Polymetals Starts High-Grade Ore Mining and Launches Dual Revenue Streams
Polymetals Resources has hit a production milestone with the start of high-grade Upper North Lode mining and first Direct Shipping Ore sales, driving a surge to $27.8 million revenue and positioning the Endeavor Mine for sustained growth.
- Commencement of high-grade Upper North Lode mining and first DSO sales
- Quarterly production: 547,302 oz silver, 1,064 oz gold, 1,917 t zinc, 1,148 t lead
- Revenue jumps to $27.8 million with dual concentrate and DSO streams
- Exploration advances near-mine drilling and regional geophysics
- Cash, receivables, and net payable inventory total $60.9 million at quarter end
Milestone Quarter with High-Grade Ore Unlocking New Revenue
Polymetals Resources Ltd (ASX:POL) has marked a pivotal quarter at its Endeavor Mine in Cobar, NSW, with the commencement of mining from the high-grade Upper North Lode (UNL) and the inaugural sales of Direct Shipping Ore (DSO). This development has created a second revenue stream alongside traditional concentrate production, significantly boosting cash flow potential. The company produced 547,302 ounces of silver, 1,064 ounces of gold, 1,917 tonnes of zinc, and 1,148 tonnes of lead during the March 2026 quarter, driving revenue up to $27.8 million from just $4.6 million in the prior quarter.
Mining 18,384 tonnes of UNL ore has revealed silver grades stronger than modelled, attributed to native silver in the oxides, enhancing payable metal value. This follows the company's earlier update on higher silver grades and direct shipping trial that first flagged the ore’s premium quality and the strategic shift to DSO sales.
Operational Ramp-Up and Dual Revenue Streams
While the Main Lode mining focused on developing access to higher-grade stopes, milling was paused for maintenance in March but is set to resume alongside DSO shipments. The dual revenue streams from concentrate and DSO are expected to enhance financial stability and operational flexibility. Notably, gold contained in the UNL ore is monetised through DSO sales, a value not captured in concentrate production.
Logistical challenges arose with flooding in South Australia causing transport delays for zinc concentrate shipments, but the first DSO parcel is scheduled for shipment from Adelaide in April. Polymetals has secured diesel supplies amid Middle East volatility by working closely with Inland Petroleum, mitigating operational risk.
Exploration Progress Bolsters Resource Pipeline
Exploration efforts advanced significantly, with near-mine drilling south of the Carpark Prospect and a 65-line kilometre induced polarisation (IP) geophysical survey over northern regional targets. These programs refine the geological model and aim to identify extensions to known mineralisation and new deposits within trucking distance of the processing plant.
Integration of passive seismic and gravity data has generated new drill-ready targets, such as PSX001, highlighting the potential for deeper and blind mineralisation zones adjacent to Endeavor. Underground drilling plans for the Deep Zinc Lode resource aim to upgrade resource confidence and test extensions, while the discovery of remnant mineralisation in the historic Main Lode South collapse area (“Phoenix Block”) presents further upside.
The company’s methodical approach to exploration, incorporating alteration vector geochemistry and structural interpretation, is increasing confidence in targeting and supports long-term organic growth. Planned June quarter activities include follow-up drilling and resource-to-reserve conversion efforts.
Financial Position and Capital Management
Polymetals ended the quarter with $22.9 million cash and $37.9 million in unsold net payable metal inventory, combining for $60.8 million in liquid and near-liquid assets, almost doubling the previous quarter’s $32.9 million. The company reduced borrowings by $4.3 million and maintains $9.25 million in undrawn financing facilities.
Operating costs fell to $30.4 million from $36 million the prior quarter, reflecting improved efficiencies. Exploration expenditure increased to $1.0 million, underscoring the company’s commitment to growth. With revenues now flowing from both concentrate and DSO, the company forecasts ongoing positive cash flow.
Polymetals also applied for a new exploration licence (ELA 7027) in NSW, extending its tenure and exploration footprint. The company’s registered address has moved to Stafford, Queensland, effective April 2026.
Unresolved Incident and Governance
The investigation into the tragic October 2025 incident that resulted in two employee fatalities remains ongoing, with no new material information disclosed. Polymetals has completed internal and independent investigations coordinated by senior management and legal counsel, and does not anticipate further updates in the near term.
Payments to related parties during the quarter totalled $90,000, covering executive and non-executive director fees, consistent with prior disclosures.
Bottom Line?
Polymetals is transitioning from operational challenges to a dual revenue model with high-grade ore and DSO sales, but the path to sustained profitability hinges on maintaining production momentum and exploration success.
Questions in the middle?
- Will the high-grade Upper North Lode continue to outperform grade expectations over the next 18 months?
- How quickly can the company convert near-mine exploration targets into reserves to extend mine life?
- What impact will logistical disruptions and fuel price volatility have on operational costs and margins?
