A$501 million NPV and A$11.15 million cash shape Anax’s next step

Strong project economics meet a hard funding test

Anax Metals Limited (ASX:ANX) is presenting Whim Creek as a project with unusually strong headline economics, but its 2026 annual report carries an equally important qualification: the mine is not yet funded. The company’s auditor, Pitcher Partners, highlighted a material uncertainty over going concern because Anax needs to secure additional funding over the next 12 months to progress development.

The February 2026 update to the definitive feasibility study modelled a pre-tax NPV7 of A$501 million, a 98% internal rate of return and A$723 million of free cash flow on a 100% project basis, before financing. The model assumes A$91 million in development capital and working capital, with an estimated payback period of about 14 months. Anax owns 80% of Whim Creek, meaning its share of the project economics and costs would be lower than the headline figures.

Debt discussions remain indicative

The funding gap is the central issue. Anax says it has received indicative offers for up to US$40 million of debt financing against its 80% interest in Whim Creek, while lender due diligence and offtake discussions continue. Those offers remain subject to further due diligence, final credit approval and binding documentation. The company estimates its own contribution to project development at about A$76 million, including corporate costs, leaving a substantial financing task even after the proposed debt.

Anax strengthened its balance sheet during FY2026 through approximately A$18.4 million of equity raisings, including a A$10 million placement in two tranches and a further A$6 million placement to fund the Mons Cupri drilling programme. Cash stood at A$11.15 million at 30 June 2026, up from A$2.93 million a year earlier. That improvement reflects capital raising rather than operating cash generation: operating activities consumed A$3.19 million during the year, while the group reported a net loss of A$6.04 million, compared with A$3.80 million in FY2025.

FEED and drilling move into the critical path

Front-end engineering design began after year-end, with Anax targeting a Final Investment Decision in the fourth quarter of calendar 2026. The work is intended to refine the feasibility study’s capital and operating cost estimates before the decision. In parallel, an 18-hole, approximately 5,000-metre diamond drilling programme commenced at Mons Cupri on 22 July, targeting extensions to the main lens at depth and along strike, as well as additional volcanogenic massive sulphide mineralisation.

The drilling follows an August resource update that lifted Mons Cupri to 6.32 million tonnes at 1.38% copper equivalent on a 100% project basis. Anax says the updated estimate represented a 24% increase in resource tonnes and a 20% increase in contained copper-equivalent metal, but the February DFS, existing reserve and production target do not incorporate that update. An updated ore reserve is targeted for the December 2026 quarter, making it a potentially important bridge between exploration success and the project’s development case.

Heap leach adds another development option

Anax is also testing whether Whim Creek’s permitted heap-leach infrastructure can operate as a second processing stream alongside the proposed sulphide concentrator. A feasibility study launched after year-end will examine the treatment of lower-grade and transitional material, as well as the potential production of copper cathode and zinc sulphate. Completion is targeted for the March 2027 quarter. The company says the study will update recovery, price, exchange-rate, capital and operating-cost assumptions before considering how the stream could fit into the broader development schedule.

That optionality may broaden the project’s processing case, but it does not remove the immediate financing hurdle. Whim Creek remains pre-production, there are no binding offtake agreements for its concentrates, and the annual report states that Anax is not currently generating enough operating cash flow to fund all planned activities. The company also carries an A$11.01 million rehabilitation provision linked to the historical mine site.

The next decision is financial, not geological

For shareholders, the key test is whether Anax can convert a compelling pre-financing feasibility model into binding debt, offtake and equity arrangements on acceptable terms. The targeted Q4 2026 financing and FID decision, alongside the updated Mons Cupri reserve, will determine whether the project’s large paper value begins to acquire development credibility - or remains dependent on another round of capital and more favourable funding conditions.