Scorpion Minerals has strengthened the development case for its Old Prospect gold deposit, with a new open-pit optimisation identifying 16,159 ounces at a A$6,000 per ounce gold price. The project now has a proposed processing pathway and a mining lease application in the Right to Negotiate stage, but funding remains limited as drilling and studies ramp up.
- 16,159 ounces identified from 314,565 tonnes at 1.60 g/t gold
- Updated optimisation contains 203% more gold than the 2024 study
- Andel granted an option to fund mining, transport and processing at Kirkalocka
- Mining lease application M20/568 reaches the Right to Negotiate stage
- A$668,000 cash and A$1.225 million of unused debt capacity at quarter end
Old Prospect optimisation lifts the development target
Scorpion Minerals Limited (ASX:SCN) is moving Old Prospect closer to a development test, with an updated open-pit optimisation identifying 314,565 tonnes at 1.60 grams per tonne gold for 16,159 ounces across two pits in Western Australia’s Murchison region. The result contains 203% more gold than the company’s 2024 optimisation and scoping study, although the comparison also reflects a much higher assumed gold price of A$6,000 per ounce, versus A$3,000 previously.
The optimisation is not a mining reserve, production forecast or feasibility study. Scorpion says its purpose is to demonstrate reasonable prospects for eventual economic extraction under the JORC Code and provide a basis for further scoping and mining studies. The estimate also covers only the near-surface portion of the existing resource, leaving the company to test whether deeper and strike extensions can add material scale.
Drilling and resource work now carry the story
Old Prospect currently has a 312,395-tonne Mineral Resource Estimate at 2.15 g/t gold for 21,632 ounces, with 72% of contained gold in the higher-confidence Indicated category, according to Scorpion. Mineralisation remains open along about 650 metres of strike and at depth, while the company has separately outlined a conceptual Exploration Target of 1.0 million to 3.0 million tonnes grading 1.5 g/t to 2.0 g/t gold. That target is not a Mineral Resource and may not convert into one.
The latest result follows the October pit optimisation, which identified the same 16,159-ounce opportunity and highlighted the need for further drilling and studies. Scorpion plans 56 infill and extensional holes, comprising about 5,000 metres of reverse-circulation drilling and 2,000 metres of diamond tails, to support an updated resource estimate and mining scoping study. Diamond drilling is also intended to test down-plunge mineralisation and provide material for geotechnical and metallurgical work.
Andel option provides a proposed Kirkalocka processing route
Scorpion has granted Andel Resources an exclusive option to enter a Right-to-Mine agreement covering the Old Prospect tenements. If the arrangement proceeds, Andel would procure, manage and fund the services required to mine, process and transport ore, with processing linked to the Kirkalocka plant owned by Gylden Resources. Andel has paid a A$2 million option fee plus GST, and the option is exercisable for one year from execution subject to conditions that can be satisfied or waived.
The arrangement is a potentially important piece of the development pathway because it addresses access to processing infrastructure roughly 200 kilometres from Old Prospect. It is not yet a completed mining agreement: the option still has to be exercised, and the project remains dependent on approvals, further studies and the economics of extracting and transporting the ore.
Mining lease and regional exploration remain in progress
Mining lease application M20/568 has moved beyond the objection period into the Right to Negotiate stage with Native Title Parties. Scorpion is working with Ozz Resources Limited (ASX:OZZ), which submitted the application and is preparing an updated mining study. The company also intends to complete heritage surveys, lodge a mining proposal, map the broader area and conduct follow-up regional drilling.
Beyond Old Prospect, Scorpion is planning a 37,200-line-kilometre airborne magnetic and radiometric survey across its Pharos project and Jungar Flats joint venture ground. It is earning up to 70% of Jungar Flats by spending A$3 million over five years. The company is also reviewing ways to unlock its Mt Mulcahy copper prospect, which hosts a historical resource of 647,000 tonnes at 2.4% copper, 1.8% zinc, 0.1% cobalt and 20 g/t silver.
Cash position leaves limited room for delays
Scorpion ended the September quarter with A$668,000 in cash after using A$806,000 in operating activities and repaying A$225,000 of borrowings. It had A$1.225 million of unused capacity under an unsecured A$2.5 million loan facility carrying 8% annual interest, giving total available funding of A$1.893 million and an estimated 2.3 quarters of funding at the reported rate of outgoings.
That runway is based on current cash flows, before the full cost of the planned drilling, mining studies, heritage work and approvals is known. The next material tests are therefore practical as much as geological: whether Andel exercises its option, whether M20/568 advances, and whether drilling can convert the conceptual upside into a larger resource without putting further pressure on the balance sheet.
Bottom Line?
Old Prospect now has a more substantial conceptual pit and a potential processing route, but drilling, approvals and funding will determine whether the development case survives contact with execution.
Questions in the middle?
- Will Andel exercise its Right-to-Mine option once the conditions are assessed?
- Can the planned drilling convert open mineralisation and the Exploration Target into a larger Mineral Resource Estimate?
- How will Scorpion fund development work if drilling and mining studies increase cash outflows beyond the current 2.3-quarter estimate?