Star Minerals has satisfied critical conditions for mining at its Tumblegum South Gold Project, including securing a toll milling agreement and completing grade control drilling, setting the stage for production in early 2026.
- Right to Mine Agreement conditions fully met
- Grade control drilling completed at Tumblegum South
- Toll gold milling agreement signed with Catalyst Metals
- Mining approval and contracts secured
- Mining expected to commence in Q1 2026 pending vegetation permit
Progress Towards Production
Star Minerals Limited (ASX: SMS) has announced significant progress at its Tumblegum South Gold Project in Western Australia, moving decisively towards mining commencement. The company has satisfied all conditions precedent under its Right to Mine Agreement with MEGA Resources and Bain Global Resources, a key milestone that clears the way for operational activities to begin.
Central to this advancement is the recently signed toll gold milling agreement with Catalyst Metals, which ensures that ore extracted from Tumblegum South can be processed efficiently. This agreement was a critical condition for the Right to Mine contract and now provides Star Minerals with both mining approval and a milling pathway, effectively de-risking the initial production phase.
Drilling and Permitting Update
Grade control drilling at the project site has been completed under the supervision of MEGA Resources, with results expected to be released shortly. These results will inform the final mining plans and help optimise extraction strategies. Meanwhile, the company is awaiting the Native Vegetation Clearing Permit, a regulatory requirement that remains the last hurdle before mining can officially commence.
Managing Director Ashley Jones expressed confidence in the project’s timeline, stating that, barring any delays in permit issuance, mining is on track to start in the first quarter of 2026. This timeline aligns with Star Minerals’ broader strategy to capitalise on elevated gold prices, which have risen well above the assumptions used in their updated scoping study.
Robust Economics and Production Targets
The updated production target for Tumblegum South anticipates mining between 167,000 and 255,000 tonnes of ore, yielding approximately 11,800 to 15,900 ounces of gold. At current gold prices ranging from A$3,000 to A$3,800 per ounce, the project is forecast to generate an undiscounted cash surplus between A$9.4 million and A$19.6 million after working capital costs, excluding pre-mining capital expenditures.
These figures suggest a resilient economic profile for the project, with sensitivity analyses indicating robustness across a broad spectrum of gold price scenarios. This financial outlook positions Star Minerals well to deliver free cash flow early in the mine’s life, supporting further development and shareholder value.
Looking Ahead
With mining approval secured, contracts in place, and drilling completed, Star Minerals is poised to transition from development to production. The company’s ability to navigate regulatory requirements and operational logistics will be critical in the coming months. Investors will be watching closely for the release of drilling results and the timely receipt of the Native Vegetation Clearing Permit, which together will confirm the project’s readiness to deliver on its promising potential.
Bottom Line?
Star Minerals is on the cusp of transforming Tumblegum South from a promising asset into a producing gold mine, with early 2026 set as the pivotal moment.
Questions in the middle?
- What will the grade control drilling results reveal about ore quality and mining plans?
- Will the Native Vegetation Clearing Permit be granted on schedule to avoid delays?
- How might fluctuations in gold prices impact the project’s cash flow and expansion potential?