Medallion Metals has signed a non-binding Term Sheet with TG Metals to process 60,000 tonnes of gold stockpiles at its Cosmic Boy Concentrator, sharing pre-tax profits equally after cost recovery. This deal complements Medallion’s Early Production Strategy and will not disrupt its Ravensthorpe project timeline.
- Non-binding agreement to process 60kt of Van Uden stockpiles
- Profit sharing 50:50 after Medallion recoups costs
- Deal leverages available capacity at Cosmic Boy Concentrator
- Complements Early Production Strategy and Toll Processing Agreement
- No impact on Ravensthorpe Gold Project schedule
Ore Processing Partnership Targets Underutilised Capacity
Medallion Metals (ASX:MM8) has taken a pragmatic step to monetise excess processing capacity at its Cosmic Boy Concentrator (CBC) by entering a non-binding Term Sheet with TG Metals (ASX:TG6). The agreement proposes processing around 60,000 tonnes of gold-bearing stockpiles from TG Metals' Van Uden Gold Project through Medallion’s CBC, located within its Forrestania Gold Project.
This arrangement is structured as an Ore Processing and Profit Share deal, where Medallion will first recover capital and operating costs associated with stockpile recovery, transport, and processing. Thereafter, pre-tax profits will be split evenly between the two parties. Medallion will handle all operational aspects including tailings management, while TG Metals remains liable for royalties.
Strategic Fit with Early Production and Toll Processing
The proposed deal supplements Medallion’s recently announced Toll Processing Agreement, boosting total third-party feed to approximately 260,000 tonnes. This aligns with the company’s Early Production Strategy (EPS), which aims to generate cash flow ahead of full-scale production at the Ravensthorpe Gold Project. Importantly, Medallion has confirmed that processing the Van Uden stockpiles will not interfere with its development schedule or the targeted start of production at Ravensthorpe, preserving its core project timeline.
Managing Director Paul Bennett highlighted the commercial logic behind the deal, noting it provides a revenue pathway for TG Metals while optimising the CBC’s capacity. Bennett also emphasised Forrestania’s underexplored potential, positioning Medallion as a key processing hub in the region. This fits with the company’s broader strategy to accelerate production and cash flow generation, as seen in its recent move to fast-track the EPS using existing infrastructure and third-party ore feed sources.
Conditions and Next Steps
The Term Sheet remains non-binding and subject to customary conditions including due diligence and regulatory approvals. Ore deliveries and processing are expected to commence once these conditions are met. Medallion will make provisional payments after each processing batch with final reconciliation based on actual costs, metallurgical performance, and gold sales proceeds. Should a binding agreement be executed, the company has committed to disclosing material terms to the ASX.
While the deal is a logical extension of Medallion’s strategy to leverage existing assets, it carries the usual uncertainties of early-stage agreements. The financial upside depends on operational efficiency and gold price dynamics, and there is no certainty the binding contract will be finalised.
Bottom Line?
Medallion’s proposed profit share deal with TG Metals could unlock additional cash flow without disrupting its core project timelines, but execution risks and market variables remain.
Questions in the middle?
- Will the binding Ore Processing and Profit Share Agreement be executed following due diligence?
- How will processing Van Uden stockpiles impact operational efficiency at the Cosmic Boy Concentrator?
- What are the potential financial implications for Medallion if gold prices fluctuate during processing?