Tolu Minerals Limited is pushing ahead with the Tolukuma Gold Mine restart, reporting strong underground development, near-mine high-grade gold intercepts, and processing plant refurbishment nearing completion. The company targets a staged production ramp-up to 500 tonnes per day from Q1 2027, supported by an expanding drilling fleet and significant infrastructure upgrades.
- High-grade gold intercepts at Zine North bolster resource growth
- Mine-Defining Expansion Project progressing toward contract award
- Drilling fleet expanding to eight rigs by June 2026
- Processing plant refurbishment and hydro power projects advancing
- Convertible notes raise A$23.75 million pending shareholder approval
High-Grade Exploration Boosts Near-Mine Resource Potential
Tolu Minerals Limited (ASX:TOK) has unveiled compelling high-grade gold results from its near-mine exploration at the Zine North prospect, reinforcing the potential for early production and longer-term resource expansion at the Tolukuma Gold Mine in Papua New Guinea. Notably, drillholes returned intercepts such as 4.10 metres at 11.2 grams per tonne (g/t) gold, including a standout 1.1 metres at 21.6 g/t, alongside additional intercepts reaching 26.6 g/t Au. These mineralised zones occur at shallow depths, supporting both open pit and underground mining scenarios.
The company’s disciplined focus on near-mine targets is validated by these results, which complement ongoing drilling at other prospects including Gufinis, Gulbadi, and Fundoot. Tolu has ramped up its drilling capacity significantly, expanding from a single man-portable rig to a fleet of seven rigs currently in operation, with an eighth rig scheduled for deployment in June. This expansion aims to accelerate the delivery of production-ready ounces and enhance resource confidence through both surface and underground drilling programs.
Operationally, the underground development at Tolukuma is steadily progressing, with dewatering and rehabilitation activities advancing as planned. Improved access and infrastructure readiness are positioning the mine for a controlled transition back into production, targeting a staged restart at approximately 500 tonnes per day commencing in the first quarter of 2027.
Mine-Defining Expansion Project and Infrastructure Upgrades
The Mine-Defining Expansion Project remains central to Tolu’s development strategy, aiming to unlock around 2 kilometres of strike and access deeper high-grade zones through a new incline and tunnel system. The project includes integrated infrastructure solutions such as dewatering, ventilation, and tailings paste backfill, all designed to underpin sustainable underground operations.
Processing plant refurbishment is nearing completion, with key components like the SAG mill, Knelson concentrator, and Acacia reactor refurbished and ready. Early-stage gold recovery systems, including elution and carbon units, are operational as the company prepares for a phased plant restart. Parallel infrastructure projects include a hydro power initiative progressing through commercial and technical stages in partnership with Entura, a specialist Australian consulting firm, and an on-site assay laboratory slated for commissioning in the third quarter of 2026. These developments are expected to enhance operational efficiency and cost control once production resumes.
Financial Position and Capital Raising
Financially, Tolu Minerals strengthened its capital base with the recent completion of a A$23.75 million convertible note issue to Petrosea Services Solutions Pte Ltd, with funds already deposited. Conversion of these notes into ordinary shares at a price of A$1.625 per share awaits shareholder approval anticipated by the end of May. This infusion supports ongoing exploration, development, and infrastructure investment at Tolukuma.
The company ended the March quarter with cash reserves of A$38.9 million, following exploration expenditure of A$7.8 million and capital spending on property, plant, and equipment of A$2.4 million. Operating cash outflows were modest, reflecting the pre-production status. Tolu’s capital structure includes approximately 259 million fully paid shares and over 11 million performance rights, positioning it to fund the next phases of its restart plan.
Dr Chris Muller, Managing Director and CEO, emphasised the company’s methodical approach: “The March quarter reflects disciplined execution across all workstreams at Tolukuma, with measurable gains in underground access, plant readiness, and overall site capability. We anticipate a significant suite of new drilling results in the June quarter, which will further inform our resource growth and production ramp-up plans.”
These developments build on previous capital raises and operational progress, including the recent $23.75M convertible note and the company’s commitment to a 500 tonnes per day production target by early 2027, as outlined in earlier updates 500 TPD production target. The expansion of the drilling fleet and infrastructure upgrades are critical to meeting these objectives.
Bottom Line?
Tolu Minerals is methodically advancing Tolukuma toward production with high-grade drilling and infrastructure progress, but pending assay results and contract awards will be key milestones to watch.
Questions in the middle?
- Will the pending assay results in May-June confirm and expand the high-grade resource base at Tolukuma?
- How swiftly will the Mine-Defining Expansion Project contract be awarded and executed to unlock deeper zones?
- What impact will the hydro power and assay lab commissioning have on operational costs and production timelines?