Barton Gold Accelerates Tunkillia Diamond Drilling Targeting Ore Reserves by 2026

Diamond Drilling Drives Tunkillia Towards Production

Barton Gold Holdings (ASX:BGD) has kicked off a ~3,000-metre diamond drilling program at its Tunkillia Gold Project in South Australia, deploying two rigs to accelerate resource definition and project development. The initiative supports a Pre-Feasibility Study (PFS) and a Mining Lease (ML) application targeted for late 2026, marking a critical step in advancing Tunkillia from promising resource to operating mine.

The diamond drilling complements an ongoing ~30,000-metre Phase 2 reverse circulation (RC) drilling campaign designed to upgrade mineral resources from Inferred to Indicated and Measured categories under JORC (2012) standards. This follows Phase 1 drilling that delivered broad, high-grade intersections underpinning the project’s compelling economics.

Strong Economics Backed by Rising Commodity Prices

The May 2025 Optimised Scoping Study (OSS) laid out a robust development case for Tunkillia, projecting annual production of approximately 120,000 ounces of gold and 250,000 ounces of silver. The study estimated a total life-of-mine operating profit of around A$2.7 billion (unlevered, pre-tax) with a net present value (NPV7.5%) of A$1.4 billion and an internal rate of return (IRR) exceeding 73%. Remarkably, the payback period was just 0.8 years.

Barton’s Managing Director Alexander Scanlon highlighted that current gold and silver prices, roughly A$1,600/oz and A$60/oz higher respectively than the OSS assumptions, would significantly enhance project returns. “At today’s prices, Tunkillia is modelled to generate over A$1 billion in operating profit in the first year alone,” Scanlon said, emphasizing the financial leverage offered by a higher-grade starter pit capable of repaying development costs twice over within 12 months.

Resource Upgrade Drilling Confirms High-Grade Potential

Phase 1 drilling, comprising nearly 19,000 metres of RC drilling, delivered impressive high-grade intersections, including assays such as 27 metres at 2.68 g/t Au with higher-grade intervals up to 38.7 g/t Au, and 41 metres at 2.21 g/t Au including 7 metres at 9.61 g/t Au. These results underpin the upgrade of the S1 and S2 pit areas to higher confidence resource categories, essential for mine planning and financing.

The ongoing Phase 2 drilling aims to extend this confidence across the remainder of the OSS-modelled open pit mineralisation, with a further ~30,000 metres of RC drilling underway alongside the diamond drilling. The combined program targets a declared Ore Reserve, a robust PFS, and the ML application by the end of 2026.

Barton’s aggressive push at Tunkillia follows recent successes at its Challenger Gold Project, where significant high-grade gold assays up to 60 g/t were reported from shallow drilling, reinforcing the company’s regional development strategy and resource upgrade momentum. This broader drilling campaign at Challenger, including an 8,065-metre RC program, is part of a Definitive Feasibility Study targeting a low-risk operational restart of the Central Gawler Mill, a key regional processing asset also owned by Barton. The synergy between these projects enhances the company’s growth outlook.

Next Steps and Market Implications

Following the ML application, Barton plans to accelerate project financing discussions and stakeholder engagement to expedite bringing Tunkillia online. The company currently operates three drill rigs across the project, underscoring its commitment to a fast-tracked development timeline.

While the drilling results to date are promising, the market will be watching closely for the final Phase 2 assays and the outcomes of the PFS, which will provide greater clarity on capital requirements and operational parameters. Commodity price volatility and regulatory approvals remain key variables that could influence project economics and timing.