GoldArc Secures Fully Funded $20M Development Deal to Unlock Leonora South Gold Production

Binding Agreement Removes Capital Hurdle for Leonora South

GoldArc Resources (ASX:GA8) has taken a decisive step towards production at its Leonora South Gold Project by signing a binding Term Sheet with Mineral Mining Services Pty Ltd (MMS). This deal converts a previously non-binding letter of intent into a legally enforceable framework that sees MMS fully fund up to A$20 million of initial development costs for the Orion and Sapphire deposits. Crucially, GoldArc shareholders face no upfront capital calls or dilution, a significant relief for a junior miner navigating the costly transition from resource to production.

The arrangement establishes a special purpose vehicle (SPV) jointly owned 50:50 by GoldArc and MMS, through which all project proceeds will be channelled and distributed. MMS recoups its investment solely from project revenues via a priority waterfall, after which profits are split evenly. This structure safeguards GoldArc’s balance sheet while aligning both parties’ interests in the project’s success.

Strategic Incentives and Development Oversight

To further cement the partnership’s alignment, GoldArc will issue 7.5 million listed options (GA8OC) to MMS, exercisable at $0.04 and expiring in mid-2028. This option grant ties MMS’s upside directly to GoldArc’s share price performance throughout the development phase, incentivising robust project execution.

MMS brings extensive expertise in the Goldfields region, managing the entire development lifecycle from resource definition and permitting to mine planning, drilling, and operations. The turnkey scope relieves GoldArc of operational burdens and financial risk, effectively outsourcing the pathway to commercial production.

Resource Base and Drilling Programmes Underpinning Progress

The Orion and Sapphire deposits together hold an inferred JORC resource of approximately 48,000 ounces at 2.15 g/t gold, located within the prolific Kookynie Goldfields near Leonora. GoldArc is currently executing a 6,000m reverse circulation drilling program aimed at upgrading resource classification from Inferred to Indicated, a prerequisite for detailed mine planning.

This drilling effort complements broader exploration and development activities across GoldArc’s portfolio, including the nearby Eclipse prospect and the Leonora North project with BML Ventures. The company’s aggressive drilling and partner-funded development strategy has been highlighted in recent coverage of its partner-funded drilling and production plans, which underscores GoldArc’s push towards mining by late 2026 backed by a 200,000oz resource base.

Conditions and Risks Remain Ahead

The binding Term Sheet is subject to several conditions precedent, including MMS completing due diligence, execution of formal development agreements such as the Right to Mine Agreement and Mine Development Plan, and obtaining necessary regulatory and third-party consents. The parties have up to 24 months to satisfy these conditions, with a Longstop Date after which either can terminate if unmet.

While the agreement significantly de-risks the capital challenge, the absence of guarantees that formal documents will be executed on time or at all introduces execution risk. MMS also retains rights to suspend development under certain conditions, including force majeure or if the $20 million funding threshold is met.

GoldArc’s Managing Director, Paul Stephen, framed the deal as a milestone that removes a key barrier for juniors seeking to commercialise resources, highlighting the benefit of having a fully funded development partner managing simultaneous project hubs.