Vault Minerals generated $95.7 million in underlying free cash flow during the September quarter, while completing its King of the Hills Stage 2 upgrade ahead of schedule and maintaining FY27 production guidance. Operational performance was mixed, with weather, lower grades and underground constraints weighing on output at several sites.
- 76,849 ounces of quarterly gold production at A$3,529 per ounce AISC
- $95.7 million underlying free cash flow before the Regis break fee
- King of the Hills Stage 2 upgrade completed on time and on budget
- FY27 guidance maintained at 355,000 to 375,000 ounces
- Genesis merger remains targeted for implementation in late November
Cash generation holds up as production remains mixed
Vault Minerals (ASX:VAU) produced 76,849 ounces of gold in the September quarter and sold 79,085 ounces at an average realised price of A$6,023 per ounce. All-in sustaining cost was A$3,529 per ounce, leaving the company with $95.7 million in underlying free cash flow before a $50.7 million break fee tied to the terminated Regis Resources transaction.
Cash and bullion rose to $886.7 million at quarter end, with no corporate debt and no gold hedge exposure. That balance excludes $33.6 million of gold in circuit and concentrate on hand at net realisable value. The company spent $59.5 million on growth during the quarter, including the King of the Hills processing upgrade, owner-operator preparations, open-pit waste stripping, exploration and Sugar Zone development.
Leonora leads production while weather disrupts mining
Leonora supplied 44,467 ounces at an AISC of A$2,885 per ounce, despite significant rainfall, lower underground production and downtime at Darlot. Mill throughput increased 10% from the previous quarter, but lower feed grades and constraints affecting KoTH and Darlot limited the benefit. Mount Monger produced 15,320 ounces at A$3,865 per ounce, with rainfall affecting access roads and reagent availability, while Deflector produced 17,062 ounces of gold and 76 tonnes of copper at A$4,987 per ounce.
Deflector’s reported cost included a A$307 per ounce non-cash inventory charge, an important qualification to the headline group figure. At Mount Monger, stockpiles increased by roughly 9,000 ounces during the quarter, while Deflector’s stockpiles declined by about 2,300 ounces. The operational picture is therefore less about a single group-wide trend than about differing mine schedules, grades and inventory movements.
KoTH upgrade reaches commissioning phase
The Stage 2 King of the Hills processing upgrade was completed ahead of schedule and on budget, with tie-ins and commissioning under way in early October. The project is designed to lift throughput capacity to 7.5 million to 8.0 million tonnes a year through a new 9MW ball mill, expanded pebble crushing, a gravity circuit upgrade and additional power generation capacity. Performance testing was scheduled for late October, with full processing rates expected to begin in November.
Vault is also preparing to take KoTH load and haul operations in-house from 1 January 2027. The first four Hitachi haul trucks had arrived and been assembled by quarter end, while the first excavator was scheduled for delivery in November. These milestones matter because the company’s standalone FY27 guidance remains 355,000 to 375,000 ounces at an AISC of A$3,150 to A$3,350 per ounce, with production targeted to rise to 380,000 to 400,000 ounces in FY28.
Sugar Zone development resumes ahead of planned restart
At Sugar Zone, underground development restarted on 1 July and advanced 340 metres during the quarter. Site staffing increased 87% from 30 June to 97 employees as Vault recruited underground operators. The development work is intended to generate construction material for the Southern Tailings Management Facility and ore stockpiles ahead of a planned plant restart in the first quarter of FY28.
Exploration focused on the southern extension towards the Lynx zone, with drilling at the TT8 target expected to begin in late October. A subsequent program is planned for the Sugar South crown pillar, which is not included in current Ore Reserves. The filing does not establish whether that work will add reserves, but it identifies the area as a potential source of shallow, high-grade mineralisation.
Genesis scheme moves towards the shareholder vote
The proposed merger with Genesis Minerals remains targeted for implementation in late November, subject to shareholder approval and other conditions, including possible Supreme Court of Western Australia approval. Vault’s scheme booklet was released after the quarter, and the independent expert concluded the transaction was in shareholders’ best interests in the absence of a superior offer. The company now approaches the 11 November scheme meeting after the Genesis merger vote was placed at the centre of its near-term timetable.
The transaction would bring Vault’s and Genesis’s Leonora operations under single ownership, according to the company. The quarter also carried forward the significance of Vault’s 2026 Ore Reserve increase, with total gold Ore Reserves reported at 3.9 million ounces and Mineral Resources at 12.1 million ounces as at 30 June 2026, both described as higher year on year net of depletion.
Bottom Line?
Vault enters the merger vote with strong liquidity and maintained guidance, but the next test is whether KoTH commissioning and underground ramp-ups convert project spending into the promised production growth.
Questions in the middle?
- Can the KoTH Stage 2 upgrade reach full processing rates in November without disrupting quarterly production?
- Will staffing, equipment availability and weather allow Leonora and Sugar Zone to deliver their planned ramp-ups?
- Will shareholders approve the Genesis scheme on 11 November and will all remaining court and transaction conditions be satisfied?