gold project. This move follows the release of a robust feasibility study and the confirmation that the Ore Purchase Agreement (OPA) with major shareholder St Ives Gold Mining Co. Pty Ltd is now unconditional. The green light from the board signals imminent commencement of mining activities, marking a milestone in the company’s rapid development timeline.

Strong Economics Underpin the Project

The feasibility study, announced on 16 January 2026, highlights a short-life, high-grade, low strip ratio open pit mine expected to operate within 8 to 10 months. Operating free cash flow projections are compelling, with pre-tax figures ranging from $40.4 million at a gold price of $6,250 per ounce to nearly $48 million at $7,000 per ounce. Given the current spot gold price hovering around $6,900 per ounce, the project’s economics appear particularly attractive.

Partnerships and Execution Strategy

Lunnon Metals has identified Hampton Civil and Mining as the preferred contractor for mining operations, alongside Goldfields Technical Services (GTS) of Kalgoorlie for statutory roles, operational blast design, and mine site management. Contracts with these partners are in the final stages of preparation and expected to be executed shortly, enabling mining to commence without delay. The company expresses confidence in delivering the mine plan safely and efficiently, leveraging strong collaboration with its contractors and stakeholders.

Leadership Perspective

Non-Executive Chair Liam Twigger described the FID approval as a proud moment, praising the management team’s agility and determination. He emphasised the rapid progression from discovery to production in under two years as a testament to the company’s operational excellence and a solid foundation for future shareholder value creation. Twigger also acknowledged the support from partners, contractors, and regulatory bodies in reaching this stage.

Looking Ahead

With the Lady Herial project poised to generate cash flow shortly, Lunnon Metals is positioning itself to capitalise on the current high Australian dollar gold prices. The project’s short duration and high-grade ore body offer a compelling opportunity to deliver returns swiftly, while also setting a precedent for the company’s broader ambitions in the region.