Qualified audit opinion puts Manuka’s restart economics under scrutiny

Auditor Flags Asset Valuation and Funding Risk

Manuka Resources Ltd (ASX:MKU) has spent FY26 rebuilding its mining operation, but the annual report makes clear that the restart remains financially fragile. Auditor RSM Australia Partners issued a qualified opinion after it was unable to obtain sufficient evidence to assess the recoverable value of $38.6 million in exploration and evaluation assets, $35.8 million in property, plant and equipment and $205,586 in right-of-use assets.

The concern is not merely accounting theory. Manuka reported a $28.1 million net loss for the year, no sales revenue and net cash outflows from operating and investing activities of $38.8 million. At 30 June, it held $7.85 million in cash against total borrowings of $46.3 million and current liabilities exceeded current assets by $6.1 million. RSM also highlighted a material uncertainty that may cast significant doubt on the group’s ability to continue as a going concern.

Wonawinta Restart Reaches Production Phase

The operational story is more encouraging, at least on paper. Manuka refurbished and recommissioned the Wonawinta processing plant, expanded its workforce from five people on care and maintenance to more than 80, and began screening and hauling Mt Boppy gold material to the plant. The company says gold processing recommenced after year end, with first gold revenue expected by the end of September 2026.

Silver is scheduled to follow once the front-end crushing and deslime circuits are completed, with commissioning targeted for December 2026 or January 2027. The upgraded plant is designed for capacity above 1.0 million tonnes a year, while Manuka says the Mt Boppy material could support roughly four to five years of processing at about 20,000 tonnes a month. The restart plan also sits alongside a recent 28% increase in Wonawinta’s Probable Ore Reserve, taking the reported reserve to 7.9 million tonnes at 50.4 grams per tonne silver for 12.8 million ounces of contained silver.

Debt and Equity Have Funded the Rebuild

Manuka raised an A$8.0 million entitlement offer and an A$15.0 million institutional placement during the year, while a US$30 million senior secured facility from Nebari Natural Resources Credit Fund II refinanced legacy debt and funded the restart. The balance sheet improved in headline terms, with net assets rising to $24.3 million from $2.3 million a year earlier, but the group also incurred $8.9 million in finance costs and remains dependent on further funding.

The directors say additional debt facilities and capital-market funding will be needed during the start-up phase, alongside successful and consistent gold production. A further A$14.5 million placement was announced after year end to complete the silver deslime circuit. That funding requirement is central to the investment case: production must move quickly from forecast revenue to reliable cash generation before the company’s debt service, supplier obligations and operating costs become more demanding.

Taranaki Consent Setback Leaves Long-Term Asset in Limbo

Manuka’s New Zealand exposure also took a regulatory hit. Its wholly owned Trans-Tasman Resources subsidiary withdrew the Taranaki VTM project’s fast-track marine consent application in February 2026 after an expert panel issued a draft decision that it was not satisfied the project could proceed amid uncertainties around environmental and cultural impacts. Manuka retains ownership and the right to reapply, but the project is no longer an immediate development driver while management focuses on the Cobar Basin restart.

The next test is therefore operational rather than promotional: whether gold revenue arrives on schedule, whether the deslime circuit enters service within the stated window and whether early production can generate enough cash to reduce the company’s reliance on new capital. The qualified audit opinion means reported asset values cannot be treated as settled while those funding and production questions remain unresolved.