Inferred Resources Pose Uncertainty as Manuka Targets Q2 2026 Production

Context and Compliance

Manuka Resources Limited (ASX:MKR) has issued an amended announcement updating its Pre-Feasibility Study (PFS) for the Cobar Basin, following ASX's request for enhanced disclosure and compliance with Listing Rule 5 and Guidance Note 31. The revisions clarify the composition of the production target, particularly the role and proportion of Inferred Resources, and reaffirm the reasonable basis for their inclusion in the mine plan.

This amendment also reflects the company's recent US$30 million financing facility, which supports pre-production capital works at the Wonawinta Silver Mine and Mt Boppy Gold Mine. Investors are advised to consider this amended release alongside prior announcements for a comprehensive view.

Robust Financial Outlook

The updated 10-year mine plan projects a net present value (NPV8) of A$805 million and an internal rate of return (IRR) exceeding 1,000%, based on conservative metal price assumptions of US$95 per ounce for silver and US$4,800 per ounce for gold. The plan forecasts production of approximately 13.2 million ounces of silver and 35,000 ounces of gold, sourced from existing stockpiles and open pits at Wonawinta and Mt Boppy.

Operating costs are estimated at a competitive A$34.4 per ounce of silver (including gold credits), with an average annual EBITDA of A$127 million. Capital expenditure requirements are modest, at A$26.6 million, primarily allocated to processing plant upgrades such as a new desliming circuit designed to improve throughput and recovery.

Production Target and Resource Classification

The production target of 10.9 million tonnes is underpinned by 6.9 million tonnes of Probable Ore Reserves and 4.0 million tonnes of Mineral Resources, comprising 8% Measured, 54% Indicated, and 38% Inferred categories. The company acknowledges the inherent uncertainty associated with Inferred Resources, which predominantly feature in years 6 to 10 of the mine plan. However, Manuka expresses confidence in upgrading a significant portion of these to higher confidence categories through ongoing grade control drilling and exploration.

Financial modelling excluding all Inferred Resources still demonstrates strong project viability, with an IRR of 523% and an NPV8 of A$561.6 million, underscoring the robustness of the plan.

Operational and Infrastructure Plans

Manuka plans to restart the existing 1Mtpa Wonawinta processing plant in the first half of 2026, with mining activities commencing in Q3 2026. The processing plant upgrade focuses on removing deleterious fine clays through a desliming circuit, addressing previous operational challenges and enhancing silver recovery rates.

Mining operations will initially target stockpiles and existing open pits at Wonawinta, progressing through a sequence of pits including Manuka, Belah, Bimble, Pothole, and Boundary. Concurrently, Mt Boppy gold ore stockpiles and open pit material will be hauled approximately 150km to Wonawinta for processing, leveraging existing infrastructure and reducing capital intensity.

Environmental and Regulatory Standing

Both Wonawinta and Mt Boppy operate under existing mining leases with current development consents and environmental licences. The company has conducted environmental compliance audits confirming satisfactory management under care and maintenance. Planned expansions and waste dump designs will be regularised within existing approvals, minimizing regulatory risk.

Manuka also highlights ongoing efforts to manage potentially acid-forming waste rock at Mt Boppy, with appropriate containment and rehabilitation strategies in place.

Outlook and Strategic Opportunities

Manuka’s Executive Chairman, Dennis Karp, emphasised the company’s unique position to capitalise on elevated precious metals prices with a low-capex restart and strong cash flow potential. The strategic location of the Wonawinta processing plant within the Cobar Basin offers optionality to process ores from nearby deposits, potentially unlocking further value.

Exploration drilling at Mt Boppy and Pipeline Ridge continues, with assay results expected shortly. Positive outcomes could expand the resource base and extend mine life. Additionally, the company is exploring opportunities to optimise mining fleet costs and re-optimise pit designs in light of higher current metal prices, which may further enhance project economics.