Terra Metals builds Southwest toward a maiden resource after 76,000m drilled

Southwest expands as Terra targets Q1 2027 resource

Terra Metals Limited (ASX:TM1) is moving its Southwest discovery into the resource-definition phase with a sizeable backlog of assays still to come. The PGM-copper-nickel system at the 100%-owned Dante Project in Western Australia now extends approximately 1,350 metres along strike, 700 metres across strike and at least 750 metres down dip, remaining open in both directions.

Terra completed approximately 76,000 metres of reverse-circulation and diamond drilling at Southwest by the end of the September quarter, with four rigs continuing on site in October. More than 40,000 samples were at the laboratory at quarter end, leaving the company with a substantial stream of results to feed into geological modelling and the planned maiden Mineral Resource Estimate in Q1 2027.

The scale-up builds on the near-surface Southwest drilling, which included 194 metres at 1.01 grams per tonne 3E from 15 metres and 200 metres at 0.75g/t 3E from surface. The company says the combination of shallow mineralisation, thickness and continuity may support a bulk open-cut mining concept, although that remains subject to modelling, mine planning and technical studies. Drill intercepts are reported as downhole lengths and are not necessarily true widths.

Thick sulphide package carries recurring higher-grade zones

Recent drilling has continued to show broad mineralised envelopes containing repeated higher-grade reefs. SWRD051 returned 448 metres at 0.87g/t 3E from 102 metres, including 101 metres at 1.46g/t 3E. SWRD090 delivered a 336.9-metre interval at 1.02g/t 3E, while SWRD054 included 14 metres at 3.13g/t 3E and a 1.29-metre interval at 18.62g/t 3E.

These results extend the 1.35km Southwest corridor, previously reported at that length as heritage approvals opened the broader drilling footprint. Terra says the higher-grade reefs occur at consistent positions within the wider package and could be considered in selective processing scenarios. That is a geological interpretation rather than an established mine design or economic outcome.

Metallurgy moves from rougher to cleaner flotation

Metallurgical work has progressed from rougher flotation to cleaner trials, with first results expected in the December quarter. The program is testing both a single bulk sulphide concentrate and separate copper and nickel concentrates, while assessing the recovery and deportment of PGM, gold, copper, nickel and cobalt.

Automated mineralogy identified coarse platinum-palladium tellurides hosted in and around the sulphides. Terra says the coarse-grained sulphides may allow liberation at a relatively coarse grind, but recoveries, concentrate specifications and smelter payability remain to be established through testwork. Water-monitoring bores and geotechnical drilling have also begun to support the planned development studies.

Cash funds the next stage, but spending is accelerating

Terra held A$57.9 million in cash at 30 September, down from A$75.1 million at the end of June. The quarterly cash flow report shows A$16.8 million spent on exploration and evaluation, including A$7.5 million on drilling and A$3.1 million on sample analysis, with total net operating outflows of A$17.1 million.

The company describes its balance sheet as sufficient for the maiden resource and Scoping Study, targeted for mid-2027. The quarterly Appendix 5B calculates 3.4 quarters of funding based on the period's relevant outgoings, a mechanical measure that does not account for changes in drilling intensity, future financing or project priorities. Terra raised A$100 million through placements during FY2026, but the latest quarter was funded without new equity.

Basal Reefs remains a separate resource base

Southwest is separate from Terra's existing 148-million-tonne Basal Reefs Mineral Resource, which contains estimated 1.6 million ounces of 3E, 270,000 tonnes of copper, titanium and vanadium. The company has reduced regional exploration to lower-cost programs while concentrating rigs and capital on Southwest, leaving the established resource as a secondary development and exploration opportunity within the broader Dante province.

For shareholders, the immediate test is no longer whether Southwest can produce another encouraging intercept. It is whether the pending assays, geological model and metallurgical results can convert a large and visually compelling sulphide system into a coherent maiden resource and a credible development case.