Lunnon Metals boosts cash to $22.2 million as Lady Herial mining wraps up, launching a record $13 million exploration budget targeting up to 2.4 million ounces of gold at Foster-Baker.
- Cash balance rises to $22.2 million at June 2026
- Over 90% of Lady Herial volume mined, 5,100 oz gold remains
- FY2027 $13 million exploration budget approved for Foster-Baker
- Hustler gold resource increases 20% to 36,200 ounces
- Early repayment of $6 million term loan enhances balance sheet
Strong Cash Flow Supports Near Completion of Lady Herial
Lunnon Metals Limited (ASX:LM8) is closing in on the end of mining at its Lady Herial open pit, with over 90% of the planned volume and 66% of the contained gold already extracted. The June quarter saw deliveries of 168,594 tonnes at 1.59 g/t gold, equating to 7,861 ounces after applying the 91% metallurgical recovery agreed with St Ives Gold Mining Co. Pty Ltd (SIGM), the company’s major shareholder and ore purchaser. Approximately two months of mining remain, with just over 80,000 tonnes at 2.1 g/t gold left to mine, expected to yield around 5,100 ounces.
The operation has generated robust cash flow, lifting the cash balance to $22.2 million at quarter-end, up from $12.25 million in March. A further $12 million was received in July, pushing the estimated cash balance close to $29 million. This strong liquidity position has allowed Lunnon Metals to repay its $6 million term loan facility early, removing associated securities and strengthening the balance sheet ahead of the next phase of exploration.
Aggressive $13 Million Exploration Budget Targets Significant Gold Potential
With Lady Herial mining winding down, Lunnon Metals is shifting focus to exploration at its Foster-Baker Area (FBA) within the prolific St Ives gold camp. The board has approved a $13 million budget for FY2027, underpinning a two-year program to test a declared Exploration Target of 1.2 to 2.4 million ounces of gold contained within 25 to 30 million tonnes of rock to a depth of 400 metres. This target is conceptual and reflects the significant under-exploration of the FBA, historically regarded as a nickel belt.
The planned program will deliver over 43,000 metres of drilling; the most surface exploration metres drilled in a single year in the FBA’s 60-year history; including reverse circulation, diamond, and aircore drilling. The strategy aims to rapidly identify and advance new gold discoveries, leveraging the infrastructure and permitting experience gained at Lady Herial.
Hustler Deposit De-Risked with Resource Upgrade and Scoping Study
Complementing the exploration push, the Hustler gold deposit has been de-risked through a 36-hole infill drill program, confirming continuity and supporting a 20% increase in its Mineral Resource estimate to 36,200 ounces. Post-quarter, Lunnon Metals reported this updated resource, which now totals 826,000 tonnes at 1.4 g/t gold. The company is progressing a scoping study to evaluate potential concurrent mining of Hustler and a possible cut-back at Lady Herial, aiming to optimise unit costs and timelines.
Permitting and technical assessments for both Hustler and the Lady Herial cut-back are underway, with ongoing discussions with SIGM to explore collaborative opportunities. Metallurgical test work aligned with processing at the nearby Lefroy Gold Plant is also in progress, underpinning the feasibility of future operations.
Nickel Assets Monitored Amid Market Developments
While gold operations take centre stage, Lunnon Metals continues to monitor its high-grade nickel sulphide portfolio at Foster-Baker and Silver Lake-Fisher. No on-ground activity occurred during the quarter, but the company is attentive to nickel price fluctuations and potential divestment of BHP’s Kambalda Nickel Concentrator, located just 20 kilometres north of Foster-Baker. The fully permitted Baker underground nickel mine remains a significant asset, ready for development pending favourable market conditions.
Community Engagement and Safety Compliance
Lunnon Metals maintained strong community relations during the quarter, hosting four Ngadju elders as part of the first Implementation Committee meeting and providing a tour of the Lady Herial pit. The company continues to honour its Land Access Deed with the Ngadju People, including royalty payments linked to gold production.
On safety, a single lost-time incident was reported and thoroughly investigated, with subsequent audits to reinforce contractor compliance with the Work Health and Safety Act 2020. These measures reflect Lunnon Metals’ commitment to responsible and safe operations.
Bottom Line?
With Lady Herial mining nearing completion and a record exploration budget in place, Lunnon Metals is well-positioned to transition from production to discovery, but the success of its ambitious drilling program will be critical to sustaining momentum.
Questions in the middle?
- Will the $13 million exploration program at Foster-Baker convert the conceptual Exploration Target into defined Mineral Resources?
- How will permitting and commercial arrangements with SIGM evolve for Hustler and the Lady Herial cut-back opportunities?
- What impact could BHP’s potential divestment of the Kambalda Nickel Concentrator have on Lunnon Metals’ nickel development plans?