Lefroy Exploration has begun mining ore at its Lucky Strike Gold Deposit, marking its transition to gold producer with first processing set for February 2026. This milestone aligns with strong gold prices, positioning Lefroy for potential cash flow generation.
- Mining commenced at Lucky Strike Gold Deposit near Kalgoorlie
- First ore extracted 17m below surface with stockpiles building
- Toll milling agreement secured for 80,000–90,000 tonnes at Greenfields Mill
- Profit-sharing and $2.5 million cash advance facility in place with BML Ventures
- Gold production expected to start in February 2026 amid AUD 7000/oz gold prices
Mining Milestone Achieved
Lefroy Exploration Limited (ASX – LEX) has officially commenced mining operations at its Lucky Strike Gold Deposit, located near Kalgoorlie in Western Australia. The company has begun extracting ore panels from the North Pit, with the first ore intersected just 17 metres below the surface. Stockpiles of run-of-mine ore are being built throughout January, setting the stage for imminent ore haulage.
Strategic Partnerships and Processing Plans
Lefroy’s mining activities are conducted in partnership with BML Ventures under a profit-sharing agreement established in early 2025. To process the ore, Lefroy has secured a toll milling agreement with FMR Investments Pty Ltd, utilising the Greenfields Mill in Coolgardie. This arrangement allows for the processing of an initial 80,000 to 90,000 tonnes of ore, with first processing scheduled for February 2026.
Resource Base and Financial Backing
The Lucky Strike Gold Deposit boasts a Mineral Resource Estimate of approximately 1.27 million tonnes at 1.95 grams per tonne gold, equating to nearly 80,000 ounces. Lefroy has also secured a $2.5 million cash advance facility from BML Ventures to support mining activities, structured as four quarterly instalments with an 8% fixed interest rate.
Timing and Market Context
CEO Graeme Gribbin highlighted the significance of this milestone, noting that Lefroy is now the newest gold miner in the prolific Kalgoorlie district. The timing is particularly favourable given recent gold prices touching AUD 7000 per ounce, which could enhance the economic returns from the initial production phase. Lefroy’s approach focuses on low-cost production through profit-sharing agreements on shallow, high-grade deposits, aiming to generate cash flow while advancing exploration across its broader portfolio.
Looking Ahead
With mining underway and processing imminent, Lefroy is poised to deliver its first gold production in early 2026. The company’s broader Lefroy Project, including deposits like Mt Martin and Burns Central, offers further resource growth potential and opportunities for similar development strategies.
Bottom Line?
Lefroy’s entry into production at Lucky Strike marks a pivotal step, with early gold output and cash flow set to shape its near-term trajectory.
Questions in the middle?
- What will be the initial gold production volumes and recovery rates from Lucky Strike?
- How will Lefroy scale operations beyond the initial toll milling capacity?
- What impact will fluctuating gold prices have on Lefroy’s profitability and expansion plans?