TG Metals builds two project pathways as Van Uden economics take shape

• Van Uden study forecasts A$26.8 million pre-tax NPV8 and 121.7% IRR
• Heap-leach project targets 13,630 ounces over an initial three-year mine life
• Burmeister lithium resource totals 6.71Mt at 1.18% Li2O, entirely Inferred
• Non-binding agreement covers processing 60,000 tonnes of Van Uden stockpiles
• A$1.523 million cash balance implies 1.05 quarters of funding at current outgoings

Van Uden study points to rapid payback

TG Metals Limited (ASX:TG6) has put a striking set of preliminary numbers around its Van Uden gold project, while simultaneously flagging the funding gap between a promising study and an operating mine. The proposed Western Australian heap-leach operation carries a pre-tax NPV8 of about A$26.8 million, a pre-tax IRR of 121.7% and an estimated payback period of roughly 12 months.

The study models a 250,000-tonne-per-year operation over an initial three-year mine life, recovering approximately 13,630 ounces of gold. Pre-production capital is estimated at A$14.2 million, with total life-of-mine capital, sustaining capital and closure costs of A$15.5 million. Forecast net revenue is about A$83.2 million and forecast AISC is A$2,835 an ounce, based on a gold price of US$4,400 an ounce and an AUD/USD exchange rate of 0.70. The earlier Van Uden heap-leach study outlined the same preliminary economics in September.

Those figures are not a production forecast backed by an Ore Reserve. The scoping study has an estimated accuracy of approximately plus or minus 35%, and its mine plan includes 15% Inferred material, although TG Metals says the project remains cashflow-positive without that component. The company is progressing a Pre-Feasibility Study, environmental surveys, permitting, residue testing, heap-pad design and financing discussions.

Stockpile deal could provide an earlier test

A separate route to near-term activity remains the non-binding Ore Processing and Profit Share agreement with Medallion Metals Limited (ASX:MM8). The arrangement covers about 60,000 tonnes of gold-bearing stockpiled material from Van Uden, to be hauled to Medallion’s converted Cosmic Boy processing plant.

Medallion would handle loading, haulage and processing, with profits shared equally after the agreed operating structure. TG Metals says approvals to remove the stockpiles are in place, while haulage roads and water for dust suppression have already been established. The key unresolved step is finalising the agreement and scheduling first haulage. The earlier 60,000-tonne processing deal was presented as a possible near-term revenue stream while the onsite heap-leach plan advanced.

Lake Johnston resource adds a second development option

TG Metals also declared a maiden Inferred Mineral Resource at the Burmeister lithium deposit of 6.71 million tonnes grading 1.18% Li2O. The estimate is reported above a 0.40% Li2O cut-off within an optimised open-pit shell and is focused on material considered potentially suitable for direct shipping ore. All of the resource remains Inferred, meaning further drilling and modifying factors are required before it can support a more advanced economic conclusion.

Beyond that resource, the company has outlined a conceptual Exploration Target of 11 million to 14.5 million tonnes grading between 0.90% and 1.20% Li2O. TG Metals explicitly cautions that this material is not a Mineral Resource and may not convert into one. Metallurgical work has indicated potential to produce an approximately 1.5% Li2O product using ore sorting, while flotation and heavy liquid separation tests produced concentrates grading 5.28% to 5.74% Li2O with lithium recoveries of 75.5% to 80.2%. Infill drilling is intended to test the target and provide samples for potential offtake partners, building on the maiden Burmeister lithium resource.

Cash balance leaves limited room for delay

The quarter’s financial position is less comfortable than the project studies. TG Metals raised A$2.5 million through a placement at A$0.16 a share, received an A$262,570 R&D tax rebate and ended September with A$1.523 million in cash. It spent A$1.171 million on exploration, predominantly at Van Uden, and reported net operating cash outflow of A$281,000.

On the Appendix 5B calculation, total relevant quarterly outgoings were A$1.451 million, leaving 1.05 quarters of funding with no undrawn financing facilities. The company says drilling expenditure should fall substantially in the December quarter and that it can raise further equity or debt if required. That response is company guidance rather than committed funding, and the placement itself has already expanded the share count to 136.2 million ordinary shares, alongside 3 million options issued to the placement lead manager.

The immediate test is therefore execution rather than another headline resource number: whether the stockpile agreement becomes binding and starts moving material, whether Van Uden’s drilling supports a larger or longer-lived operation, and whether the company can fund the next study phase without losing momentum. The lithium resource offers a second development pathway, but both assets still require technical work, approvals and capital before the study economics become operating cash flow.

Bottom Line?

TG Metals now has two credible project narratives, but its next financing and the conversion of the Van Uden stockpile agreement into actual processing may matter as much as the headline study returns.

Questions in the middle?

• Can TG Metals finalise the Medallion agreement and commence stockpile haulage before its cash position requires another capital raise?
• Will Van Uden drilling convert the prospective transitional material into a resource that supports a longer mine life or larger operation?
• Can Burmeister’s entirely Inferred resource be upgraded quickly enough to support offtake, funding or a defined development study?