Lefroy Exploration has launched its inaugural toll milling campaign at the Lucky Strike Gold Mine, with first gold production expected by mid-February amid strong gold prices. The company is also advancing drilling to expand the mine’s footprint.
- Inaugural toll milling campaign underway at Lucky Strike Gold Mine
- Ore haulage to FMR Greenfields Mill ongoing throughout February
- First gold production anticipated by mid-month amid elevated gold prices
- Second phase of grade control drilling targeting Stage 2 South pit in progress
- Project funded by BML Ventures under profit share agreement, reducing shareholder risk
A Milestone for Lefroy Exploration
Lefroy Exploration Limited (ASX – LEX) has reached a significant operational milestone with the commencement of toll milling at its Lucky Strike Gold Mine near Kalgoorlie, Western Australia. This marks the transition from exploration and development to production, a critical phase for any junior mining company seeking to generate cash flow and validate its resource potential.
The inaugural toll milling campaign is underway at the FMR Greenfields Mill in Coolgardie, with ore being transported 24/7 throughout February. This arrangement, secured through a profit share agreement with BML Ventures and FMR Investments, allows Lefroy to process ore without the upfront capital expenditure of building its own mill, effectively lowering financial risk for shareholders.
First Gold Expected Amid Strong Market Conditions
CEO Graeme Gribbin highlighted the significance of this development, noting that first gold production is anticipated by mid-February. This timing is fortuitous, coinciding with historically elevated spot gold prices, which could enhance project economics and shareholder returns. The Lucky Strike deposit boasts a mineral resource estimate of approximately 79,600 ounces of gold, underpinning the initial mining campaign.
The company’s strategy leverages shallow, high-grade deposits and profit share mining agreements to pursue a low-cost production pathway. This approach not only accelerates the timeline to production but also mitigates capital risk, a prudent move in the current volatile commodity environment.
Expanding the Mine Footprint
Alongside milling operations, Lefroy has commenced a second phase of grade control drilling targeting the Stage 2 South pit at Lucky Strike. This drilling focuses on the upper 50-60 metres of the deposit and aims to delineate additional ore reserves to sustain and potentially expand production. Success here could extend the mine life and increase the volume of gold extracted during this strong gold price cycle.
Beyond Lucky Strike, Lefroy’s broader Lefroy Project portfolio includes other promising deposits such as Mt Martin and Burns Central, which collectively hold over one million ounces of gold resources. The company’s zero-cost development model through profit share agreements positions it well to scale production and generate cash flow from multiple assets.
Looking Ahead
With mining underway since December 2025 and milling now in progress, Lefroy is poised to deliver on its promise of early 2026 gold production. The company’s ability to maintain momentum in drilling and resource expansion will be critical to sustaining growth and shareholder value. Investors will be watching closely for production updates and assay results from ongoing drilling campaigns.
Bottom Line?
Lefroy’s move into production at Lucky Strike signals a pivotal step, but the real test will be sustaining output and expanding resources amid fluctuating gold prices.
Questions in the middle?
- How will actual gold production volumes compare to initial expectations?
- What impact will the Stage 2 South pit drilling results have on resource estimates?
- Can Lefroy replicate this low-risk profit share model across its other deposits?