Southern Cross Gold accelerates Sunday Creek toward underground drilling

• 17,564 metres drilled during Q1 FY2027 across the Sunday Creek project
• C$32.9 million deployed on drilling, development, land and exploration
• Cash declined to C$84.0 million, with a C$4.4 million quarterly loss
• Exploration decline completion delayed to January 2027, although costs remain within budget
• Maiden mineral resource targeted for Q1 CY2027 and PEA for mid-2027

Sunday Creek moves from drilling campaign to underground development

Southern Cross Gold Consolidated Ltd. (ASX:SX2) is spending heavily to turn Sunday Creek from a promising exploration story into a more developed mining project. During the three months ended August 31, 2026, the company drilled 17,564 metres with 12 surface rigs, began continuous underground development and deployed C$32.9 million across drilling, the exploration decline, land acquisition and regional exploration.

The company had reported 140,849 metres across 288 holes at Sunday Creek by October 7. Its 200,000-metre programme remains aimed at a maiden mineral resource in Q1 CY2027, with underground drilling contracts approved in August as platforms become available. Results from 72 holes were still pending at October 7, adding a near-term flow of potential news to an already active programme.

The latest phase of the programme includes the Golden Dyke infill results, which had delivered high-grade intersections and extended the prospect west towards Christina. The filing records results including 2.7 metres at 178.6 grams per tonne gold equivalent and 6.8 metres at 50.1 grams per tonne gold equivalent, while four vein sets fell outside the current Exploration Target.

Decline schedule slips as cash funds a larger work programme

Underground decline development reached 282.3 metres by August 31, against an approximately 1,131-metre plan. Poor ground conditions, particularly in the decline floor, slowed August’s advance and required rectification work. Completion is now forecast for January 2027 rather than December 2026, although management says development costs remain within budget.

Cash and cash equivalents fell from C$119.1 million at May 31 to C$84.0 million at quarter end. Net cash used in operating activities was C$5.8 million, while investing activities absorbed C$29.4 million, including C$15.2 million on exploration and evaluation assets and C$14.2 million on property, plant and equipment. The company also spent C$13.9 million acquiring agricultural properties over the Sunday Creek project area.

Southern Cross reported a C$4.4 million net loss for the quarter, compared with C$0.9 million a year earlier. Administration and corporate costs rose to C$3.2 million from C$1.1 million, while salaries and benefits increased to C$1.7 million as the Australian workforce expanded. Management says the company has sufficient cash to fund operations through the planned resource establishment and PEA milestones, based on an expected deployment of about C$25 million in the next quarter before spending returns to roughly C$10 million per quarter.

Mining licence application opens the next approvals stage

Resources Victoria accepted Sunday Creek mining licence application MIN009040 on September 22, after the quarter ended. The application covers about 30.7 hectares of company-owned freehold land around the historic Golden Dyke workings. Acceptance begins a public assessment process, rather than authorising mining; a planning permit, an approved Mine Work Plan and a rehabilitation bond would still be required before mining could begin. The filing’s regulatory update follows the Golden Dyke licence application, which had opened the formal public assessment pathway.

Exploration Target remains conceptual ahead of resource estimate

The company continues to work from an Exploration Target of 10.4 million to 11.9 million tonnes grading 8.9 to 12.1 grams per tonne gold equivalent, equivalent to 3.0 million to 4.6 million ounces. That target spans five prospects across 1,500 metres of strike, but Southern Cross stresses that it is conceptual, is not a mineral resource and may not result in one. The target was expanded in August from three prospects to five, in the same programme covered by the 4.6 Moz Exploration Target.

Drilling released after quarter end included a 0.6-metre intersection at 993.2 grams per tonne gold equivalent at Apollo East, about 620 metres below surface, and a 5.1-metre intersection at 27.2 grams per tonne gold equivalent at Apollo East. Those results are exploration results, not evidence of economic reserves. The company has no production revenue and has not established proved reserves at its mineral interests.

Resource, underground drilling and PEA set the next milestones

The immediate test is execution. Southern Cross plans to continue surface drilling with 12 rigs, establish underground drill platforms as the decline advances, progress the mining licence application and continue environmental and community work. It is also targeting a Preliminary Economic Assessment by the end of June 2027.

The interim financial statements are unaudited and were not reviewed by the company’s auditors. For shareholders, the central tension is now clear: the project is generating a substantial stream of geological data and moving into underground work, while the cash balance is being consumed before Sunday Creek has a resource, a mining approval or production revenue.

Bottom Line?

Southern Cross has funded the next major Sunday Creek milestones from C$84.0 million of cash, but the January decline target and Q1 CY2027 resource timetable now carry greater execution importance.

Questions in the middle?

• Can the exploration decline recover its schedule after the January 2027 completion forecast, and when will underground drilling begin at scale?
• Will the maiden mineral resource support the current conceptual Exploration Target of 3.0 million to 4.6 million ounces gold equivalent?
• How quickly will cash consumption fall after the current land and development spending, and when might further funding become necessary?