Funding Uncertainty Clouds Medcalf Project’s Q4 2026 Construction Plans

Medcalf Project Update

Audalia Resources Limited (ASX, ACP) has provided important supplementary information to its January 2026 Prefeasibility Study (PFS) update for the Medcalf Project, reinforcing the project's technical and economic viability. The announcement confirms the establishment of a maiden Ore Reserve, a significant milestone that underpins the company’s production targets and development plans.

The updated PFS reflects a more conservative run-of-mine (ROM) mining rate of 1.0 million tonnes per annum, down from the 1.5 Mtpa outlined in the 2022 study. This adjustment aligns with refined mine designs, scheduling, and metallurgical recoveries based on the latest Mineral Resource Estimate from September 2025. Notably, the Ore Reserve now totals 11.77 million tonnes grading 11.0% titanium dioxide (TiO2), extending the anticipated mine life to around nine years, up from the previous estimate of six years.

Production and Scheduling Details

The production target is exclusively supported by 100% Probable Ore Reserves derived from Indicated Mineral Resources, with no inclusion of Inferred Resources, which adds a layer of confidence to the forecast. The mine schedule, developed using Minemax Scheduler software, incorporates constraints such as vertical advance rates and material movement limits to ensure operational feasibility. Importantly, the project plan includes the production of both high-titanium low-iron (HTLO) and high-titanium high-iron (HTFO) products, with the latter being a new addition compared to the 2022 study.

Construction is slated to commence in the fourth quarter of 2026, running concurrently with mining activities. However, this timeline remains contingent on securing necessary funding and regulatory approvals, as well as favourable market conditions. The company has flagged two potential funding scenarios, a lower capital expenditure (CAPEX) option requiring approximately AUD 31.1 million, and a higher CAPEX approach needing up to AUD 120.9 million. These scenarios correspond to net present values (NPVs) of AUD 141 million and AUD 227 million respectively, highlighting the project's economic potential.

Risks and Next Steps

While the PFS and Ore Reserve provide a solid foundation, Audalia cautions that the production target and project advancement depend on several factors. These include commodity price fluctuations, metallurgical performance, permitting and environmental approvals, and the successful securing of funding. The company currently has no binding funding agreements in place, underscoring the importance of upcoming financing efforts.

Environmental processes and the construction of the project access road are identified as critical path items for development. Detailed design and integration of these components will be essential to meet the planned construction schedule. Audalia’s management, led by CEO Brent Butler, remains focused on progressing these fronts while maintaining transparent communication with stakeholders.