Vault Minerals delivered 78,578 ounces of gold in the March quarter at an AISC of A$3,006/oz, generating a remarkable $229 million in underlying free cash flow. The company completed the first stage of its King of the Hills plant upgrade and declared a maiden dividend, reinforcing its position as a high-yielding gold producer.
- March quarter gold production of 78,578 ounces at AISC of A$3,006/oz
- Underlying free cash flow soared 1,808% quarter-on-quarter to $229 million
- Stage 1 of King of the Hills plant upgrade completed, Stage 2 on track
- Maiden interim dividend of 7 cents per share declared and paid
- Owner-operator transition at Deflector boosts underground performance
Free Cash Flow Accelerates as Vault Unhedges
Vault Minerals (ASX:VAU) has turned the corner with its first largely unhedged quarter, reporting an underlying free cash flow of $229 million for the March 2026 quarter; a staggering 1,808% increase quarter-on-quarter. This surge follows the company’s strategic closure of its H2 FY26 gold hedges in November 2025, opening full exposure to rising gold prices that averaged A$6,987 per ounce during the quarter.
The strong cash flow underpinned Vault’s maiden interim dividend of 7 cents per share, equating to $73 million, which was paid in April alongside an ongoing share buyback program that deployed $39.6 million this quarter. These moves position Vault among the highest yielding mid-cap gold producers, reflecting a disciplined approach to returning capital to shareholders.
Operational Highlights: KoTH Upgrade and Deflector Owner-Operator Transition
Gold production remained robust at 78,578 ounces for the quarter, with an all-in sustaining cost (AISC) of A$3,006 per ounce. Year-to-date production stands at 247,203 ounces, tracking well within FY26 guidance of 332,000 to 360,000 ounces at an AISC range of A$2,650 to A$2,850.
Stage 1 of the King of the Hills (KoTH) processing plant upgrade was completed in March, with the new crushing circuit commissioned and delivering throughput rates exceeding expectations at up to 1,500 tonnes per hour. This upgrade marks a significant step change in processing capacity, setting the stage for Stage 2, which remains on schedule for commissioning in Q2 FY27. The second stage aims to increase throughput by approximately 50%, boosting Leonora’s gold production by an estimated 34%. This follows the earlier KoTH plant upgrade progress reported in March, where commissioning milestones were met on time and budget.
Meanwhile, the Deflector region saw a marked improvement in underground mining performance under the owner-operator model initiated in November 2025. Manning levels reached targets and the primary underground fleet was commissioned, driving production to 18,016 ounces of gold and 77 tonnes of copper for the quarter. This operational transition is expected to sustain and build production rates into Q4 FY26.
Mount Monger and Leonora: Steady Production with Exploration Upside
At Mount Monger, gold production was 17,213 ounces with an AISC of A$3,108 per ounce. The operation continues to focus on the Santa Open Pit Complex, with waste stripping above life-of-mine ratios treated as capital expenditure and excluded from AISC. Ore stockpiles increased during the quarter, providing operational flexibility.
Leonora delivered 43,349 ounces of gold at an AISC of A$2,848 per ounce. The KoTH underground mine achieved its strongest monthly production of the year in March, coinciding with manning targets being met. Ore stockpiles at Leonora expanded to approximately 15 million tonnes containing 182,000 ounces of gold, including a recent reclassification adding ~26,000 ounces to Ore Reserves. Exploration results continue to support life-of-mine extensions, aiming to maintain annual production near 235,000 ounces beyond FY28.
Sugar Zone Restart Hinges on Regulatory Approval
Preparations to resume underground operations at Sugar Zone are progressing, with key site leadership appointed and supply contracts in place. The critical outstanding regulatory hurdle is the permit for the Southern Tailings Management Facility, expected in late May 2026. Mine development is slated to begin in Q1 FY27, with waste from development activities planned to support STMF construction. Processing is targeted to restart in November 2027, with development ore providing an early feed of around 13,000 ounces.
Capital Expenditure and Balance Sheet Strength
Capital investment remained elevated at $68.5 million for the quarter, largely driven by non-recurring growth projects such as the KoTH plant upgrade and Deflector’s owner-operator transition. As these projects reach completion, Vault anticipates a moderation in capital expenditure going forward.
The company ended the quarter with a robust cash and bullion position of $728 million, excluding $38.1 million of gold in circuit and concentrate, and remains debt-free. Vault’s strong balance sheet supports ongoing growth and shareholder returns initiatives while providing a buffer against market volatility.
Bottom Line?
Vault’s unhedged exposure and operational upgrades have unlocked a new cash flow inflection point, but execution of Stage 2 KoTH and regulatory approval at Sugar Zone will be pivotal next steps.
Questions in the middle?
- Will the Stage 2 KoTH upgrade meet its Q2 FY27 commissioning target and deliver the expected production uplift?
- How will regulatory timing for the Sugar Zone tailings facility impact Vault’s restart plans and near-term production?
- Can Vault sustain its elevated free cash flow and shareholder returns amid potential gold price fluctuations?