Lefroy Exploration Limited (ASX: LEX) reports encouraging grade control drilling results and successful initial gold production from its Lucky Strike Gold Mine in Western Australia, supporting resource growth and ongoing mining operations.
- Significant shallow gold intersections from grade control drilling at Lucky Strike
- First toll milling campaign processed 31,796 dry tonnes with 1,392 ounces recovered at 96.2% recovery
- Ore stockpiles increasing to support future milling parcels
- Additional $0.5 million cash advance received from BML Ventures under profit cash advance facility
- Drilling results highlight exploration upside beyond current resource boundaries
Grade Control Drilling Validates and Extends Lucky Strike Resource
Lefroy Exploration Limited (ASX:LEX) has released an update on its Lucky Strike Gold Mine near Kalgoorlie, Western Australia, reporting significant assay results from recent grade control drilling targeting the proposed South Pit. The drilling broadly confirmed the existing mineral resource model, with multiple notable gold intersections including 16 metres at 3.39 g/t Au from 127 metres and 11 metres at 2.92 g/t Au from 41 metres. Importantly, several high-grade intersections were recorded outside the current resource wireframe, such as 3 metres at 7.18 g/t Au from 26 metres, underscoring the deposit's exploration potential beyond known boundaries.
The drilling program, conducted by profit share partner BML Ventures Pty Ltd (BML), comprised 191 reverse circulation holes over 9,845 metres on a 10m by 10m grid. Sampling and assay protocols followed industry best practice, with results supporting the geological interpretation of the deposit and grade control practices. While true widths of mineralisation were not reported due to structural complexities, drilling was designed to intersect mineralised zones perpendicularly.
First Toll Milling Campaign Recovers 1,392 Ounces of Gold
In February 2026, Lefroy commenced its inaugural toll milling campaign at the FMR Greenfields Mill in Coolgardie, processing 31,796 dry tonnes of ore from Lucky Strike. The campaign achieved a reconciled head grade of 1.42 g/t Au and a gold recovery rate of 96.2%, resulting in 1,392 ounces of recovered gold. The mine claim to mill and resource to mine claim grades reconciled positively, providing validation of the resource estimate and mining controls.
Ore throughput during the campaign was below initial forecasts due to operational challenges including elevated groundwater flows, wet pit conditions affecting truck loading, and weather-related interruptions at the mill. Despite these factors, mining activities continue to progress with waste cutbacks underway to access higher-grade ore panels exceeding 2 g/t Au in the coming months.
Growing Ore Stockpiles and Funding Support Future Production
Surface stockpiles at Lucky Strike have increased by 13,069 ore tonnes, accumulated from the North Pit, to support upcoming toll milling parcels. BML Ventures continues to fund upfront mining and operating costs, with revenue from the first milling parcel applied to cost recovery. Future milling parcels are expected to generate surplus cash, which will be shared equally between BML and Lefroy under their profit share agreement.
Lefroy has also strengthened its cash position by receiving a third $0.5 million cash advance instalment from BML under the July 2025 Profit Cash Advance Facility Agreement, bringing total drawdowns to $2.5 million for FY26. This funding arrangement supports ongoing mining and exploration activities, including resource expansion at Lucky Strike and other deposits such as Mt Martin and Burns Central.
Positioned for Growth Amid Ongoing Exploration
The positive drilling and production results follow Lefroy’s recent milestone of shipping its first gold doré bars from Lucky Strike, marking the transition from development to production. The company is advancing further drilling to delineate additional mineralisation corridors and expand the mine footprint, with a revised mine schedule and budget completed by BML. Negotiations are underway to secure toll milling slots for an additional 250,000 ore tonnes beyond the initial campaign.
With a mineral resource estimate of 1.27 million tonnes at 1.95 g/t Au for 79,600 ounces at Lucky Strike, and over one million ounces in total resources across its portfolio, Lefroy is pursuing a low-cost gold production strategy leveraging profit share mining agreements. The company’s approach aims to generate cash flow while advancing exploration and development across its broader Lefroy Project.
These developments build on Lefroy’s earlier operational updates, including the commencement of mining and toll milling activities earlier this year, as detailed in their first gold production and shipment update and toll milling campaign launch announcements.
Bottom Line?
Lefroy’s recent drilling and production results reinforce the robustness of the Lucky Strike resource and operational model, though ongoing operational challenges and the inherent uncertainties of exploration warrant cautious monitoring.
Questions in the middle?
- How will future drilling results impact the resource classification and mine plan at Lucky Strike?
- What are the timelines and terms for securing additional toll milling capacity beyond the current agreements?
- How might operational challenges such as groundwater inflows and weather disruptions affect production forecasts?