Lunnon Metals Delivers Record May Gold Output and Clears $6 Million Debt Early

Record Monthly Gold Production Boosts Cash Flow

Lunnon Metals (ASX:LM8) has hit a new operational milestone at its Lady Herial open pit gold mine, delivering over 52,000 tonnes of ore grading 1.71 grams per tonne (g/t) for a total of 2,865 ounces of gold in May 2026. This marks the company’s best monthly performance to date, with revenue from gold sales to Gold Fields’ subsidiary St Ives Gold Mining reaching approximately $10.8 million (GST exclusive, unaudited), comfortably covering operating expenses of $3.4 million for the month.

The strong cash generation has allowed Lunnon Metals to repay its $6 million working capital facility ahead of schedule, clearing the debt on 17 June 2026. This facility was originally drawn to fund pre-production and site establishment costs at Lady Herial, and its early retirement leaves the company debt free as it heads into the new financial year.

Mining Progress on Track with Improving Margins

Mining operations have proceeded smoothly, with no disruptions from weather or diesel supply issues. The pit has reached the 295mRL bench, progressing steadily towards the planned bottom at 270mRL. To date, 76% of the total pit volume has been mined, delivering 44% of the forecast gold ounces. This favourable ratio means the strip ratio and waste volumes will decline as the pit nears completion, expected in August or September 2026, enhancing operating margins in the final months.

The Ore Purchase Agreement with Gold Fields continues to function as intended. Since mining began, over 144,000 tonnes at 1.53 g/t Au have been delivered, yielding 6,451 ounces after metallurgical recovery of 91%. The realised gold price averaged A$6,625 per ounce, about 6% above the A$6,250 per ounce assumed in the January feasibility study, offsetting a roughly 20% increase in operating costs driven mainly by higher diesel prices.

Robust Financial Position Supports Exploration Ambitions

Excluding June’s cash flow, expected to be received in July, Lunnon Metals estimates it will hold approximately $21 million in cash by the end of June 2026. Managing Director Edmund Ainscough highlighted the seamless collaboration between Lunnon Metals, Gold Fields, and mining contractors, noting that the improving strip ratio and access to higher grade ore will further enhance margins. The strong cash position and debt-free status set the stage for an expanded exploration program across the company’s 23 square kilometres of the St Ives gold camp, a prolific Australian gold district.

Gold mineral resources at Lady Herial and surrounding deposits stand at 1.47 million tonnes grading 1.8 g/t for 84,400 ounces, inclusive of ore reserves. Nickel resources are also detailed, reflecting the company’s broader Kambalda Gold & Nickel Project footprint. Rehabilitation of waste dumps and construction of abandonment bunds continue alongside mining, demonstrating ongoing environmental management.

Feasibility Study Assumptions Holding Firm

Lunnon Metals reaffirmed that all material assumptions underpinning the feasibility study remain valid despite cost pressures and gold price fluctuations. The company’s sensitivity analyses indicate current operating costs and gold prices fall within expected ranges, supporting the forecast production and financial outcomes. However, the usual risks around commodity prices, mining performance, and operational factors remain relevant.

With mining slated to wrap up by September and a strong cash buffer in place, Lunnon Metals is positioned to capitalise on the St Ives camp’s exploration potential. The company’s ability to convert operational success into financial strength will be crucial as it transitions from open pit mining to discovery and development phases.