Red Hill’s royalty income backs a deeper copper-gold exploration push

Onslow royalty generates A$6.0 million

Red Hill Minerals Limited (ASX:RHI) remains anchored by a producing royalty rather than a mine of its own, and that distinction mattered again in the September quarter. The company earned A$5.97 million from its 0.75% FOB royalty over Mineral Resources’ Onslow Iron Project, based on 8.54 million dry metric tonnes shipped from the relevant joint venture area.

MinRes reported 9.2 million wet metric tonnes shipped from Onslow Iron during the quarter, equivalent to an annualised rate of 36.9 million wet metric tonnes. Mining and crushing also reached quarterly records, although Red Hill said higher shipping costs, partly attributed to the ongoing conflict in the Middle East, continued to reduce the value of its FOB-linked royalty calculation. The quarter’s royalty revenue included adjustments relating to prior periods.

Dividend paid as exploration spending continues

Red Hill ended September with A$58.7 million in cash, down from A$62.8 million three months earlier. The movement reflected A$6.9 million paid as a fully franked dividend, A$2.3 million of exploration expenditure and A$2.5 million in income tax payments, partly offset by A$7.7 million in royalty receipts.

The payment was the latest expression of the company’s dividend-generating royalty model, which had already been highlighted in its FY2026 dividend and profit result when Red Hill reported A$20.1 million in net profit and a 10.8 cents per share final dividend. The September payment preserves shareholder distributions while leaving a substantial cash balance to fund exploration across a broad portfolio.

Anabama drilling extends copper search at depth

The most consequential exploration work came from Anabama in South Australia, where Red Hill completed two diamond holes totalling 1,431 metres. The program followed the Anabama conductor drilling program launched in July to test a strong off-hole electromagnetic anomaly along the project’s copper-gold corridor.

Hole 26ANDD001 appears to have straddled the edge of the conductor and intersected multiple narrow, high-tenor copper-gold zones. Red Hill believes these may represent leakage from a larger mineralised source associated with the conductor, but that source remains untested. A downhole electromagnetic survey planned for November is intended to refine the conductor’s position.

The second hole, 26ANDD002, stepped 450 metres farther southwest and encountered copper mineralisation in a previously unrecognised geological setting. The key interval was 7 metres at 0.7% copper from 628 metres, including 1.6 metres at 2.0% copper from 630 metres, near the contact between a newly identified siliceous dolomitic unit and underlying volcanics. Red Hill plans further petrographic work before deciding the next exploration phase.

Broken Hill and West Pilbara targets move forward

At the 860-square-kilometre Broken Hill Project in New South Wales, Red Hill began a 1,700-metre diamond program at the Dementus and Furiosa targets. Dementus drilling is following up more than 250 metres of prospective stratigraphy containing anomalous lead, zinc and silver, while Furiosa is testing a fault corridor with potential for copper-gold mineralisation. The first Dementus hole is expected to be completed in November, with DHEM surveying and assays still to come.

In Western Australia, drilling at the G1 and Barkley gold targets produced multiple narrow or modestly anomalous gold zones, accompanied by extensive alteration at G1. No significant results were received from the King Brown base-metal target. Red Hill also secured an Exploration Incentive Scheme grant of up to A$180,000 for diamond drilling at S-Bend, where anomalous zinc and sulphide-bearing intervals have been identified; drilling is planned for next year after the required heritage survey was completed.

Sandstone royalty gains resource and funding support

Red Hill’s 2% gross revenue royalty over part of Brightstar Resources’ Sandstone Gold Project also strengthened during the quarter. The royalty-covered deposits now contain 35.2 million tonnes at 1.3 grams per tonne gold for 1.341 million ounces, an increase of 295,000 ounces in the resource underpinning Red Hill’s interest.

Brightstar subsequently announced an A$82 million capital raising, including A$30 million from Genesis Minerals, to accelerate drilling and development work. Brightstar has indicated that another resource upgrade, a pre-feasibility study and a maiden ore reserve are expected in the second half of calendar 2026. Those milestones could clarify the future development pathway for the asset, but they remain future deliverables rather than current royalty income.