Minerals 260 advances Bullabulling toward a 19-year gold operation

Bullabulling resource reaches 6.2Moz

Minerals 260 Limited (ASX:MI6) is no longer presenting Bullabulling as merely an exploration story. Its FY26 annual report describes a project with a 6.2 million ounce Mineral Resource, a maiden 2.5Moz Ore Reserve and a pre-feasibility study built around a 19-year, 2.3Moz gold operation. The figures are substantial, although they remain study-stage outcomes rather than an operating mine.

The July 2026 resource estimate totals 190 million tonnes at 1.0 grams per tonne of gold, including 4.4Moz classified as Indicated. The Ore Reserve, by contrast, totals 90Mt at 0.86g/t for 2.5Moz and is based on the December 2025 resource, not the larger July estimate. That distinction matters: the newer resource will be incorporated into the Definitive Feasibility Study and future reserve updates, but it has not yet altered the reserve underpinning the current mine plan.

PFS economics set a demanding benchmark

The PFS outlines average production of about 150,000 ounces a year during the first decade and roughly 125,000 ounces over the life of the operation. Using a gold price assumption of US$3,800 an ounce and a 0.69 US dollar-Australian dollar exchange rate, the study produces a post-tax NPV5 of A$2.3 billion, a 43% post-tax internal rate of return and capital payback of about two years from production commencement.

Those numbers are forecast economics, not historical financial performance, and the company cautions that the non-IFRS measures are unaudited and sensitive to the underlying assumptions. The proposed first stage is a conventional 5Mtpa open-pit operation, with first production targeted for Q4 CY2028 subject to the DFS, approvals, financing and Board approval.

Franco-Nevada funding reshapes the balance sheet

Minerals 260 finished June with A$211.3 million in cash and short-term deposits, compared with A$54.4 million a year earlier. The improvement was driven largely by the A$220 million February funding package with Franco-Nevada, comprising A$170 million in royalty consideration and a A$50 million equity investment. The royalty proceeds also explain much of the reported A$83.5 million net profit, which should not be mistaken for operating revenue or mining earnings.

After year-end, the company agreed a further A$200 million Franco-Nevada package and secured firm commitments for a A$250 million placement at A$0.88 a share. Tranche 1 raised about A$178.9 million and was completed in September, while the A$71.1 million second tranche, including Franco-Nevada's A$30 million cornerstone commitment, remained subject to shareholder approval at the report date. The additional royalty takes Franco-Nevada's aggregate interest to 3.90% over the expanded royalty area before stepping down to 2.75% after cumulative production reaches 6Moz.

Construction groundwork moves ahead of the DFS

Work on the physical project has begun, but it is still enabling infrastructure rather than mine production. Minerals 260 has started construction of a 400-person accommodation village under a fixed-price A$59.1 million contract, with the initial stage expected to be operational in Q1 CY2027. Water investigations, production and monitoring bores, communications infrastructure, metallurgical testwork and geotechnical studies are also progressing.

The company completed 26,000 metres of grade-control drilling at Phoenix and expanded the broader project footprint to about 1,527 square kilometres, from roughly 130 square kilometres at acquisition in April 2025. The next critical test is the DFS, targeted for completion in Q1 CY2027, alongside project approvals and the debt financing process that Minerals 260 says will provide the remaining funding required for development.