Star Minerals has received mining approval for its Tumblegum South Gold Project and commenced grade control drilling, setting the stage for production in early 2026 amid rising gold prices.
- Mining approval granted for Tumblegum South Gold Project
- Grade control drilling underway to refine mining schedule
- Right to Mine agreement signed with MEGA Resources and Bain Global Resources
- $1.5 million capital raised, cash position at $1.26 million
- Production target of up to 15.9koz gold with strong cash flow potential
Mining Approval and Project Progress
Star Minerals Limited has marked a significant milestone with the receipt of mining approval from the Western Australian Department of Mines, Petroleum and Exploration for its Tumblegum South Gold Project. This approval clears a major regulatory hurdle, allowing the company to move closer to commencing mining operations, targeted for the first quarter of 2026. The project, located 40 kilometres south of Meekatharra, benefits from a robust updated scoping study that forecasts strong free cash flow generation at gold prices between A$3,000 and A$3,800 per ounce.
Drilling and Resource Expansion Potential
Grade control drilling is actively underway, with over 600 metres completed out of an anticipated 4,000 metres. This drilling is critical to defining the mining production schedule and ensuring efficient extraction. Notably, recent exploration drilling has identified a potential repeat mineralised structure west of the existing resource, suggesting the possibility of expanding the resource base. Star Minerals plans further drilling to evaluate this promising extension, which could enhance the project's long-term value.
Strategic Partnerships and Funding
The company has solidified its operational and financial footing through a Right to Mine Agreement with MEGA Resources and Bain Global Resources. This arrangement includes a 50 – 50 profit share after cost recovery and involves MEGA Resources providing mining, extraction, and haulage services. Bain Global Resources, holding nearly 10% of Star Minerals, supports up to $20 million in working capital. Additionally, Star Minerals raised $1.5 million via a share placement, bolstering its cash reserves to $1.26 million as of the quarter's end.
Regulatory and Operational Outlook
While mining approval is secured, the company awaits the final Native Vegetation Clearing Permit, necessary for clearing up to 45 hectares of native vegetation to facilitate mine development. Star Minerals is also actively pursuing an Ore Purchase Agreement with a processing plant to finalise milling arrangements. These steps are crucial to transitioning from planning to production. The company’s management remains optimistic, citing the rising gold price environment as an opportune backdrop for project development.
Financial and Corporate Governance Updates
Star Minerals reported exploration and evaluation expenditure of $145,000 during the quarter, focused primarily on geological modelling and resource work at Tumblegum South. The company appointed Nexia Perth Audit Services Ltd as its new auditor, replacing Elderton Audit Pty Ltd. With 222.7 million shares on issue, the company is positioned to advance its projects while maintaining prudent financial management.
Bottom Line?
With mining approval in hand and drilling progressing, Star Minerals is poised to unlock value as it navigates final permits and processing agreements.
Questions in the middle?
- When will the Native Vegetation Clearing Permit be granted to enable mining commencement?
- What are the terms and timeline for securing the Ore Purchase Agreement for processing?
- How might the potential resource extension impact the project’s production profile and economics?